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British Columbia has announced a suspension of new electricity connection requests from cryptocurrency miners for a period of 18 months. The decision was made in order to support the province’s climate change and economic growth objectives, as well as to allow the government to develop a permanent regulatory infrastructure for the crypto-mining sector.
The news follows a similar trend in Europe, where bitcoin miners have been forced to shut down due to rising electricity prices. Miners in northern Norway and Sweden, which have previously been popular locations due to their cheap hydroelectric power, have been hit particularly hard by the surge in prices. According to data from the European power exchange Nordpool, electricity prices in northern Norway have averaged 18 U.S. cents per kilowatt hour (kWh) this year, a significant increase from the previous three years. In Sweden, prices are even higher, more than three times the previous average.
The high energy prices have forced many miners to turn off their equipment in order to save on costs, with some shutting down as early as mid-November. The survival of these miners is now dependent on their reserve capital, ability to raise additional funds, and their level of debt.
The situation in British Columbia and Europe highlights the challenges faced by cryptocurrency miners as they seek out locations with cheap electricity. While these regions may have been viable options in the past, the recent surge in energy prices has made it difficult for miners to turn a profit, and it remains to be seen how they will adapt in the face of these challenges.