Quebec provincial government says it’s taking the measures to avoid need for hydro rate increases.
The Québec Liberal government is blocking all new requests for hydroelectric power from cryptocurrency mining operations. And they say they’re doing it so
Hydro-Québec can keep supplying power to everyone else in the province.
The emergency move followed a
warning from Hydro-Québec in January that the ‘unprecedented demand’ from operations that use mega-watts of power in order to generate virtual currencies such as bitcoin, ‘exceeds Hydro-Québec’s short and medium-term capacity.’
However, during the hydro stoppage to crypto-miners, the province and Hydro-Québec said they will try to come up with a new framework for granting requests in a sustainable way.
“The blockchain industry is a promising avenue for Hydro-Québec,” said
Éric Filion, President of Distribution for Hydro-Québec. “Guidelines are nevertheless required to ensure that the development of this industry maximizes spinoffs for Québec without resulting in rate increases for our customers.”
The province says the new guidelines will define a new category of electricity consumers, just for cryptocurrency mining operations, with a block of energy reserved for these customers. The company and the provincial government will also look at how best to ensure that the sector creates as many jobs as possible.
“The measures announced today represent a responsible, prudent, and practical approach to welcome top businesses from the blockchain tech sector, to contribute to the economic development of other sectors and to create spinoffs throughout Québec, while ensuring energy supply for all Quebecers,” said Québec energy minister
Pierre Moreau.
Cryptocurrency mining has a voracious appetite on the energy front, to the extent that –
in the current context of depressed token values – it may not even be economically viable for the miners. The activity can have significant carbon footprint if electrical energy is generated using fossil fuels such as coal. But, the environmental impact is of course mitigated by the use of renewable energy like hydroelectric power. Hydro power can also be relatively cheap, boosting that economic viability.
However, Québec is not the only place to worry about cryptocurrency mining chewing up too much of the available energy.
Plattsburgh in upstate New York banned bitcoin mining earlier this year, after a surge in hydro energy usage drove up residents’ utility rates.
And jobs? Hydro-Québec commissioned
KPMG to look into the economic spinoffs of the cryptocurrency sector, and the results weren’t very promising. Last month the resulting report showed relatively low direct job creation, compared with other energy-intensive sectors. However, KPMG said there could be benefits if auxiliary activities take place in Québec, such as software development and the manufacture, assembly or repair of the powerful computers used in mining.
Back in February, Quebec Premier
Philippe Couillard said Quebec is 'not really interested' in attracting bitcoin miners dependent on huge amounts of power’, adding ‘'I don't see the added value’.