Canada’s Quebec province has announced that it will be suspending all approvals for new digital currency-mining projects so officials can consider deeper restrictions and potential energy price hikes.
Bitcoin and cryptocurrency-mining operations in Canada are largely powered by Hydro Quebec. Representatives of the company are asking that the total amount of energy made available to digital currency miners be limited to 500 megawatts. While this is enough energy to run a “single aluminum smelting plant,” it’s a small portion of the 17,000 megawatts miners in Quebec originally asked for.
The enterprise is also asking for respective price increases on all energy consumed by cryptocurrency miners. This is to guarantee that Hydro Quebec maximizes its annual revenue while being able to maintain present power rates for residents and standard businesses.
In a statement, Hydro Quebec Distribution President Eric Filion explained, “We are asking the province’s energy board to quickly determine how much it should charge digital currency miners, and how much energy should be allocated to the industry while addressing the need to maximize revenues and job creation.”
Since early January, Canada has been a serious hotspot for cryptocurrency mining projects from China, South Korea and neighboring regions looking to take advantage of the country’s low energy prices and stable government. According to spokesman Marc-Antoine Pouliot, many of these miners are rewarded with the energy they need to mine digital currencies in exchange for investing in Hydro Quebec’s transmission network, thus boosting the company’s reputation and position in Canada’s power sector.
But problems are forming on the horizon. Hydro Quebec now says it doesn’t have the energy sources it needs to power every project that comes its way.
“We won’t be able to power all the projects that we’re receiving,” Pouliot explains. “This is evolving very rapidly, so we have to be prudent.”
While turning away potential business is a hard decision, Pouliot says Quebec’s energy ministry needs time to examine the situation and set new roles for the industry before things get out of hand. Minister Pierre Moreau states that the province now aims to establish new guidelines that will bring in the “best among the companies” and push Canada to the head of the cryptomarketing arena.
The decision to halt new approvals arrives just one week after Quebec lifted a moratorium that banned energy companies from supplying electricity to cryptocurrency-mining projects. The ban was first implemented in March, though Canada later expressed concern over “missing the boat” on crypto and decided it would work with mining companies if they could set different energy prices for miners and cut off electricity to their operations once the power grid was stretched to the maximum capacity.
Pouliot stated, “Having interruptible customers during these critical periods makes it possible to connect more. [Hydro Quebec’s mandate] is to ensure the implementation of cryptocurrencies in Quebec by maximizing economic benefits and ensuring the stability of our electricity supply.”
