Electricity

Quebec’s energy manager to seek government approval to stop powering crypto miners

Energy provider Hydro-Québec cited the high energy demands anticipated in the Canadian winter in its reasons to reallocate 270 megawatts from crypto mining firms.

Hydro-Québec, the firm managing electricity across the Canadian province of Quebec, plans to reallocate energy supplied to crypto mining firms. 

According to a Nov. 3 tweet from Canadian lawmaker Pierre Fitzgibbon, the government will request a decree from the energy board to release the company from its obligation to power crypto miners in the province. Hydro-Québec allocated 270 megawatts toward the mining firms, but electricity demand in Québec is expected to grow to a point that powering crypto will put pressure on the energy supplier.

The report Hydro-Québec filed with the government’s energy board on Nov. 1 said temporarily reducing the power provided to mining firms could help prevent threats to the “reliability and security” of energy for Québec residents. The distributor reported it took into account the demand for electricity from green hydrogen, cryptocurrencies and greenhouse farming.

“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,” said Hydro-Québec. “There are anticipated energy purchases of nearly 3 [terawatt-hours] in winter from 2025 and even exceeding 3 TWh in 2027.”

As part of the energy manager’s plan for 2023 to 2032, crypto firms were expected to grow by 0.7 TWh, reaching a maximum power demand in 2028. Crypto miners in Québec have been the subject of additional tariffs since March 2021, and also gave the province options to scale their operations so as to reduce the load on the power grid.

Related: The blockchain projects making renewable energy a reality

Energy consumption is one of many factors crypto mining firms weigh when setting up shop, which has contributed to more than one U.S. state considering tax breaks for companies. Crypto adoption also seems to be growing across Canada, according to the Ontario Securities Commission. OSC CEO Grant Vingoe said in October that “more than 30% of Canadians plan to buy crypto assets in the next year.”

Norway’s government proposes eliminating reduced electricity tax for Bitcoin miners

“We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016,” said Norway’s finance minister.

Trygve Slagsvold Vedum, the finance minister of Norway, has suggested the government abolish a scheme that allows crypto data centers to pay a reduced rate on electricity.

In an Oct. 6 announcement, the government of Norway proposed that data centers operating in the country be subject to the same electricity tax rates as other industries, representing a potential change in policy for Bitcoin (BTC) miners. According to the government, the reduced rate should be phased out as the demand for electricity was rising in certain areas.

“We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016,” said the finance minister. “In many places, the power supply is now under pressure, which causes prices to rise. At the same time, we are seeing an increase in cryptocurrency mining in Norway. We need this power for the community.”

In May, Norway’s Parliament rejected a proposal to ban crypto mining first introduced by the country’s Red Party. Jaran Mellerud, an analyst at Arcane Research, told Cointelegraph at the time that Norway’s political parties would “likely make one more attempt at increasing the power tax specifically for miners” with an outright ban unlikely to happen.

Many BTC mining firms currently operate in Norway, using 100% renewable energy sources and contributing 0.74% of the global Bitcoin hash rate, according to data from the Cambridge Bitcoin Electricity Consumption Index. However, many residents of the Sortland municipality in the north of the country have complained about noise pollution from miners — echoing concerns from lawmakers in the United States.

Related: Crypto ownership among Norwegian women doubles, mirroring global trends

The proposed elimination of the miner electricity tax rate came following Vedum’s presentation of Norway’s national budget for 2023. According to the finance minister, subjecting miners subj to standard electricity tax rates could bring in more than $14 million in revenue.

Norway’s government proposes eliminating reduced electricity tax for Bitcoin miners

“We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016,” said Norway’s finance minister.

Trygve Slagsvold Vedum, the finance minister of Norway, has suggested the government abolish a scheme that allows crypto data centers to pay a reduced rate on electricity.

In an Oct. 6 announcement, the government of Norway proposed that data centers operating in the country be subject to the same electricity tax rates as other industries, representing a potential change in policy for Bitcoin (BTC) miners. According to the government, the reduced rate should be phased out as the demand for electricity was rising in certain areas.

“We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016,” said the finance minister. “In many places, the power supply is now under pressure, which causes prices to rise. At the same time, we are seeing an increase in cryptocurrency mining in Norway. We need this power for the community.”

