B.C.’s electricity has attracted major interest from cryptocurrency miners in recent years.
Currently, 21 projects request a combined 1,400 megawatts.
However, BC Hydro announced this week that it will suspend electricity-connection requests from cryptocurrency mining operations for 18 months.
“Cryptocurrency mining consumes massive amounts of electricity to run and cool banks of high-powered computers 24/7/365, while creating very few jobs in the local economy,” stated Josie Osborne, Minister of Energy, Mines and Low Carbon Innovation.
1,400 megawatts is enough energy needed to power more than 500,000 homes per year, according to BC Hydro.
The temporary suspension will “preserve B.C.’s electricity supply, while giving government and BC Hydro sufficient time to engage with industry and First Nations, and develop a permanent framework for any future cryptocurrency mining operations,” according to a statement from the Province.
“We are suspending electricity connection requests from cryptocurrency mining operators to preserve our electricity supply for people who are switching to electric vehicles and heat pumps, and for businesses and industries that are undertaking electrification projects that reduce carbon emissions and generate jobs and economic opportunities,” Osborne said.
While BC Hydro admits it has “enough energy” and will not need new sources of power until 2030, the organization released a report damning mining operations in the region, suggesting a parasitic relationship with the province’s energy grid.
“In recent years, cryptocurrency mining operations have become increasingly interested in setting up shop in British Columbia, in part because of its clean, renewable electricity and the fact that it has some of the lowest electricity rates in North America,” the government-issued report—titled “Crypto Conundrum: Why Cryptocurrency Mining Could Challenge B.C.’s Clean Transition”—reads. “However, cryptocurrency mining has several drawbacks, including the potential to use exponential amounts of electricity currently targeted for EVs, heat pumps, clean technology and industry that will help meet electrification goals in support of Clean BC.”
The report, which is decidedly anti-crypto, does not bode well for coin miners in BC.
“Cryptocurrency mining creates sustainability issues primarily because of the huge amount of energy used to get new ‘coins’ into circulation,” it warns. “Without a solution, BC Hydro’s strategic plan for electrification could be challenged by cryptocurrency mining operations, which could mean less energy for greener pursuits such as electrification of homes, businesses, and industry.”
BC Hydro also threatens “higher hydro rates for British Columbians and industry because of supply and demand—the more energy that is consumed by these operations, the more will need to be generated to compensate.”
The report points out other countries who have banned cryptocurrency mining, allegedly for environmental or energy reasons. However, the list is not exactly G7: China, Iraq, Qatar, Egypt, and Bangladesh are among those cited.
Within Canada, restrictions on cryptocurrency mining have been implemented in Quebec and Manitoba, according to the report. Manitoba placed a similar 18-month moratorium on new cryptocurrency mining projects to meet rising energy demand, while Quebec has developed conditions for the cryptocurrency mining industry that include higher rates and require operations to be curtailed during seasonal peak demand periods.
The report also mentions the still-unraveling FTX fiasco, which spurred the Canadian Securities Administrators to warn investors that trading in crypto assets comes “with elevated levels of risk that may not be suitable for many investors, in particular retail investors.”
Currently the province generates 98% of its electricity from clean and renewable resources, primarily hydroelectric.