Cryptographic centers are filled with computers that run 24 hours a day. (Photo: Paul Chiasson, The Canadian Press)
The surge in the price of cryptomoney such as Bitcoin did not go unnoticed at Hydro-Québec, as the « miners » showed a greater appetite for energy, allowing it to increase its revenues from these companies.
Last December, consumption in this sector amounted to 100 gigawatt hours (GWh) – the monthly consumption of about 65,000 single-family homes – up approximately 10% over the previous month.
« There was a spike in demand for power, but from existing customers, » explained a spokesperson for the utility, Jonathan Côté. This appears to be an effect of the rise in Bitcoin. »
Bitcoin, increasingly seen as a financial asset, broke records to end the year 2020 at around $37,000 Cdn, even though it hit a low of around $6700 Cdn in March. On Thursday, the virtual currency was trading near $47,500.
Cryptographic data centres are essentially vast spaces hosting thousands of small computers designed to make billions of attempts per second to confirm transactions, which explains the high energy consumption.
Last year, this sector generated $60 million in revenue for Hydro-Québec, an annual increase of 7%.
« What can be said is that the industry has carved out a good place for itself, » Côté said, adding that the Crown corporation did not anticipate a marked increase in new connection requests.
Hydro-Québec is also awaiting a decision from the Régie de l’énergie, which should define the framework for the encryption sector.
At present, the power available for this industry is around 400 megawatts (MW) – 210 MW in municipal systems and 190 MW on the Hydro-Québec grid.
« The fact remains that this is a volatile industry whose sustainability is not assured, which prompts us to be cautious about developing this customer segment, » Mr. Côté noted.
In Quebec, Bitfarms, whose shares are traded on the TSX Venture Exchange, operates five encryption centres and has a strong presence in Sherbrooke, where it has entered into a 98 MW guarantee of supply agreement with Hydro-Sherbrooke.
While anticipating an upturn in Bitcoin, the company’s president, Geoffrey Morphy, did not expect it to occur at the end of 2020. Bitfarms is not using all the power at its disposal, but this does not prevent it from investing in its facilities.
« We continue to renew our (computers) to make them more efficient, » he said in a telephone interview. We get more from the same energy consumption. »
Bitfarms, which is headquartered in Toronto but has 80 full-time employees in the province, is currently studying the possibility of adding a sixth centre, which could be located in Quebec.
Despite the fluctuations, current levels are attractive for continued growth, Morphy said, noting that the company’s annual energy bill is about $23 million.
« If (the value of) Bitcoin were US$15,000, the profitability would not be famous, » he said. But anything above that level is interesting. »
While they represent a source of revenue for Hydro-Québec and other municipal networks, the encryption centres, with their computers that generally operate 24 hours a day, seven days a week, can be a source of unpleasant surprises for residents if they are nearby. Large fans are needed to keep the facilities cool because of the heat generated by the facilities.
In Sherbrooke, the Bitfarms plant on de la Pointe Street, which began operations in 2019, has been repeatedly singled out by some local residents. After years of lobbying, Marcel Cyr, spokesperson for the citizens’ group for a return to silence, hopes that the issue will soon be resolved.
« Noise is always disturbing, » Cyr said on the phone. I was walking on a track about a mile from the plant and you can still hear it. »
Through complaints and meetings with local authorities, Bitfarms erected a noise barrier, which was modified on more than one occasion. However, the problem surrounding the noise still persists.
However, a solution may be on the horizon. Following audits by Sherbrooke and Quebec City, the company will have to submit an action plan by the end of the month detailing precisely how the problem will be resolved.