TLDR
- Hut 8 secured a 205MW power purchase agreement for a new data center in West Texas.
- The deal expands Hut 8’s energy portfolio to approximately 1.3GW of capacity.
- The new site is adjacent to a wind farm and connected to the ERCOT grid.
- Hut 8 is diversifying its operations to include AI and high-performance computing.
- This expansion follows Hut 8’s merger with US Bitcoin Corp in December 2023.
Hut 8, a leading North American Bitcoin mining company, has announced a significant expansion of its operations in Texas.
The company has secured a purchase agreement for 205 megawatts (MW) of power and land in West Texas, boosting its total energy infrastructure to approximately 1.3 gigawatts (GW) of capacity.
The new site, located on an undisclosed greenfield area in West Texas, is strategically positioned next to a wind farm and connected to the Electric Reliability Council of Texas (ERCOT) grid.
ERCOT manages the electric power flow for about 90% of Texas’s electric load. This location is expected to provide Hut 8 with access to some of the lowest wholesale power prices in North America.
Asher Genoot, CEO of Hut 8, highlighted the unique nature of this deal, stating,
“This is the first time a large data center load has been approved under the complex regulatory framework in this particular market.”
Genoot also emphasized the company’s approach to securing new energy capacity through partnerships that create value for all parties involved.
While specific details about the data center’s technical specifications and construction timeline have not been revealed, Hut 8 has stated that the energy capacity is available immediately.
The site already has an operational substation, and engineering, procurement, and construction efforts for the new data center are underway.
This expansion is part of Hut 8’s broader strategy to diversify its operations beyond Bitcoin mining. The company plans to use the new facility for various high-density compute applications, including Bitcoin mining and artificial intelligence (AI) processing.
It’s a great day to build, esp. when it’s at a 40% savings over buying turnkey sites! Construction is underway at our newest site in Culberson County, TX: expected to come online in Q2, the 63 MW site is expected to have up to 3.6 EH/s of self-mining capacity. More info in our… pic.twitter.com/LEG347mrEu
— Hut 8 (@Hut8Corp) February 27, 2024
This move aligns with the company’s recent efforts to capitalize on the growing AI market. In June, Hut 8 secured $150 million in funding from investment fund Coatue to help serve more AI customers.
The West Texas expansion follows Hut 8’s merger with US Bitcoin Corp in December 2023, a $725 million deal that formed a new entity and signaled the company’s increased focus on the U.S. market.
Earlier this year, Hut 8 began construction on a 63MW mining facility in Culberson County, Texas, which is expected to deliver 30% lower mining costs compared to its other U.S. operations.
Hut 8’s current portfolio includes 19 sites: ten Bitcoin mining locations in Alberta, New York, and Texas; five high-performance computing data centers in British Columbia and Ontario, Canada; and four power generation assets in Ontario. The company acquired five colocation data centers in Canada from TeraGo in 2022, further diversifying its operations.
This expansion by Hut 8 reflects a broader trend in the Bitcoin mining industry. Many companies are seeking to diversify their revenue streams and increase their hashrate in response to the recent Bitcoin halving event in April, which reduced mining rewards.
Other major players in the field are making similar moves. For example, CleanSpark recently announced an agreement to acquire five mining facilities in Georgia for $25.8 million, with an expected processing power exceeding 3.7 exahashes per second (EH/s).
The crypto mining industry continues to evolve, with companies like Hut 8 adapting their strategies to remain competitive.
By securing large power purchase agreements, diversifying into AI and high-performance computing, and strategically locating their operations, these firms are positioning themselves for long-term growth in the rapidly changing digital asset landscape.
As of July 10, 2024, Bitcoin was trading at around $57,900, showing a slight increase over the previous 24 hours. The cryptocurrency market continues to demonstrate volatility, with mining companies adjusting their operations to maintain profitability in the face of changing market conditions.