In this news:
Those demands will only grow as the province transitions to electric vehicles, an important part of the province’s environmental goals, said Werner Antweiler, Associate Professor at the UBC Sauder School of Business.
Transitioning all of B.C.’s light duty vehicles to electric would require several terawatt hours of power — “So, up to ten, fifteen, twenty per cent of what we currently produce; we need more,” said Antweiler.
Projections from BC Hydro dating back to December 2020 for electricity demand did not account for the cryptocurrency mining industry boom in the province over the past three to five years. Now, the sudden growth in demand for electricity from crypto mining firms has forced the province to weigh the benefits of attracting new business to the province against the need to adhere to existing provincial climate goals and prevent higher electricity costs for ratepayers.
Like British Columbia, Manitoba and Quebec have similar concerns and have taken measures to delay or reduce unfettered electricity supply to industrial-scale cryptocurrency mining operations.
In 2022, Manitoba suspended all new connections with crypto mining firms to give the province time to develop a new regulatory framework in response to the new electricity demands. Hydro Quebec has increased its rates for crypto mining firms and capped the amount of electricity available to them.
Additionally, New Brunswick has issued a moratorium against all new large-scale, short-notice requests for electricity and new requests from cryptocurrency miners.
In 2022, the Ontario provincial government proposed to exclude cryptocurrency mining firms from an incentive program that would have allowed them to tame electricity costs. However, where things currently stand is somewhat unclear.
The notable outlier is Alberta, whose largely deregulated framework compared with other provinces provides an open-door policy for cryptocurrency mining firms with minimal regulation. Not only does the province see this as an opportunity to generate economic revenue, but ATB Financial — a financial institution and Crown corporation owned fully by the province of Alberta — has become a reliable banking partner for crypto mining firms.
Antweiler is not as convinced of the economic upside of these firms. “It generates absolutely no economic benefit,” says Antweiler. “[Cryptocurrency] is a speculative asset — it has no other use than to facilitate fraud, scams, and money laundering.
“This is a slow-burning Ponzi scheme,” said Antweiler. “The most successful Ponzi scheme probably in human history.”
Beyond that, the cryptocurrency industry is an environmental menace simply because of its insatiable demands on energy which in many places is generated by burning coal or gas, fossil fuels which have high carbon emissions that cause global warming.
A study from BC Hydro in 2022 warned that unchecked growth of cryptocurrency mining operations, and the ensuing potential for exponential growth in their use of electricity, could likely set back provincial climate and electrification goals. The consequences of which would ultimately be felt by consumers and ratepayers.
According to the same 2022 study, within a more global context, countries such as China, Egypt, and Qatar, have all banned cryptocurrency mining “because of concerns related to the environment, energy demands and the economy.”
Even as crypto markets plummet worldwide, crypto mining operations may pop up in deregulated regions where electricity is cheap, so long as the operations cost less to run than the value of cryptocurrencies.
Though, as more and more governments move to protect their electricity supply from overuse, there will be fewer and fewer places for these firms to go.
Justin Fiacconi / Local Journalism Initiative / Canada’s National Observer
.png)
