Updated: Quebec Encourages Bidding for Electricity for Crypto Mining
Update: Cryptocurrency mining companies will now be required to bid for electricity – starting at a 20% premium – if a proposed amendment gets ratified by Regie de l’energie, Quebec’s provincial electricity authority. According to reports from Bloomberg, companies willing and ready to pay will account for the vast majority of ranked applications. The application process will also favour companies that are immediately ready to operate if given a license.
Original story: June 20th, 2018
Hydro-Quebec received authorization from provincial energy regulator Regie de l’energie to increase electricity prices for cryptocurrency mining to three times that of current prices.
At the beginning of 2018, Hydro-Quebec CEO Éric Martel was actively encouraging more business from digital currency mining operations. Consumer energy demand in the province has decreased, leading Hydro-Quebec to look to digital currency miners to generate additional revenue. The additional revenue from miners would compensate for the decrease in demand and help to cover the costs of maintaining the electricity network across Quebec instead of maintenance costs being passed to consumers.
A short time later Hydro-Quebec, faced with an unexpected volume of demand, admitted it was unable to accommodate requests from new mining operations and would have to reconsider and redefine its boundaries.
In March, parts of the province began to ban new cryptocurrency mining operations due to high demand for energy and other social and economic implications.
On May 31st , 2018, the provincial government decided to lift a moratorium placed on supplying electricity to digital currency miners as it wanted to “avoid missing the ship” for the economic benefits.
Temporary cryptocurrency mining price increase implemented pending a hearing and review
Regie de l’energie, responding to a request by Hydro-Quebec, and following a regulatory tribunal has now authorized Hydro-Quebec to charge 15 cents per kilowatt hour to blockchain companies as a temporary measure. The new temporary pricing will not immediately apply to existing cryptocurrency mining operations in the province.
The decision was released by provincial regulators on Monday, 18th June, 2018, and due to questions raised by Hydro-Quebec’s evidence further hearings will be held on Tuesday, 26th June, 2018, to allow other stakeholders to air their views. One such party will be Canadian cryptocurrency mining company Bitfarms, which already has mining facilities in the province.
“We don’t want to send a message to the market that this is the price for cryptocurrencies in Quebec,” said Hydro-Quebec spokesman Jonathan Cote to the Globe and Mail. “It’s more that requests are suspended until we have the proper framework determining conditions for that market.”
The utility company revealed it has received more than 300 requests from new cryptocurrency mining operations looking to set up in the province, amounting to potential demand of 15,000 megawatts. This level of demand would equate to 40% of the total capacity of the electricity network in Quebec.
Hydro-Quebec is proposing a selection process for cryptocurrency mining operations to which it wants to allocate 500 megawatts of power supply. It will review the economic benefits such as investment and jobs, according to Cote and The Globe and Mail, as well as factors like peak winter demand from consumers.
According the regulators decision, the “dissuasive rate” of 15 cents per kilowatt hour is set provisionally until June 28th, 2018. After which, a more permanent solution and tariff is likely to be implemented.
Image credit: Pixabay
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