The Quebec province in Canada said yesterday that it would temporarily halt energy approvals for new cryptocurrency mining projects to be able to supply the whole province with electricity.
After booming demand in electricity from cryptocurrency miners, state-owned Hydro-Quebec will submit an application to Quebec's energy regulator Regie de l'energie proposing a strategy to select which blockchain companies will be supplied.
Since the province is known for having the lowest power rates in North America, cryptocurrency miners having been flocking to Quebec after a bid from the company to use surplus energy.
Pierre Moreau, Canadian minister of energy and natural resources, said: “The measures announced today represent a responsible, prudent and practical approach to welcome top businesses from the blockchain tech sector ...”
“To contribute to the economic development of other sectors and to create spin-offs throughout Quebec, while ensuring energy supply for all Quebecers.”
After receiving “hundreds of application” from blockchain operations, the company has now decided to restrict approvals in order to keep the entire province supplied with the energy it needs.
All of the operations who have applied for energy would have a total usage of more than 9,000 megawatts of electricity which is around 24 per cent of the company's total capacity of 37,000 megawatts.
Eric Filion, president of Hydro-Quebec distribution, said: “The blockchain industry is a promising avenue for Hydro-Quebec. Guidelines are nevertheless required to ensure that the development of this industry maximises spin-offs 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 possibly.”
In May, a study by Alex de Vries found that bitcoin mining alone could possibly account for half a per cent of the world's energy usage and, by the end of 2018, could be using the same amount of energy as the entire country of Austria.
De Vries, a blockchain specialist at PwC, said: “The bitcoin development community is experimenting with solutions such as the Lightning Network to improve the throughput of the network, which may alleviate the situation. For now, however, Bitcoin has a big problem and it is growing fast.”