Canadian Province Reduces Energy Costs to Attract Bitcoin Miners




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energy costs of bitcoin mining

Bitcoin miners from Canada are making use of their country’s cold climate and a plentiful supply of hydroelectric power. The provincial governments of British Columbia, Quebec, Manitoba, and Alberta have all at one time offered reduced rates to attract bitcoin miners.

Labrador’s government is now thinking of reducing energy costs to attract crypto miners and data center processors who have been asking to set up shop in the province for a long time.

Surplus Hydroelectric Power

Labrador has one big hydroelectric dam named Churchill Falls. As it is, the dam provides the province with more energy than its residents need. This is because the province’s residents exhausted resources in fishery, mining, and forestry industries. This led to the closure of pulp and paper mills, firms dealing with processing fish, and traditional mines. On top of this, Labrador is building another dam named Muskrat Falls. When Muskrat Falls opens, the two dams will generate a lot of energy. Instead of the power going to waste, the provincial government has come up with a plan to ensure Labrador gets profits.

According to a report, Labrador’s government is working on a plan that will see the province host a lot of server farms for bitcoin. The government revealed that it seeks to start offering these services when the Muskrat Falls hydro megaproject becomes operational in the coming year. In so doing, the province’s government aims to make profits by selling excess power to firms that run data centers. Labrador’s government said there are outstanding requests for such services.

Dawn Dalley, the vice president of regulatory affairs and corporate services at Newfoundland and Labrador Hydro said,

Data businesses are expressing an interest and willingness to ‘take what’s available,’ and are requesting new transmission infrastructure to make more power available to them in Labrador, locating wherever the feed of power is possible.

The government’s decision to offer low-energy incentives comes after the cost of building the Muskrat Falls doubled to reach $12.7 billion. According to the government, it would need an additional $725.9 million to keep the dam running in its first year. It aims to reduce the tax burden placed on the shoulders of Labrador’s residents by selling surplus power to bitcoin miners. The government plans to keep the rates constant at 13.5 cents per kilowatt hour.

Bitcoin Miners are Actively Searching for Cheap Energy

This news comes after the province of Quebec tried reducing the energy cost to attract crypto miners. Within a short span of time, bitcoin miners flocked the province surpassing its expectations. The government had to pull back this offer. However, it continues to face an increased demand for energy.

According to a recent report, Chinese bitcoin miners have been moving out of their country in search for cheap power. They also search for countries with pro-crypto policies after China tightened its clampdowns on crypto.

Do you think the province of Labrador will provide enough power to sustain crypto mining for a long time? Let us know in the comments below.