BC Suspends Electricity Connection Requests for Large Crypto Miners to Preserve Energy Supply

A worker at a B.C. Hydro substation in Vancouver in a file photo. (The Canadian Press/Darryl Dyck)

The British Columbia government has placed an 18-month suspension on electricity connection requests for cryptocurrency mining operations in a bid to preserve the province’s energy supply.

The provincial government says the one-and-a-half-year halt will also give it time, along with BC Hydro, to engage with the “industry and First Nations, and develop a permanent framework for any future cryptocurrency mining operations.”

Josie Osborne, the province’s Minister of Energy, Mines and Low Carbon Innovation, said crypto mining across the province was using up large amounts of electricity while creating “very few jobs” in the local economy.

“We are suspending electricity connection requests from cryptocurrency mining operators to preserve our electricity supply for people who are switching to electric vehicles and heat pumps,” Osborne said in a news release on Dec. 22.

British Columbia is home to seven cryptocurrency mining operations with around six more “in advanced stages of connection to the system,” which accounts for a total of around 273 megawatts of electricity, said Osborne’s department.

BC Hydro published a report this month saying that the province’s crypto miners could impede British Columbia’s transition to “clean energy.”

“The process of creating Bitcoin, for example, takes as much energy annually as powering a small country,” it said.

The report said that before crypto prices crashed earlier this year, BC Hydro received about “2,000 megawatts of interconnection requests,” which it said is enough to power around 900,000 homes in the province.

“If operations grow, there will also eventually be a need to create expensive transmission reinforcements that will put upward pressure on rates for all customers,” it said.

Mining Bitcoin requires far more electricity than mining other cryptocurrencies that operate on a proof-of-stake consensus mechanism, such as Ethereum or Cardano, rather than Bitcoin’s proof-of-work equivalent.

A White House press release published in September said that Bitcoin accounted for about 60 percent to 77 percent of worldwide crypto-asset electricity usage as of August 2022.

“The energy efficiency of mining equipment has been increasing, but electricity usage continues to rise,” it said in the release published Sept. 8.

“Switching to alternative crypto-asset technologies such as Proof of Stake could dramatically reduce overall power usage to less than 1% of today’s levels.”

Manitoba

The B.C. government’s decision to suspend new crypto-mining electricity connection requests follows a similar move by the Manitoba government last month, which also cited energy supply concerns in making the decision.

“We can’t simply say, ‘Well anyone can take whatever (energy) they want to take and we’ll simply build dams,’” said Manitoba’s Finance Minister Cameron Friesen on Nov. 28, who added that building the province’s newest dam cost $13 billion.

Friesen also the Manitoba government was also concerned that crypto miners use large amounts of electricity without creating many new jobs.

“You can be utilizing hundreds of megawatts and have a handful of workers,” he said.

The Canadian Press contributed to this report.