In recent years, Bitcoin and crypto miners have turned to the Nordic regions. The region has an abundance of cheap and clean energy, a cold climate and a stable regulatory framework that make it ideal for mining cryptocurrency. However, this autumn it seems that Nordic Bitcoin miners may be facing double the challenge that they expected.
The price of electricity in the Nordic regions has risen sharply this autumn. Along with this, mounting political pressure has created a challenging environment for minors. Europe’s energy crisis has received a large amount of attention over the last month, with both natural gas and electricity prices soaring in a number of countries.
While the Nordic region is less impacted than various countries in the South, the rising prices have been felt by several major crypto mining operations based in Norway, northern Sweden and Iceland.
The current energy situation is vastly different from the region’s regular energy conditions. Energy analyst, Olav Johan Botnen, told DW last year that, under normal weather conditions, the Nordic region has an “expected oversupply of power of nearly 30 terwatt-hours a year.”
Findings from Statistics Norway showed that prices for Norwegian households in the second quarter of this year were three times as high as the previous year. Commercial users, including crypto miners, are not spared from the impact.
The power prices in Sweden also rose during the latter part of the year. In mid-September, Swedish news agency TT reported that electricity prices have never been higher, with Southern Sweden being the worst hit region.
CEO of Norwegian mining from Kryptovault, Kjetil Hove Pettersen, said that the cost of electricity is “always the single largest cost for any mining company.” Adding that an increase in electricity prices “naturally has a large impact on our financial result.”
Pettersen is not too worried about the effect of electricity prices for the future of the business. Instead, he is focussed on the price of BTC and the network mining difficulty. Pettersen said, “We are also quite optimistic about where the crypto market is headed in the future, so no, I am not worried about the coming years at all.”
Rising energy prices is not the only issue that miners in the region need to worry about. Politics could also pose a challenge to the crypto industry.
In a recent general election, some left-wing politicians called for a complete ban on mining within the country and others suggested that miners should pay more for the electricity that they consume. The representatives proposed that miners should have to pay the full electricity tax, as most other commercial users do.
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