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U.S. Blockchain Firm Courts Controversy With Energy Project In Disputed Western Sahara



New York-based Soluna Technologies has become embroiled in the political controversy over Western Sahara, after announcing plans for a project combining renewable energy and blockchain computing in the disputed territory.

Soluna plans to develop a 900MW wind farm near the town of Dakhla which will power a blockchain computing facility. Blockchain is the foundation for energy-hungry processes such as mining for Bitcoin and other crypto-currencies. According to analysts Digiconomist, as of early August 2018 bitcoin mining used some 73 terawatt hours of energy a year – more than the total consumption of some mid-sized countries such as Chile and Venezuela.

By using renewable energy, Soluna says it will help to make the process more environmentally sustainable. “Our vision is to power the blockchain with clean, renewable energy,” says John Belizaire, chief executive of Soluna.

The company’s Dakhla project covers 37,000 acres in an area notable for its consistent winds. Soluna plans to develop the site in phases, with the first stage comprising 36MW of energy production capacity and 18MW of computing facilities. This first phase will cost a reported $100m. In total, it will take five years to complete the project, at a cost of up to $2.5bn.

A stretch of coast near Dakhla, Western Sahara, photographed on February 26, 2013 (Photo: Raquel Maria Carbonell Pagola/LightRocket via Getty Images)

Development of the site was begun in 2009 by Moroccan firm A.M. Wind, an affiliate of German wind energy specialist Altus. Soluna was set up earlier this year, backed by private equity firm Brookstone Partners, and subsequently acquired A.M. Wind.

The announcement of the Dakhla project has drawn criticism from activists campaigning for Western Saharan independence who say the Moroccan authorities have no right to grant licenses for such projects. Dakhla “is situated on land under foreign military occupation. Any agreement that Brookstone has signed with the Moroccan government for that particular area is thus null and void,” says Sara Eyckmans, coordinator for Western Sahara Resource Watch (WSRW).

After the departure of the colonial ruler Spain in 1975, the area around Dakhla was seized first by Mauritania and then by Morocco. The latter now claims Western Sahara as an integral part of its own territory, but that claim is not recognized by the UN or many others.

In October 2015, the UN Economic and Social Council called on Morocco to ensure the local indigenous population gave their “prior, free and informed consent” to any development of the territory’s natural resources. Recent rulings by the European Court of Justice have confirmed that Western Sahara should be treated as distinct from Morocco.

Belizaire says his firm is “aware of the political sensitivities of the region and our investments in Dakhla fully respect the international legal status of this territory.” He added that “We have and will continue to conduct our activities in strict accordance with the governing laws of the region. We are also conscientious of the importance of ensuring our project is aligned with the principles that the interest of the inhabitants of these territories is paramount.”

Belizaire says his firm plans a number of initiatives to support the local community, including allocating 1% of revenues generated from the plant to fund programs such as assistance for schools. “We hope to create a community of trained resources in blockchain computing and launch a centre of excellence in the region,” he says. “This will create many jobs in electrical engineering, software, and mechanical engineering.”

However, activists have urged Soluna and Brookstone to rethink their approach. Eyckmans has called on Brookstone to support the UN peace process in Western Sahara by not engaging in a project in the occupied territory. In a letter to Michael Toporek, founder and managing general partner of Brookstone Partners, sent on August 9, she appealed to him to reconsider his firm’s involvement in Western Sahara, writing “it is not in your interest to become associated with an ongoing occupation and colonization.”

Soluna’s site will initially be developed as an off-grid power facility, but could be integrated into the national grid by mid-2019. The firm says it is working with Mott MacDonald as consulting engineers on the project, and with Afrique Advisors to assist with acquiring the necessary permits and approvals.

Moroccan authorities have been developing renewable energy for some time, with wind power a key element of the country’s energy mix. A number of other wind farms have been developed in Western Sahara, including the 50MW Foum el Oued project near Laayoune. A 100MW facility at Boujdour is due to come on stream next year.

Tourists play with a powered parachute on the beach of Dakhla, Western Sahara on December 13, 2017. The weather conditions make it an ideal area for some sports and are now also a draw for wind energy firms. (Photo: David Degner/Getty Images)

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