The provincial government of New Brunswick has directed N.B. Power to halt the provision of electricity to bitcoin mining businesses, citing concerns over strained generating capacity. In response to an escalating strain on the current power supply due to the substantial electricity consumption of cryptocurrency mining operations, Minister of Energy Mike Holland introduced a bill on Tuesday to extend the existing moratorium indefinitely.
According to Holland, the significant power draw of the cryptocurrency sector necessitated the ban to safeguard the existing rate base and ensure adequate capacity.
Challenges Faced by Utility and Concerns over Increased Demand
Rising demand for electricity triggered the move, which will go into effect in March 2022, when the utility will secretly stop supplying power to any new crypto facilities.
Companies like Hive Blockchain Technologies and Chief Fuels, which use a lot of electricity to mine Bitcoin, are particularly affected by the prohibition. Compliance with federal climate standards and the aging of power plants put a burden on the present producing capacity, and crypto mining just adds to that.
The tenuous equilibrium between supply and demand was recently shown by N.B. Power’s near-misses with energy shortages in February and July. Despite the ban’s good intentions to reduce strain on the power system, opposition leader Susan Holt has called for prudence in regulating a sector that uses so much energy while producing so few jobs.
Holt voiced worry about knock-on effects and questioned the criterion for giving electricity preference to specific businesses.