Canadian Bitcoin Mining Company Purchasing Two Coal Plants in Pennsylvania

A crypto mining company based in Canada is in the process of acquiring two coal-fired power plants located in Pennsylvania as part of its acquisition of a digital mining group. Bitfarms Ltd. is finalizing a deal to purchase Stronghold Digital Mining, with the sale set to conclude shortly. The shareholders of Stronghold voted in favor of the sale earlier this year. Stronghold owns two coal plants in Pennsylvania: the 85-MW Scrubgrass waste coal power plant in Venango County and the 80-MW Panther Creek waste coal facility in Carbon County.

Bitfarms intends to utilize the electricity produced by these coal-fired power stations to support its energy-intensive bitcoin mining operations. The company already has a presence in Pennsylvania, having bought a data center in Mercer County last year. In addition to enhancing Bitfarms’ operations, this acquisition could offer significant value by allowing the company to sell excess power to the wholesale markets within the PJM territory. Concerns have been raised by officials at PJM, the regional grid operator, regarding their capacity to meet the rising demand for power within their 13-state territory from various sources like data centers, new manufacturing facilities, and electrification initiatives. A recent agreement between PJM and the Governor of Pennsylvania, Josh Shapiro, settled a lawsuit over capacity market pricing. PJM has acknowledged the possibility of a capacity shortage in their system as early as the 2026/2027 delivery year.

PJM has been actively addressing the need for additional power generation capacity, with more than 54 GW of power generation capacity being retired within the PJM from 2011 to 2023. The grid operator has requested operators of power plants providing baseload power to delay retirement in efforts to maintain power supply. Several power projects within PJM have interconnection agreements but have not been developed due to various factors such as local opposition, equipment or financing challenges, and permitting issues.

Bitfarms has unveiled plans to expand the bitcoin mining facilities at Scrubgrass and Panther Creek, potentially increasing the total electricity supply to up to 955 MW by enhancing the transmission capacity. Public documents related to the acquisition showcase that Stronghold had been exploring a sale of the company since at least 2021, with multiple interested parties considering purchasing the company but hesitating to acquire the two power plants.

Initially, Bitfarms was solely interested in acquiring Stronghold’s mining assets and proposed a $120 million bid for the bitcoin miners. However, the company eventually opted for an all-stock transaction to purchase Stronghold entirely, with an enterprise value of $175 million. Bitfarms highlighted in its investor presentation that Pennsylvania offers a favorable business environment, making it an attractive jurisdiction for this strategic acquisition. This acquisition marks a significant development in the crypto mining sector, underscoring the growing interplay between traditional energy sources and emergent digital technologies.