Quebec Halts New Cryptocurrency Mines as it Mulls Restrictions
After originally being very welcoming, it looks like one part of Canada may soon look to bring in new protections against cryptocurrency miners.
The province of Quebec announced it has stopped approving new cryptocurrency mining projects in an effort to reassess the rates they charge for electricity and if further restrictions may be necessary. The announcement comes in conjunction with the province’s power generator Hydro-Quebec asking to limit the total amount of electricity available to miners to a single block of 500 megawatts—a small percentage of the 17,000 megawatts (MW) miners in the province have requested so far.
“What we are aiming for with the measures announced today is to welcome, in a responsible, prudent and pragmatic way, the best companies in the field of blockchain technology; contribute to the economic development of other sectors that have an impact throughout Quebec; and ensure the supply of energy to all Quebecers,” said Pierre Moreau, Minister of Energy and Natural Resources.
This shutdown and discussion surrounding new sanctions could be the result of a recent KPMG report that shows how cryptocurrency mining does not generate a lot of new jobs. The study, commissioned by Hydro-Quebec, found that the bigger a digital currency miner is, the fewer jobs they create. The chart below shows just how few jobs the industry creates—1.2 jobs per MW for a 20 MW operation and just 0.4 jobs per MW for a 250 MW operation.
Quebec’s energy ministry has ordered Hydro-Quebec to stop bringing new cryptocurrency miners online until regulators address the current state of the industry.
Demand for the field has been booming over the past year, even as cryptocurrency prices have levelled off. Quebec wants to make sure they have a specific portion of energy set aside for miners, while also making money off the sold electricity and creating enough jobs to warrant the mines in the first place. There are also issues around peak energy use periods in winter when the grid is under more stress than usual.
“The blockchain industry is a promising avenue for Hydro-Québec. Guidelines are nevertheless required to ensure that the development of this industry maximizes spinoffs for Québec without resulting in rate increases for our customers,” said Éric Filion, president of Hydro-Québec Distribution. “We are actively participating in the Régie de l’énergie’s process so that these guidelines can be produced as quickly as possible.”
Hydro-Quebec will file an application in the next few days to propose a selection process for new blockchain industry projects in an effort to still keep mines running in the country while being mindful of any concerns the province may have.
Cryptocurrency mining has become a mini-industry in Canada over the last year, as successful companies like Hut 8 have mined over $10 million worth of bitcoin in Alberta in the last six months alone. There’s no word if similar restrictions will hit provinces outside of Quebec, but there’s a good chance governments will look into them to see if they are creating jobs and worth it to keep around.
