Cryptocurrency miners seek cheap energy in Norway and Sweden

Cryptocurrency miners are moving in to Norway and Sweden to take advantage of cheap hydro-electric energy and low temperatures to power and cool their servers.

Iceland has been Europe's most popular location for miners of digital currencies such as bitcoin and ethereum.

But at 6.5 euro cents and 7.1 cents per kilowatt hours, respectively, commercial power prices in Sweden and Norway are cheaper than Iceland’s 8 cents and far below the European average of 11 cents.

The interest is good news for Sweden's Vattenfall and Norway's Statkraft, the dominant utilities in their countries. Supplying power to cryptocurrency miners is a tiny part of current business but the two state-owned firms have said they see it as an opportunity.

The process is energy intensive. Miners plug in thousands of servers at a time to get the computing power to produce cryptocurrencies, which is done by solving mathematical equations.

Miners of bitcoin will use about 130 terawatt hours of energy this year, matching Argentina's consumption or the projected usage of all the world's electric vehicles by the mid-2020s, according to Morgan Stanley.  “We’re on a global hunt to secure as much power as we can,” said Olivier Roussy Newton, director and co-founder of Canadian group HIVE Blockchain Technologies, which started mining ethereum in Sweden in January.

The company said it was expanding energy capacity for its crypto mining in Sweden to 17.4 megawatts, with funds available to ramp up a further 26.8 MW by September. Last month, it agreed to buy data centre company Kolos Norway AS for $9.9 million with a view to expanding its mining operations.

In March, US miner Bitfury opened a new $35 million mining data centre in Norway. The miner will be buying 350 gigawatt hours of pure clean energy from local renewable energy provider Helgeland Kraft.

Many bitcoin miners are looking at the area including the Chinese because of abundant cheap hydro power, said Bill Tai, a member of Bitfury's board of directors.

China's Bitmain, the world's largest bitcoin miner which recently set up a unit in Switzerland, has also been investigating Sweden and Norway's potential, two industry sources with knowledge of the matter said.

China accounts for around 70 percent of the crytopcurrency mining industry but Beijing has discouraged it in part, due to concerns about pollution from coal-fired power. This has forced them to look elsewhere.

"A lot of miners are keen to get into Norway and that includes Bitmain and other Chinese names," said Mark Collins, chief executive of CBH Consulting AG, a Zurich-based clean energy consultant running for the blockchain industry.

A second source with knowledge of the matter also mentioned Bitmain’s interest. “A number of nationalities are turning to the Nordics,” that source said.

Bitmain spokesman Nishant Sharma said the company would announce expansions in Europe and other regions as they occur.

He said he was not aware of any “special plans” for Sweden or Norway. Reuters