In May, Norway’s Parliament rejected a proposal to ban crypto mining first introduced by the country’s Red Party. Jaran Mellerud, an analyst at Arcane Research, told Cointelegraph at the time that Norway’s political parties would “likely make one more attempt at increasing the power tax specifically for miners” with an outright ban unlikely to happen.

Many BTC mining firms currently operate in Norway, using 100% renewable energy sources and contributing 0.74% of the global Bitcoin hash rate, according to data from the Cambridge Bitcoin Electricity Consumption Index. However, many residents of the Sortland municipality in the north of the country have complained about noise pollution from miners — echoing concerns from lawmakers in the United States.

Related: Crypto ownership among Norwegian women doubles, mirroring global trends

The proposed elimination of the miner electricity tax rate came following Vedum’s presentation of Norway’s national budget for 2023. According to the finance minister, subjecting miners to standard electricity tax rates could bring in more than $14 million in revenue.

Bitcoin’s real energy use questioned as Ethereum founder criticizes BTC

A founding member of Ethereum has claimed that Bitcoin uses nearly 1% of the world’s electricity, but different sources put it substantially lower.

The ever-raging debate around Bitcoin’s energy consumption has been re-ignited, with founding member of Ethereum Anthony Donofrio claiming that Bitcoin is using “way too much” energy. 

According to figures from Digiconomist, Bitcoin (BTC) currently uses 0.82% of the world’s power while Ethereum (ETH) uses 0.34%. Ethereum researcher Justin Drake posted the figures to his 56,000 followers that Donofrio retweeted, stating:

Ethereum proponents are attempting to take shots at Bitcoin while simultaneously promoting Ethereum’s upcoming transition to proof-of-stake. Drake added another tweet moments later that read: “Ethereum post-merge: 0.000% of world.”

However, the validity of the figures are in doubt.

Even Drake was forced to acknowledge alternative sources of data in a later tweet, which estimated energy consumption figures at nearly 60% lower.

Data sourced from Digiconomist, which markets itself as a platform that “exposes the unintended consequences of digital trends,” has drawn criticism from blockchain industry professionals in the past. The most notable of these is fellow Ethereum developer Josh Stark, who called out the publication for frequently presenting the worst-case scenario when it comes to blockchain technology.

In November last year, Stark published a Twitter thread that questioned the accuracy of Digiconimist’s research methodology. Stark pointed out that almost all of the figures concerning blockchain power consumption were at the “very high end” of any theoretical outcome, especially when compared to more rigorous sources like the University of Cambridge.

Where Digiconomist claims that Bitcoin currently consumes 204 terawatt hours (TWh) worth of electricity per year, the University of Cambridge’s Bitcoin Electricity Consumption Index estimates that Bitcoin’s real consumption is much closer to 125 TWh, a 39% difference.

Related: Are we misguided about Bitcoin mining’s environmental impacts? Slush Pool CMO Kristian Csepcsar explains.

While it may be a well-known fact that Bitcoin’s proof-of-work consensus mechanism is an energy-consuming process, the discussion around just how much power the Bitcoin network actually uses remains a hot-button issue.

According to a report from Cointelegraph, putting a specific number on Bitcoin’s actual power consumption can be quite difficult because of the variation in energy sources that power Bitcoin mining globally.

As of January this year, nearly 60% of global mining operations were reportedly powered by renewable energy sources, and Bitcoin mining operators are rushing to utilize “stranded” natural gas resources that would normally be burned off. Additionally, a report published by CoinShares in January this year found that Bitcoin mining may account for just 0.08% of the world’s total CO2 emissions in 2021.

Sam Tabar, chief security officer of Bit Digital, a publicly-traded Bitcoin mining company, told Cointelegraph that the environmental impact of Bitcoin is frequently exaggerated by critics:

“The environmental impact of Bitcoin mining is massively exaggerated by critics & traditional financial authorities (IMF, etc.) because they know they can divide a new counterculture movement by using fake environmental arguments. They are trying to gaslight us against each other. They gaslight the world with fake green arguments, and I understand why: They don’t want to lose influence over the levers of power of a system that only works for the elite.”