A Troubled Energy Proposal Timeline
In a highly anticipated move, Hydro-Québec opened a Request for Proposals (RFP) in June for 300 megawatts (MW) of energy allocation aimed at cryptocurrency miners. If you thought the demand for power was going to light up the room, think again! Despite a supposed global hunger for approximately 16,000 MW of energy, only a mere 60 MW was approved.
Hydro-Québec’s Roller Coaster Ride with Crypto
The journey of Quebec’s embrace of crypto mining has been comparable to riding a very confused roller coaster. Initially, in March 2018, local authorities dismissed the idea of attracting miners, claiming they needed to bring some “added value” to the party. But by May, the province seemed ready to hand over the keys to the energy kingdom, only to slam the brakes a week later amidst an overwhelming number of requests.
New Rules, New Challenges
Fast forward to June 2018, Hydro-Québec, recognizing the chaos, proposed a structured bidding system where blockchain companies had to quantify the number of jobs and investments they would bring to the local economy. But the local officials waved goodbye to that proposal, leading to a cozy little compromise where the provincial power regulator set aside 300 MW specifically for crypto mining.
The Reality Check
Despite the hopeful outlook, industry experts like Jonathan Hamel, founder of Acadamie Bitcoin, are pointing fingers at Hydro-Québec’s overzealous estimates. According to Hamel, the energy board’s inflated demand figures of 16,000 MW were obliterated by real-world experiences, with the true demand likely hovering around 1,000 MW.
- Overzealous estimates by Hydro-Québec
- Demand likely closer to 1,000 MW
- Potential for better energy deals elsewhere
Where Have all the Big Players Gone?
The fallout from this energy misfire saw big names like Blockstream and GPU.one steering their ships elsewhere due to political and operational uncertainty. Blockstream’s CSO, Samson Mow, decided to maintain their existing Quebec facility, but he’s got his eyes set on the U.S. for future expansions. Talk about FOMO on Canadian energy!
A Local Mayor’s Woes
The local mayor of Baie-Comeau shared openly his disappointment that Quebec’s regulations made it difficult to secure investments. It seems Hydro-Québec prefers to keep American developers in the loop while his promoter was busy opening facilities in more welcoming provinces.
Why Miners are Saying ‘No’ to Quebec
Hamel pointed out that several other places around the globe offer much more seductive deals for miners. While Quebec’s Large Industry Rate hovers around $0.04 CAD per kWh, other regions boast prices as low as $0.02 CAD. This price difference is salty enough to send miners packing and surely, Quebec is left scratching its head as to why they didn’t bathe in crypto riches.
The Loss of Potential Revenue
As a result of these unmet expectations and the mad rush for more attractive offers elsewhere, Quebec has found itself staring into the abyss of lost potential—an estimated few hundreds of millions in energy revenue. In short, it appears that instead of riding the crypto wave, Quebec chose a quieter lake and lost out on a thrilling ride!
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