An Australian tech company’s Bitcoin mining operations in northern B.C. are unlikely to be impacted by an announcement by the provincial government suspending new cryptocurrency mining operations in B.C.
On Wednesday, the B.C. government announced it had suspended electricity connection requests for 21 proposed cryptocurrency mining operations in the province for 18 months. Iris Energy’s operational Bitcoin mining facilities in Prince George and Mackenzie were not expected to be impacted by the decision. According to investor information released by Iris Energy, their 50 MW Prince George facility was fully energized on Sept. 27 and the expansion of its Mackenzie facility from 50 MW to 80 MW was fully energized on Dec. 6.
“B.C.’s clean, affordable electricity has attracted unprecedented interest from cryptocurrency miners. Currently, 21 projects are requesting a total of 1,403 megawatts that will be temporarily suspended. That is equivalent to the energy needed to power approximately 570,000 homes, or 2.1 million electric vehicles, per year in B.C.,” a statement issued by the B.C. Ministry of Energy, Mines and Low Carbon Innovation on Wednesday said. “Cryptocurrency mining projects that are operational, and a small number of projects that are well advanced in BC Hydro’s connection process, will not be affected.”
Currently BC Hydro provides power to seven cryptocurrency mining operations, with six more in advanced stages of development, with a total combined power consumption of 273 MW, according to information released by the ministry. In addition to the 50 MW facility in Prince George and 80 MW facility in Mackenzie, Iris Energy has a 30 MW facility in Canal Flats, B.C. – a small community 100 km north of Cranbrook.
“Cryptocurrency mining consumes massive amounts of electricity to run and cool banks of high-powered computers 24/7/365, while creating very few jobs in the local economy,” Energy Minister Josie Osborne said in a statement issued Wednesday. “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, and for businesses and industries that are undertaking electrification projects that reduce carbon emissions and generate jobs and economic opportunities.”
According to Iris Energy, their facilities in Prince George and Mackenzie each have 15 full-time employees and their facility in Canal Flats employs 20 people full-time.
During the 18-month suspension on new cryptocurrency mining operations, BC Hydro and the provincial government intends to consult with industry and First Nations to develop a permanent framework for future cryptocurrency mining operations.
In an email, a spokesperson for Iris Energy and the B.C. Ministry of Energy, Mines and Low Carbon Innovation said the ministry could not comment on the status of individual cryptocurrency mining projects. However, cryptocurrency miners already operating in B.C. or at advanced stages of construction would not be impacted.
A spokesperson for Iris Energy did not return the Citizen’s request for comment as of Thursday afternoon.
B.C. ‘A GOLD MINE’ FOR CRYPTO MINERS
According to Coinbase.com, Bitcoin mining is, “the process that Bitcoin and several other cryptocurrencies use to generate new coins and verify new transactions. It involves vast, decentralized networks of computers around the world that verify and secure blockchains – the virtual ledgers that document cryptocurrency transactions. In return for contributing their processing power, computers on the network are rewarded with new coins.”
B.C.’s clean, cheap electricity makes the province an attractive place for cryptocurrency mining, according to a report released by BC Hydro this month.
“B.C. has some of the lowest electricity rates in North America and generates 98 per cent of its electricity from clean, renewable resources that are mostly hydroelectric,” the report authors wrote. “This makes B.C. somewhat of a gold mine for cryptocurrency miners who need incredibly large amounts of—preferably inexpensive—electricity to run their operations.”
Earlier this month, Iris Energy reported generating 151 Bitcoins in November earning $2.87 million USD in revenue. The company paid $1.9 million USD in energy costs, including penalties for cancelling hosting arrangements. The company earned an average of $18,955 USD per Bitcoin, at an adjusted energy cost per Bitcoin of $10,168 USD.
The massive demand cryptocurrecy mining puts on power grids has prompted jurisdictions including China, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia and Bangladesh to ban the industry, BC Hydro reported.
“Closer to home, some Canadian provinces and US states including Québec, Manitoba, New York and Idaho have placed restrictions on cryptocurrency mining,” the report said. “Manitoba has placed an 18-month moratorium on new cryptocurrency mining projects to meet rising energy demand, while Quebec has developed conditions for the cryptocurrency mining industry that include higher rates and require operations to be curtailed during seasonal peak demand periods.”