According to local media sources in Canada, the Quebecois government has backtracked on its decision to stop selling electricity to cryptocurrency miners. This decision comes after the moratorium on energy sales to miners that has been in place since March 2018.
The government wants to explore a more measured approach to collaborating with the mining industry. Concerns over the significant energy requirements of cryptocurrency mining operations had forced the government to suspend all cryptocurrency mining applications.
At the start of 2018, everything seemed poised for Quebec to become a major cryptocurrency mining hub. The situation in China had escalated. Mining conglomerates like Bitmain, GMO Internet, and many others sought friendlier climes. Quebec appeared a match made in “crypto-heaven” with its abundant, low-cost energy and political stability. The municipality was also seeking to expand its influence in the technology arena by trying to lure corporations like Facebook, Microsoft, and Amazon. In no time, cryptocurrency miners were trooping to Canada’s second largest province.
However, by March 2018, things began to appear sour for cryptocurrency miners. The general narrative from the government was that miners weren’t exactly welcome in Quebec. During a conference in Montreal, Quebecois Premier, Philippe Couillard declared that crypto mining offered no utility and hence was of no economic importance to Quebec. According to him, all crypto miners do is establish set up shop, and consume electricity without providing any real value to the state in return for their activities. In tandem with the Premier’s stance, Hydro-Quebec announced at the time that it would offer no electricity tariff concessions to incoming cryptocurrency miners. In fact, spokespersons for the utility company said Hydro-Quebec planned to charge even higher tariffs and fees to incoming crypto miners.
The government by lifting the moratorium seeks a more nuanced relationship with cryptocurrency miners. Thus, miners will get their energy needs met, but during peak periods, Hydro-Quebec has the prerogative to initiate “load-shedding” measures.
Commenting on the forced load-shedding, the Quebecois Energy minister said:
“It’s a decree which will affect the Régie de l’énergie and Hydro-Québec, would set different rates for the mining of cryptocurrencies and would allow Hydro-Québec to do “forced load shedding”, that is to say, to cut the food to these companies during the 100 to 300 hours per year when the Quebec power grid is at maximum capacity.”
Much of the criticisms against cryptocurrency miners stemmed from their so-called high energy consumption. Since the moratorium, Hydro-Quebec has been reporting recurring electricity surpluses of 13 TWh. The 100 companies that applied to purchase electricity from the utility company are expected to consume about 10 TWh. This means that there is a lot of excess supply to cater to the needs of miners.
Quebec stands to gain a lot from being a cryptocurrency mining hub as it would be positioning itself at the forefront of crypto and blockchain technology innovation. The race for dominance in the emerging technology market is seriously becoming more intense, and countries are looking for ways to leverage these innovations for their benefit.