Washington state has recently surpassed its climate goals for data centers and cryptocurrency mining, while neighboring Oregon has failed in its own attempts to reach similar targets. The contrasting results reflect the different approaches taken by the two states when it comes to regulation and incentivization.
Washington’s success can be attributed to a combination of government incentives and industry collaboration. In 2019, Governor Jay Inslee signed new legislation to promote the use of renewable energy by data centers and cryptocurrency miners. The law requires these businesses to use 100% carbon-free energy sources by the year 2030.
In addition to the legal mandate, Washington’s utilities have also offered incentives to businesses that adopt renewable energy. For example, in 2020, the utility company PSE announced a program that offered significant discounts to data centers that utilized carbon-free sources of energy.
These incentives, combined with the state’s abundant supply of renewable energy, have driven significant investment in green energy infrastructure. In recent years, several large data center operators, including Microsoft, Google, and CyrusOne, have announced plans to build new facilities in the state, citing its favorable regulatory environment and access to low-cost, renewable energy.
Oregon, on the other hand, has struggled to meet its own climate goals for data centers and cryptocurrency mining. The state’s failure can be traced back to a lack of government regulation and the absence of incentives to promote the use of renewable energy.
In 2016, Oregon became the first state in the country to set energy efficiency and greenhouse gas emissions goals specifically for data centers. The state aimed to reduce energy consumption by at least 15% per year and to ensure that all new data centers were built using 100% renewable energy sources.
However, Oregon has failed to make substantial progress towards these goals. In 2019, a report from the Oregon Department of Energy found that the state’s data centers still relied heavily on non-renewable energy sources, with just 6% of facilities utilizing renewable energy.
One of the primary reasons for Oregon’s failure to meet its goals is the lack of government regulation. Unlike Washington, Oregon has not implemented any legal mandates requiring the use of renewable energy by data centers or cryptocurrency miners.
Furthermore, the state has not offered any incentives to encourage businesses to adopt renewable energy. Without these incentives, many businesses have been hesitant to invest in renewable energy infrastructure, preferring instead to rely on cheaper, non-renewable sources.
Oregon’s failure to meet climate goals for data centers and cryptocurrency mining underscores the need for effective government regulation and incentivization. Washington’s success demonstrates that collaborative efforts between government and industry can drive significant progress towards reducing carbon emissions and promoting renewable energy.
Moving forward, it is crucial that other states follow Washington’s example and implement legal mandates and incentives to promote the use of renewable energy by data centers and cryptocurrency miners. With climate change posing an ever-increasing threat, it is essential that we take action now to reduce our carbon footprint and promote sustainable energy practices.
During the 2023 legislative session, Washington and Oregon took different paths when it came to regulating carbon emissions tied to crypto mining and data centers. In Washington, House Bill 1416 was signed into law by Governor Jay Inslee earlier this month, mandating that customers of rural utility districts curb emissions from purchased electricity in line with the state’s Clean Energy Transformation Act. In contrast, Oregon’s House Bill 2816, which aimed to impose emissions reduction timelines on crypto miners and data centers, died in March amid significant opposition from the established data center and crypto mining communities.
Both crypto mining and data centers use significant amounts of electricity, with the former also accused of instances of discharging heated water back into lakes, prompting concerns over fish deaths and algae blooms. Crypto mining has also been linked to the reopening of closed coal plants in some cases.
Oregon state Representative Pam Marsh, who sponsored the failed bill, claimed that Amazon, which operates several data centers in eastern Oregon, lobbied against the legislation and organized opposition to it. Amazon claimed that the bill did not address the build-out of electric infrastructure needed to bring more clean energy to the grid.
In Washington, the Clean Energy Transformation Act had already applied to rural, customer-owned utilities, and House Bill 1416 sought to close a loophole allowing some crypto mining operations to access non-renewable energy sources.
While many companies have set their own climate goals to be carbon-negative, few regulations specific to crypto mining and data centers exist in either Oregon or Washington. The Amazon data centers in Oregon are already powered by 95% renewable energy, with plans to reach 100% by 2025.
In Oregon, Marsh’s bill would have required data centers and large-scale crypto miners to power their facilities with 80% clean energy by 2030 and 100% by 2040, in line with timelines for investor-owned utilities. She plans to reintroduce a version of the bill in a future session.
Washington’s legislation aimed to hold non-residential industrial customers to the same clean electricity standards as the rest of the community. State officials noted that consumer-owned utilities were already included in the Clean Energy Transformation Act, likely accounting for the different approach to regulation.
Marsh hopes future conversations will focus on the involvement of data centers and crypto miners in clean energy goals and the need to support rural utilities in a move toward a clean energy future.
