HydroQuebec CEO Éric Martel recently announced the utility will attempt to attract more business from Bitcoin mining farms.
The move is spurred by a decrease in demand for electricity in the area. The decrease in demand has begun a “spiral of death,” Martel told Le Journal de Quebec.
The implementation of smarter, more energy efficient electronics in homes and businesses has led to a decrease in power consumption. The decrease in power consumption further coincides with an increase of homes using solar power to generate their own electricity. If HydroQuebec cannot generate enough revenue to pay for the maintenance of the network, then the price of electricity increases.
Faced with a crisis to either find exporters or build a home-grown solution, HydroQuebec began a campaign to attract businesses that consume a large amount of electricity.
HydroQuebec innovating with existing resources
Initially, the province was hoping to attract data centres run by large internet companies like Facebook and Microsoft. Their incentive is cheap power, cold winters to keep the centres cool, and a politically stable environment.
The province is pleasantly surprised to find this sales pitch is attracting a new type of business: Bitcoin mining farms.
Bitcoin mining farms need to find cheap electricity, so they can maximize profits. The process of Bitcoin mining is extremely power intensive; the estimated power consumption of the entire network is more than that of all of Ireland.
Another factor contributing to the profitability of Bitcoin mining is the temperature. Thousands of computers running all day and night generate a lot of heat inside the mining farms. The cold Canadian winters would alleviate the need for expensive air conditioning units inside the farms.
Right on time
The move from HydroQuebec coincides perfectly with China’s recent announcement that it will be cracking down on Bitcoin mining farms.
China’s affordable electricity has made it home to some of the world largest Bitcoin mining farms. The Chinese government, however, has been doing its best to subvert the industry. In September, China announced it would be forcing all Chinese digital currency exchanges to halt all trading. The area has become so critical to the Bitcoin ecosystem that the news caused the price of Bitcoin to plummet temporarily.
The move by China to stifle Bitcoin productivity in the area may be a benefit to Canada. BTC.Top, the world’s third-largest Bitcoin mining firm, has already announced it has plans to open mining farms in Canada.
Canada has already become a leader in blockchain innovation and soon it may also be a hotspot for Bitcoin mining. The mix of HydroQuebec’s announcement and China’s crackdown put Canada in a unique position to capitalize on the explosive growth of the blockchain industry.