Trygve Slagsvold Vedum, Norway’s finance minister, urged the government to abandon its crypto program that allows domestic bitcoin miners to pay a reduced fee for electricity.
According to him, the current market conditions and the ongoing energy crisis in Europe are key reasons for this modification.
BTC miners should not be treated differently
In 2016, the Norwegian government introduced certain energy benefits for data centers, including cryptocurrency miners, by allowing them to pay less for energy than general consumers.
According to Finance Minister Vedum, however, the macroeconomic landscape has changed dramatically in the last six years, and this requires some changes:
“We are now in a completely different situation in the electricity market than when the reduced tariff for data centers was introduced in 2016. In many places, the supply of energy is under pressure, which is causing prices to rise.
At the same time, we see a development with increased cryptocurrency mining in Norway. We need that community power. Therefore, the government will suspend the plan.”
The minister also claimed that eliminating the program would generate NOK 150 million (about $14 million) in additional revenue for Norway’s economy.
Currently, the electricity market in Europe is under great pressure due to limited energy deliveries from Russia. The COVID-19 pandemic is another factor that worsened the situation. Numerous companies reduced their electricity needs between 2020 and early 2022 (when the health disaster was at its peak). However, power generators have been unable to cope with renewed demand in recent months, causing prices to rise.
Green State of Norway
The Scandinavian country has recently become an attractive destination for bitcoin miners. The country accounts for around 0.7% of the global hashrate, which considering its relatively small population, is still a significant number.
What is worth noting is that Norway has a totally green approach. A small portion of its electricity is produced by wind, while 88% comes from hydropower, as the wet climate and mountainous terrain encourage this.
Not long ago, the local mining company, Kryptovault AS, promised to move its operations north of the Arctic Circle due to the large water sources in that area. Like many of its Norwegian rivals, the company produces bitcoins almost entirely from renewable energy (98% comes from hydroelectric power).
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