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How Norway has turned into a green oasis for Bitcoin mining

How Norway has turned into a green oasis for Bitcoin mining

By CNBCTV18.com  IST (Published)

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As per data from the Cambridge Bitcoin Electricity Consumption Index, the average annual global power consumption of the Bitcoin mining industry was around 15.92 gigawatts (GW). Using this data and by mapping-out all the Norwegian mining outfits, Arcane was able to identify 120-megawatts worth of active Bitcoin mining coming from Norway alone. That's equivalent to 0.75 percent of the total Bitcoin mining hashrate.

A report published by Arcane Research revealed that, despite its minuscule population and geographic spread, Norway is now home to a flourishing Bitcoin mining industry.
As per data from the Cambridge Bitcoin Electricity Consumption Index, the average annual global power consumption of the Bitcoin mining industry was around 15.92 gigawatts (GW). Using this data and by mapping-out all the Norwegian mining outfits, Arcane was able to identify 120-megawatts worth of active Bitcoin mining coming from Norway alone. That's equivalent to 0.75 percent of the total Bitcoin mining hashrate.
It's not much of a surprise given that several Bitcoin mining giants, such as Northern Data, COWA, Bitdeer, and Bitzero, have set up shop in Norway in the last couple of years. These giants are also accompanied by a handful of smaller operations, such as Kryptovault and Arcane Green Data.
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What drew all these miners to Norway?
Bitcoin mining has drawn a lot of flak from regulators and environmentalists across the world. This is because it guzzles stupendous amounts of energy, most of which comes from fossil fuels. Therefore, miners are now mindful of picking green energy sources for added sustainability.
According to the Arcane Research report, Norway generates 88 percent of its energy requirements from hydroelectric power due to its mountainous terrain and wet weather. A further 10 percent comes from wind energy, and the remaining is supported by natural gas, which is consumed by its offshore oil operations. This means that 100 percent of Norway runs on green energy with a zero-carbon footprint. This makes it a haven for Bitcoin miners who need to be mindful of the environmental implications of their mining operations.
Since Norway relies on renewable energy, the electricity cost is also unbelievably low. In the last five years, Norway has paid between $0.03 and $0.05 per kilowatt-hour (kWh), with the lowest being $0.01 in 2020, as reported by Arcane Research. Although the country witnessed a ~10x price increase in 2021, touching $0.15 per kWh, it remains a lucrative deal for power-intensive businesses.
Arcane believes that Norway’s strong connection with the European power industry has the most significant role in attracting miners. New underwater power lines are already being set up between the continents, directly influencing Norwegian power prices.
Moreover, it is also much easier to establish and run a business successfully in Norway, which takes the 9th spot on the World Bank’s Ease of Doing Business Index. The ranking indicates that the nation is politically relatively stable, and the regulators are more lenient than other countries.
Building on the same, the Norwegian government also reduced the power tax for energy-consuming businesses from $0.017/kWh to $0.0006/kWh in 2016. This move was aimed at luring Google, Facebook and Amazon to set up data centres in the region. However, it is now home to Bitcoin miners instead.
Miners look to contribute to the Norwegian energy sector:
Arcane research also unveils that the share of solar and wind energy in Norway is steadily increasing. Both these energy sources depend on weather conditions, and their supply cannot be moderated based on the power demand. This warrants a proportional increase in the number of energy-intensive operations to strike the right balance between energy production and consumption.
Bitcoin miners in Norway have also started experimenting with waste heat from their mining hubs. Since heat is an excellent source of energy and is one of the major expulsions of a Bitcoin mining business, a mutually beneficial association could be formed with the Norwegian energy sector. Kryptovault has already been using its waste heat to dry out lumber. It then donates the same to a small industry that employs six individuals, thus supporting the local economy and sustaining jobs.
Summary:
Since the southern border of Norway is well connected with the European power industry, an increasing price gradient may be observed as we go northwards. Arcane research expects miners to scatter themselves all over the southern borders and make the most of the chilly weather and the abundant green energy supply. It may also potentially become a reason to further expand the Norwegian capacity of generating hydroelectric power.
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