Trygve Vedum, the Norwegian Finance Minister, urged the government not to continue its crypto program which allows domestic Bitcoin miners to pay lower electricity rates.
He believes that the key reasons are the current market conditions in Europe and the ongoing energy crisis.
BTC Miners should not be treated differently
The Norwegian government offered certain energy benefits to data centers in 2016, including for cryptocurrency miners. They could pay less energy than the general population.
However, Finance Minister Vedum says that the macroeconomic picture has dramatically changed over the past six-years and that it is time for some changes.
“We’re in a totally different power market situation now than we were when the lower rate for data center was introduced in 2016. Prices are rising because of the pressure on power supply.
We also see an increase in cryptocurrency extraction in Norway. This is what we need. This will result in the government ending the scheme.
Further, the Minister claimed that eliminating the program would result in additional revenue of NOK 150 millions (approximately $14 million) for Norway’s economy.
Trygve Slagsvoldvedum, Source: Wikipedia
Russia’s low energy supplies are putting pressure on Europe’s power markets. Another factor that has contributed to the problem is the COVID-19 pandemic. Between 2020 and 2022, when the health crisis was at its height, many companies cut their electricity requirements. The increased demand for electricity in recent months meant that power generators were unable to keep up with it, leading to higher prices.
Norway’s Green Status
This Scandinavian country is now a popular destination for bitcoin miners. The country is responsible for 0.7% of global hash rates, which, considering its small population, is quite impressive.
It is worth noting that Norway has a completely green focus. Only a small amount of electricity comes from wind power, but 88% is generated by hydropower. This is because the mountainous terrain and wet climate encourage this.
Kryptovault AS, a local mining company, had recently pledged to move its operations north of Arctic Circle due to the abundant water resources in the area. The firm produces almost all of its bitcoin using renewable energy, 98% of which comes from hydropower, just like many Norwegian competitors.
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