Following regulatory uncertainty over crypto mining in China, mass mining operations are in the process of eyeing alternative locations. And given Quebec’s abundance of cheap, green hydroelectric power, the region is setting out its stall in a bid to attract miners.
Hydro-electricity is the dominant source of power in the area, accounting for 97% of Quebec’s supply. The state-owned operator, Hydro-Québec, runs 63 hydro-electric power stations and generates around 37,000 megawatts of electricity. This is enough to power 28 million homes.
The proposed allocation of 668 megawatts for mining equates to the average energy usage of around half a million homes. This represents just under 2% of total output.
Speaking in 2018, before China’s bombshell announcement, Jonathan Côté, Engineer at Hydro-Québec expressed reservations about crypto mining. He said:
“There’s definitely a gold rush feeling with some of them and they aren’t all well organized. We’re interested, but we are being cautious.”
However, as evidence of the industry’s development since then, such skepticism no longer exists. Today, Hydro-Québec is a party to developing Quebec as a cryptocurrency mining hub. Indeed, such is the appeal, the energy regulators have rejected a proposal, from Hydro-Québec, for miners to bid for energy. Instead, under the proposed scheme, miners are subject to fixed standard tariffs, the same as any commercial operator in the area.
All the same, qualifying for the energy allocation is subject to a selection process by the energy regulator. Interested parties must submit a proposal outlining their activities. The tendering process will identify the most beneficial projects by looking at the number of jobs created, the payroll generated by those jobs, details on investment in the area, and in keeping with Quebec’s green credentials, plans for re-using the heat generated.
How a Crypto Mining Venture Is Heating Homes and Businesses in Canada: A Canadian startup called Heatmine is hoping to generate warm feelings toward cryptocurrency mining by using excess heat from computers for building heating in Quebec. The company is… https://t.co/Bbyn83uMHS pic.twitter.com/ABocuK3mU8 — Green Guru (@green81guru) November 28, 2018
An influx of bitcoin mining operators will benefit the local economy, especially in re-generating small towns ravaged by economic change. Mayor of Powerview-Pine Falls, in the province of Manitoba, Bev Dubé, expressed delight at the economic benefits this could bring:
“I’ve been here 40 years, through all the loss of industry and I can’t help but think, you know, is this another world changing technology coming in? And if we could have any part of it … well it’s exciting to think they’re coming to us.”
However, others are not convinced. Jason Cross, a tech writer at the Motherboard Vice, highlighted the uncertainty of mining as a business due to volatile price movements. He said:
“You can never tell what is going to happen to the trade price of cryptocurrencies, but most people probably don’t expect the situation to suddenly and quickly reverse itself.”
As well as that, there are still sections of society who do not believe in cryptocurrency. Regardless of the economic benefits mining could bring, the battle to convince non-believers is the real challenge facing the industry.
Appalling allocation of resources by Quebec. Crypto currencies are garbage, and subsidizing them with cheap electricity isn't helping anyone. They might as well be running their 'mining' rigs in hard NOP loops. https://t.co/Qw9ajF5anJ — Dr Earl Oliver (@eaoliver) April 29, 2019