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Norway Finance Minister advocates for high electricity bills for Bitcoin miners

Norway Finance Minister advocates for high electricity bills for Bitcoin miners
Norway Finance Minister advocates for high electricity bills for Bitcoin miners

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The Finance Minister of Norway, Trygve Slagsvold Vedum, has urged the government to get rid of its crypto program. The program allows Bitcoin miners in the country to pay lower electricity bills, but according to the Finance Minister, the ongoing market conditions and the looming energy crisis were reason enough for the program to be scrapped.

Bitcoin miners should not enjoy energy benefits

Norway has attracted several Bitcoin mining companies because of the country’s friendly regulatory framework. In 2016, Norway launched several energy benefits targeting data centers. The benefits target cryptocurrency miners by allowing them to pay lower energy bills than general consumers.

According to the Finance Minister, the macroeconomic environment has significantly changed over the past six years. Because of the change, there was a need to make several changes that could accommodate the current macroeconomic picture.

“We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016. In many places, the power supply is now under pressure, which causes prices to rise,” Vedum said.

He added that within these years, there was a notable increase in cryptocurrency mining activities in the country. However, the government needed to make power available to the people, and one of the ways to do this was by scrapping the scheme.

Vedum also claimed that scrapping this program would boost revenues for the Norwegian government. He estimates that additional revenues of NOK 150 million, worth around $14 million, would be available to Norway’s economy.

The energy market in Europe is currently under pressure because of the events happening in Russia. Moreover, the COVID-19 pandemic worsened the situation in the power market. Between 2020 and the beginning of this year, many companies lowered their electricity demands. The demand that sprouted in the past few months has overwhelmed the market and triggered high prices.

Norway’s focus on renewable energy

Besides the friendly energy prices, Bitcoin miners have also eyed Norway because of its abundance of renewable energy. Norway accounts for around 0.7% of the global Bitcoin hash rate, which is a significant figure.

A small fraction of the electricity produced in Norway comes from wind, while 88% comes from hydropower because of the wet and mountainous terrain. One of the leading Bitcoin mining companies in the country, Kryptovault AS, announced plans to relocate its operations to the north of the Arctic circle because of the abundant water sources in the area.

Kryptovault AS produced most of Bitcoin almost entirely through renewable energy. Around 98% of the Bitcoin produced by the firm is generated from hydropower energy. The same statistics can also be depicted in other mining companies.

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