Beowulf Energy, the parent of plant owner Somerset Operating Co., has created a new subsidiary, Lake Mariner Data LLC, which applied to the town June 24 for permission to erect four large buildings to be filled with computers, just east of the mothballed power plant on Lake Road.
The computers are needed for the energy-intensive calculations required for investments in cryptocurrency. The company said in a statement it intends to produce "bitcoin at an industrial scale."
"We are proud and excited to be on the doorstep of new jobs, investment and economic vitality at Somerset, barely a year after going through the painful process of closing the coal plant and laying off so many long-standing, highly qualified and dedicated employees," said Jerry Goodenough, a representative of Lake Mariner Data.
Supervisor Jeffrey M. Dewart said the Town Board amended the zoning of the site last week to make way for the data mining project on the grounds of the coal-fired power plant, which Beowulf said in May is being dismantled under supervision from the state Department of Environmental Conservation.
The last hurdle is town Planning Board approval of the site plan, which could come after a public hearing at 7:30 p.m. Thursday in Town Hall.
Lake Mariner Data's plan calls for four buildings, each measuring 60 by 400 feet. Dewart said they are to be built in two phases: two buildings to open by November and two others in the ensuing year.
Dewart said the project is the first in Beowulf's proposed Empire State Data Hub, a planned reuse of the power plant property that was announced in 2019.
"We've got to sit down here and discuss the host agreement or taxing on it, coming up shortly," Dewart said.
Dewart said the first phase of the cryptocurrency project would create 18 to 20 full-time jobs, paying $40,000 to $60,000 each, plus about 100 construction jobs.
In 2019, the New York Power Authority granted Beowulf 10 megawatts of electricity for data centers at the site, but Dewart said as much as 250 additional megawatts might be needed.
A NYPA spokesman said the authority will not provide power for the cryptocurrency operation, but the company said it will buy power from the state grid, which "includes significant hydropower from nearby Niagara Falls and is over 90% zero-carbon."
Dewart said Lake Mariner is working with National Grid and New York State Electric & Gas Corp. on power lines needed for the data hub, including the data mining facility.
Other cryptocurrency investors have sought other solutions to their energy needs.
For example, Digihost, a Canadian data mining company currently operating at the old American Axle plant in Buffalo, has an agreement to buy Fortistar's nature gas-burning power plant in North Tonawanda.
The deal needs approval from the state Public Service Commission, and Digihost's proposal to pile shipping containers stuffed with computers on the power plant's lawn requires approval from the North Tonawanda Planning Commission.
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