Morocco has a lot of prime real estate for wind energy along its southern coast. But without robust transmission lines to move electricity from there to more populated centers, a traditional wind energy company might wait years for a grid connection before it could start making money.
But if you're connected to the Internet, one option might be to build a grid-isolated wind farm and use it locally while you wait for a connection to the rest of the grid. In Soluna's case, the money-making byproduct that makes local use worth it is mining Bitcoin.
Soluna, a bitcoin-mining company, is going to start construction on a 36 megawatt (MW) wind farm near Dakhla, Morocco, in January 2019, company spokesperson Yoav Reisler told Ars. The company has the rights to 37,000 acres of land, which could eventually accommodate up to 900MW of wind capacity.
The company, formed by New York private equity firm Brookstone Partners, hopes to raise $100 million to complete the project, which, in addition to the 36MW of wind, will include computing facilities that draw up to 18MW, as well as an energy storage system to power the computing center when the wind slacks.
Bitcoin mining is a notoriously power-hungry endeavor, consuming gigawatts of power as application-specific integrated circuits (ASICs) chug through computationally intense problems to produce keys that translate to coins. That makes energy one of the major cost drivers for Bitcoin miners after their equipment is purchased. Finding a stable source of electricity is a primary concern for those startups still in the mining business. When Bitcoin was at its peak price last winter, projections showed that energy consumption would only grow as the price of Bitcoin rose. Miners flocked to areas around the world with cheap electricity, like northern New York, although communities there have moved to stop the new companies from driving up electricity prices. Bitcoin startups have even had bad ideas, like firing up a decommissioned coal plant in Australia, to power their mining rigs.
Devil in the details
Now, as the price of Bitcoin has fallen more than half since its December peak, the frantic energy surrounding the cryptocoin has died down somewhat. In an email to Ars, John Belizaire, the CEO of Soluna, said that in the near-term Soluna still plans to mine Bitcoin. But that may not be forever. "Over time we will provide computing to broader diversified Blockchain applications that are not cryptocurrencies," Belizaire said.
Eventually, though, the company hopes to sell some of its electricity back to the grid in Morocco through Power Purchase Agreements (PPAs). "Morocco has a law in place that effectively guarantees a PPA for energy providers," Belizaire told Ars. "We will start with that and grow from there."
The law in question, Belizaire said, allows people to develop energy sources for self-consumption and also "allows the government of Morocco to purchase up to 20 percent of our excess power."
"Depending on our future capacity, we may engage with the larger commercial offtaker in the country and beyond to purchase our power," he added, although he admitted that Morocco's law framework 13-09 currently prevents certain renewable investors from selling more than 20 percent of their renewable power back to the grid. "This will require a change to law framework 13-09," Belizaire noted.
The project is also overshadowed by geopolitical concerns. Moroccan control over the southern portion of the country has been tenuous and was disputed by the Sahrawi people until a ceasefire in 1991. Western Sahara Resource Watch, an organization advocating against further Moroccan influence in the Western Sahara region, denounced the project in August for "violating the rights of the Sahrawi people" and accusing Morocco of "trying to involve foreign companies, to legitimize its occupation of Western Sahara."
In an earlier interview with GreenTech Media, Belizaire said that Soluna was "fully aware of the political sensitivities of the region," and noted that the company's "investments in Dakhla, Morocco fully respect the legal frameworks that pertain to energy development."
Belizaire said that management of the wind farm will be contracted out, and Soluna employees hired in Morocco will manage the computing farm.
In a way, vertically integrating with the energy industry is a reasonable hedge against the price of Bitcoin bottoming out. Not only will the computing center be set up to provide other blockchain services or to mine other cryptocoins, but Belizaire told Ars that the company has "the option to use our high-density computing platforms to power AI, machine learning, and graphic rendering applications."