Sunday, November 27, 2022

Quebec’s Energy Manager To Cut Supply For Crypto Mining Due To Shortage

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Cryptocurrencies are generated via a process known as crypto mining which consumes much electrical power. And higher energy consumption has consequently brought electrical power shortages in several regimes due to increased mining activities.

Quebec, a Canadian province, is of them facing similar problems. And now, the provisional energy supplier wants to cut power sources for miners to survive in the winter when the minus-degree temperature requires residents to use heaters and other electrical gadgets to survive.

In this regard, power managing firm Hydro Quebec, which controls, generates, and distributes electrical power across the Quebec province of Canada, filed a report to the energy board on November 1. The distributor in the report asked the government to allow the hydro-electrical power plant to limit the energy supply to crypto miners. 

Pointing to the reason behind the need to reduce powers for crypto mining operations, Hydro Quebec expressed concerns about the “reliability and security” of power for residents in Quebec. Furthermore, the firm already had considered the demand for electrical power through cryptocurrency, greenhouse farming, and green hydrogen. 

Following Hydro-Quebec’s request, Pierre Fitzgibbon, a Canadian politician and lawmaker, tweeted on November 3 to express his favor with the request of Hydro Quebec.

However, he said that Gov. would ask the energy board to free the platform from its obligations to provide energy to crypto mining farms. The firm allocates 270 MW of electricity to mining platforms per the current liability. Besides this quantity of electricity supplied, energy demand in the crypto sector continues to rise, putting the energy supplier under pressure.

Bitcoin’s price is currently hovering above $21,000. | Source: BTCUSD price chart from TradingView.com

Power Demand For Crypto Mining Will Keep Rising

The report uncovered that energy demand for crypto mining activities would continue to grow as digital assets are gaining more ground daily. As per the Growth in electricity demand will continue in Quebec report, the highest demand for mining energy stands at 0.7 terra watts per hour (TWh) in a timeframe of ten years, which is expected to happen in 2028.

Hydro-Québec added;

The additional energy needs in winter are high, and this, without the addition of the load related to the balance of the block reserved for cryptographic use applied to blockchains. There are anticipated energy purchases of nearly 3 [terawatt-hours] in winter from 2025 and even exceeding 3 TWh in 2027.

Additionally, mining firms in the regime have been paying extra taxes over their operations to the government of Quebec since March 2021. Though government seeks to control the burden on the power grid, it also provides options to expand the mining business.

Quebec province does not appear to be the first to suffer problems managing electricity due to crypto mining. For example, Kosovo and Iran have been facing an energy crisis. Notably, Iranian authorities turned aggressive seeing the critical issues and a previous report reveals that police have confiscated over 9,000 mining machines till August. 

Featured image from Pixabay and chart from TradingView.com

Numisteamone

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