According to its own statements, the largest provider of clean energy in North America, Hydro-Québec, wants to supply new customers from the cryptomining sector with less or no electricity at all, at least in the medium term. The reasons for this are initially a growing need in the winter months and overall “the expected significant increase in electricity demand and the tense energy and capacity balances,” according to Hydro-Québec.
The energy company expects electricity demand to increase by 25 terawatt hours (TWh) or 14 percent in the period 2023-2032 due to the increasing demand for electricity, for example for data centers, the production of green hydrogen, the electrification of transport and some other demand factors.
Wooted to miner customers with cheap tariffs
Hydro-Québec, the energy company that distributes electricity primarily from 62 hydroelectric power plants in northeastern North America, submitted its 2023-2032 procurement plan to Canada’s Régie de l’énergie (CER) for approval early last November and put the numbers above on the table. According to the calculations, the power requirements of the mining industry, which is growing significantly in Canada, would increase by around 0.7 TWh and reach a maximum power requirement in 2028. This obviously puts the generator in trouble.
In recent years, customers from the mining industry have been vigorously advertised with low tariffs – the equivalent of around 11 euro cents per kWh for mining projects with a required output of between 50 KW and 50 MW. Apparently, the energy supplier no longer wants to hear about this for a short time. Especially in view of the other, rapidly growing areas, the electricity requirements of crypto mining companies are no longer sustainable.
“Open to projects that have a greater benefit”
There could even be a reduction in the amounts of electricity already allocated. Temporarily reduced electricity supplies to mining companies “could help jeopardize the reliability and security of energy supplies for Quebecers,” Hydro-Québec said. From various award procedures in previous years, the total number of electrical power allocated to the sector is currently 668 MW. The regulator promised a lot of new jobs and many investments in the French-speaking Canadian province.
The subject of the current discussion is primarily a quota of 300 MW, which the Régie de l’énergie 2019 granted on the basis of a selection process. Only ten percent of this is currently being accessed, although future crypto mining projects want to turn the tap off. Both Hydro-Québec and local politicians have called on the regulator to suspend power allocation for the remaining 270 MW. In early November, Quebec Minister for Economy, Innovation and Energy Pierre Fitzgibbon wrote on Twitter: “In view of the strong energy demand, the government has issued a decree requesting the Régie de l’énergie to allocate the 270 MW reserved for blockchain projects We remain open to projects that will have greater utility.”
Allocation temporarily suspended
In January, the authority then announced a first decision; it issued a safeguard order temporarily suspending the process of the planned allocation of the 270 MW to miner clients. The order will be maintained until the Régie makes a final decision on it as part of the review of the 2023-2032 procurement plan. The authority’s press office assumed that the final decision could take a few more months.
The events are initially a setback for the expansion of the blockchain and especially the cryptomining industry in eastern Canada. However, the mining companies have so far found an ideal location here due to its abundant sources of clean, renewable energy. According to general sustainability criteria, the adjustment of the miners may not only be a positive development, especially in view of the otherwise fundamentally catastrophic environmental balance of cryptomining.
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