Tuesday, December 21, 2021

Abilene Gives Warm West Texas Welcome to Lancium

The City of Abilene posted a news flash on a $2.4 billion energy project that involves bitcoin mining.  The flash stated:

Taylor County and the City of Abilene have approved a project with Lancium, a Houston-based energy technology and infrastructure company, to build a large scale, renewable energy powered data center campus in Abilene and Taylor County. This significant milestone, the largest project in Abilene and Taylor County history, is pending final negotiations with Taylor County, the City of Abilene, and the Development Corporation of Abilene (DCOA). The project will begin at 200 megawatts with an expansion capacity to over a 1 gigawatt.

Lancium is in rapid growth mode, having just raised $150 million.

Lancium Technologies Corporation ("Lancium"), a technology company focused on the energy transition, today announced that it closed $150 million in financing from leading energy companies and investors. Hanwha Solutions, one of the world's prominent providers of clean energy solutions and owner and operator of Q CELLS, leads this financing round.  

Hanwha Solutions website indicated it provided $100 million of the $150 million financing round.  Hanwha is a South Korean firm with multiple divisions.  Hanwha Solutions has "established local production and R&D centers in North America, Europe, China, and Korea."

The investment allows the Company (Hanwha Solutions) to secure a seat at Lancium’s board of directors, paving the way for close cooperation on future businesses.

Hanwha's 11-24-21 press release on the $100 million investment mentions the Abilene project:

Lancium has been constructing a “Clean Campus” at Abilene, TexasHaving purchased 2,350 acres of land in Texas, Lancium will complete the campus construction next year and expand the number of tenants. They can increase their profits by switching off load-heavy equipment when the electricity price is high – and selling reductant power to the grid.

Other items from the $150 million press release or from Lancium's website state:

Lancium Clean Campuses are built at critical points on the transmission system that are often overwhelmed with renewable energy.

... Lancium Clean Compute Centers™ that absorb excess renewable energy.

Remote data center locations: Work locations may include data centers with both climate-controlled and non-climate-controlled conditions. There may be exposure to extreme temperatures, noise and vibration, and mechanical or electrical hazards.  

Lancium plans to profit from bitcoin mining and situations where the demand for power exceeds supply.  Recall Texas citizens are paying for the February 2021 Texas grid failure through charges on our power bills.  

Lancium's major investor Hanwhat Solutions said the Abilene project is underway.  What remains to be negotiated is how much Abilene residents will pay to subsidize the project.   

A warm West Texas welcome to Lancium, but they know that already from their Fort Stockton Bitcoin mining project.   If Bitcoin goes cold for a long period of time this thing could implode like the Texas power grid.  Abilene residents may hope Bitcoin remains hot.    

Update 12-22-21:  Lancium sounds like a boil removal product.   It may not fare well if the Bitcoin bubble pops. 

Update 3-18-22:  An Appalachian town is sorry they brought in bitcoin miners.  They got noise pollution, an eyesore and no economic boom 

Update 6-14-22:  The cryptocurrency rout impacted Bitcoin miners which may impact the viability of Abilene's project.  

Update 6-25-22:  Energy costs are soaring as bitcoin's price has plummeted, harming the Lanciums of the world.  Will the project need greater public subsidy?

Update 10-27-22:  Bitcoin miner Core Scientific warns it cannot pay its debt.

Update 11-10-22:  Lancium broke ground last week on its planned energy complex in Abilene.

Update 12-6-22:  Bloomberg reported that Texas' crypto boom is starting to look like a bust.  The story mentions Lancium. 

Update 12-9-22:  Fortune reported:

And there is the state of Texas, whose bold experiment to welcome Bitcoin miners to help balance the power grid risks turned into a Lone Star State-sized disaster. In the wake of rising energy prices and debt burdens among miners, one state executive bemoaned a situation where “transformers, switch gears, and mobile data centers and containers for mining...are just sitting there.”

Update 12-21-22:  Crypto Miner Core Scientific declared bankruptcy

Update 3-18-24:  Government subsidies are keeping many bitcoin miners afloat.

...many Bitcoin miners are profitable because the government pays them not to mine Bitcoin. These so-called “load balancing” or “grid stabilization” payments incentivize miners to turn off their machines during heavy electrical usage elsewhere in nearby cities.

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