Quebec is surrounded by Bitcoin mines and may become the next global mining center

David Vincent, business development manager at Hydro-Quebec, believes that the biggest achievement of the bill passed in 2016 to attract companies such as Facebook, Amazon, and Microsoft to build their data centers is that it has attracted a large number of Bitcoin miners.

The sales pitch was simple: Quebec offered abundant, cheap renewable electricity, plus cold weather and political stability.

Just six months ago, Vincent recalled, there was a surge in interest in Quebec from large commercial bitcoin mining operations, as digital currency prices soared and political uncertainty increased elsewhere.

Thirty-five cryptocurrency mining groups have inquired about access to Hydro-Quebec’s grid. Today, these companies account for 70% of Hydro-Quebec’s total electricity input.

In an interview with Coindesk, Vincent said:

“The demand is so great that I don’t need to do any marketing. I receive a cooperation proposal from a company almost every day.”

Cheap and abundant hydropower

Quebec is so attractive to Bitcoin miners not only because of its cold air. During World War II, the Quebec government built a large number of dams in the northern region, giving the area cheap and abundant hydropower resources.

Quebec has become the world's largest hydroelectric power supplier. Electricity here is quite cheap, with electricity prices as low as 2.48 cents per kilowatt-hour for data centers and 3.94 cents per kilowatt-hour for Bitcoin mining plants. It is slightly more expensive because the new jobs provided by mining farms and their contribution to the local economy are relatively limited. Elsewhere in North America, electricity prices are 50% to 3 times higher than in Quebec.

Political stability: a fatal attraction for Chinese mines

Another reason for the sudden surge in Quebec's crypto digital mining industry is that more and more mining farms are beginning to look for a stable political environment so that they can more confidently deploy long-term plans (4 to 5 years) for capital investment and commercial promotion.

Although some of the companies investing in Quebec are headquartered in North America, more and more organizations from other countries are joining Quebec, with companies from China being particularly prominent.

In China, there are rumors that the Chinese government plans to cancel the low-cost electricity and tax exemption policies for Bitcoin mining farms. What’s more, the People’s Bank of China is the most aggressive central bank in the world in terms of cryptocurrency, recently issuing a decree to ban ICOs and taking actions to shut down all Bitcoin exchanges.

Vincent said the bitcoin mining industry's interest in Quebec increased last fall, just as China introduced a crackdown on the cryptocurrency industry. He believes there is a connection between the two events, and that it was China's crackdown that pushed these mining companies to Quebec.

A mixed bag

Of course, while Hydro-Quebec still wants to grab these new customers, they prefer that they take the welcome seat for now, given the huge demand and the 24/7 operation of the mine. The power consumption is simply too huge.

Hydro-Quebec has another concern: Can the popularity of digital currency continue to be as popular as it is today?

However, for now, the biggest challenge facing Quebec Hydro is to find enough buildings and addresses as mines. In addition, ensuring that these mines can successfully recruit qualified people when they move in is also an issue at hand.

"Mine owners feel like they're losing money every day they don't operate. So they want big buildings that are interconnected, and they want them tomorrow. We have the capacity, but we're not used to the volume that's suddenly available. It's a mixed blessing."