Norway has scrapped a subsidy granted to cryptocurrency miners in the country, which could result in spiraling energy costs for operators the sector.
As reported by local news outlet Aftenposten, crypto mining companies will be required to pay standard electricity tax from 2019, after the government decided to remove the effective subsidy from its latest budget.
The development will pose serious problems for miners in Norway, who currently pay an effective 2.8% of the market rate for their energy. With the removal of the discount, which currently applies to several energy intensive industries in the country, miners will now have to stump up the full costs like most other businesses.
The news comes at a time of increasing difficulties for crypto miners, particularly Bitcoin Core (BTC), worldwide, with the collapse in BTC prices in particular pushing many to the brink and beyond. This week, U.S. mining firm Giga Watt became the latest high profile casualty, after filing for bankruptcy with debts of somewhere between $10-$50 million.
Scrapping the subsidy will mean firms that are currently paying just 0.48 øre ($0.00056) per kilowatt hour will have to pay at the standard rate, equivalent to 16.58 øre ($0.019) per kilowatt hour.
With power one of the main expenses for mining firms, the removal of the subsidy is likely to be another heavy body blow as the industry continues its wider decline.
Lars Haltbrekken, a representative of the Norwegian parliament said Norway could not continue to subsidize ‘dirty output’ like cryptocurrency. He declared, “Norway cannot continue to provide huge tax incentives for the most dirty form of cryptographic output like [BTC]. It requires a lot of energy and generates large greenhouse gas emissions globally.”
The announcement came without notice, with some analysts suggesting the change was made “without discussion, consultation or dialogue with the industry,” reflecting the increasing hostility from governments to cryptocurrency-focused businesses. Neighbouring jurisdictions may now look to follow Norway’s lead, in a bid to discourage the environmentally taxing process of mining for cryptocurrencies like BTC.
With the budget having passed through parliament, the chances will come into effect for remaining mining businesses from January.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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South Korea’s leading energy provider KEPCO has turned to blockchain to help it deliver eco-friendly power through its next generation micro grid (MG), becoming the latest firm in the energy sector to utilize the technology.
The company is majority owned by the South Korean government and the state-controlled bank, with what has been described as a “virtual monopoly” over the generation and distribution of power within the South Korean market.
The decision will represent a significant deployment of blockchain, with the technology working alongside other innovations to shape the new Open MG infrastructure.
In a statement, the South Korean energy provider said the platform will focus on what it termed the “three key trends” for the future of energy management—decentralization, decarbonization and digitalization.
Decentralization ensures energy stability and security, while decarbonization comes from more efficient management of energy sourcing and production. Digitalization will enable next generation systems to interact effectively, to more effectively manage output.
Previous MGs have experienced difficulties in producing stable power supply, with wind turbines, photovoltaic and energy storage systems being implemented by KEPCO prior to the new system.
Building on those experiences, Open MG will incorporate an “additional fuel cell” to underwrite fluctuations in output, which was explained by the firm as a way of increasing energy independence without additional greenhouse gas emissions.
The company press release describes Open MG is interoperable and based on international standard technology, which will help prevent demand squeeze and reduce bottlenecks in the system.
KEPCO said it intends to develop Open MG into South Korea’s first megawatt-scale micro grid, which will see the system distributing power more efficiently to end users nationwide.
In the last few weeks, KEPCO announced it had partnered with the University of Tokyo, Mitsubishi UFJ Bank and Nihon Unisys to research using blockchain for managing electricity supply.
The plans follow a decision this month from the South Korean government to increase the budget for domestic blockchain research to $35 million, a 300% increase on the previous allocation.
It comes amidst proactive efforts at government level worldwide to integrate blockchain technology in next generation systems, with a view to delivering more efficient public services and administration.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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