Hydro-Quebec will temporarily stop processing requests from cryptocurrency miners so that it can continue to fulfill its obligations to supply electricity to the entire province.
Canada’s biggest electric utility is facing “unprecedented” demand from blockchain companies that exceeds Hydro-Quebec’s short- and medium-term capacity, according to a statement. In the coming days, Hydro-Quebec will file an application to the province’s energy regulator proposing a selection process for blockchain industry projects.
Hydro-Quebec has been courting cryptocurrency miners in recent months in a bid to soak up surplus energy from dams in northern Quebec. Power rates in the province are the lowest in North America, both for consumers and industrial customers.
Regie de l’energie, as the provincial regulator is called, will be instructed to reserve a block of energy for cryptocurrency miners and to set a specific rate for the industry while considering issues including peak winter demand. Quebec wants to make sure Hydro-Quebec can maximize revenue while ensuring economic benefits such as job creation.
“The blockchain industry is a promising avenue for Hydro-Quebec,” Eric Filion, president of Hydro-Quebec Distribution, said in the statement. “Guidelines are nevertheless required to ensure that the development of this industry maximizes spinoffs for Quebec without resulting in rate increases for our customers. We are actively participating in the Regie de l’energie’s process so that these guidelines can be produced as quickly as possible.”
Chief executive officer Eric Martel said in a February interview that the utility had received “hundreds of applications” from bitcoin miners in the previous weeks, which would need more than 9,000 megawatts of energy – about one-quarter of the utility’s total generating capacity of 37,000 megawatts.
Bitcoin miners active in the province include Backbone Hosting Solutions Inc., a Quebec-based company also known as Bitfarms that’s in the process of expanding its operations locally.
“We understand that Hydro-Quebec wants to welcome the most serious players in this emerging industry, and we definitely are part of that group,” Bitfarms president Pierre-Luc Quimper said in an e-mailed statement. “Other places in Canada offer rates that are as competitive, if not more competitive, than those of Hydro-Quebec.”
Cryptocurrency mining pales in comparison with other industries in terms of job creation, according to a February study prepared by KPMG for Hydro-Quebec.
Unidentified projects submitted to Hydro-Quebec in recent months could create as few at 0.4 direct job per megawatt used, and as many as 1.2 jobs, KPMG said. Data centres, by contrast, create between five and 25 jobs per megawatt, KPMG said.
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