The Background Details
Weeks after putting a moratorium in place, a decision has come from Canada.
As has been reported in the past, Quebec has struggled with Bitcoin mining and how to handle the huge amount of requests for power received on a daily basis. Quebec is an extremely attractive option for crypto miners because of its hydro capabilities. However, Hydro-Québec – the provider of the energy – has always had concerns that its role first and foremost is to make sure it can meet the requirements of the residents on a consistent, day to day operation. The firm has always been worried that by taking on the requests for crypto mining it will put this into jeopardy.
It has indeed been a rocky road for Quebec in terms of crypto mining. Over the last few months alone both the government and the power supplier have made statements about their feelings on mining. They have both always wanted to secure a decent return of investment from the Bitcoin companies to ensure their residential customers did not get hit with a huge rise in their power supply. However both were keen to get involved in the Cryptocurrency industry because they knew how important it was, it was just a matter of making sure that the right regulations were in place to support all of Hydro-Québec clients.
The New Proposal
Hydro-Québec took a wise decision to take time out and review everything before making a decision on whether or not to allow crypto miners to rely on their hydro power resources. This was a necessary decision considering that the requests received from crypto miners were way over the companies short term and medium term power abilities. The government in Quebec also intervened and requested that Hydro-Québec place a temporary ban on any Bitcoin requests in order for a new template for assessing their applications for power to be put into place.
It was suggested that the power supply reserves a pot of energy for crypto miners but the review would determine just how much. The result from said review is that crypto miners will now need to bid for the electricity needs. These new rules will streamline the application process and determine which Bitcoin miners can access the power source. The bid process will involve crypto miners putting together a proposal outlining the number of jobs, the pay for those jobs and the investments – all per megawatt. The crypto miners will be able to request up to 500 megawatts as well as the already available 120 megawatts. The proposed cost of this eco-friendly power is 20% more expensive than what is charged to residents.
In The Future
The regulator for energy in Quebec is still to approve the proposal from Hydro-Quebec so nothing is confirmed as of yet. Whatever the outcome of the proposal, it is very clear that Hydro-Québec has taken their review of their resources extremely seriously. And although it has been very keen to be involved with Bitcoin miners, the concern has always been the ability to support all of its customer’s needs throughout the year and especially in winter when the power required spikes. This is a great case study of how to approach crypto mining from a power supplier’s perspective.