Cryptominers are stuck in limbo as Hydro-Québec suspends requests for power

• Wary of cryptocurrency mining centres, some Quebec municipalities impose 90-day ban

Would-be cryptocurrency miners have been flocking to Quebec, due to the province's low-cost energy. The utility even promoted its services, offering a discounted rate to companies hoping to open data centres in the province.

But it was too much of a good thing.

Since March, the utility has put all requests for additional power from cryptomining companies on hold.

"At the moment, the volume of requests that we have received from the cryptomining scene is very large," said Hydro-Québec spokesperson Jonathan Côté.

"We're talking about more than 10,000 megawatts."

As Côté points out, that's a quarter of the total capacity of Hydro-Québec's network.

"That's a lot of power that is needed. We could not accommodate everybody."

No 'added value,' premier says

Cryptocurrency mining centres are essentially spaces filled with computers that solve math problems in exchange for digital currency. 

The more computing power the companies throw at the system, the better their chances of being rewarded with bitcoin or other digital currencies.

Access to cheap energy is crucial because the computers must be plugged in at all times, and keeping them cool requires a lot of electricity.

• What's fuelling the potential bitcoin mining boom in Canada

Sheffren decided to jump into the bitcoin mining business six months ago.

He managed to secure a location in Montreal's Saint-Laurent borough and spent more than $80,000 on computers and other infrastructure to start mining.

His initial talks with Hydro-Québec to get the necessary power were promising, but then he received notice that his request was on hold.

"I've invested countless hours in this business, not to mention the amount of money put in," said Sheffren.

"I'm going to have to close my business and take a major loss."

Sheffren blames Premier Philippe Couillard's reluctance to encourage the cryptomining business for Hydro-Québec's decision to impose a moratorium on requests.

Speaking at a news conference in March, Couillard said he wasn't interested in bitcoin mining.

"I don't see the added value," the premier said.

Sheffren begs to differ.

"Every machine that I host generates tax dollars," he said.

"I create jobs. I create jobs for technicians. I give work to lawyers, accountants. I provide a revenue for my family, and so on. There are many advantages."

Attracting data centres

Côté said Hydro-Québec had wanted to take advantage of its surplus of energy by encouraging companies to open data centres here.

"We were looking at the likes of Google, Amazon, Microsoft — and it's something that worked rather well," he said.

"We have some big data centres that have set up shop in Quebec. It's a good way to use our excess capacity, while creating jobs here, so that was a win-win situation."

What Hydro-Québec didn't expect was the volume of requests coming from would-be cryptocurrency miners.

"We're going to have to take the time to analyze all these requests and to look at all the other characteristics of where they want to set up on the network," said Côté.

"We have to make sure that locally, as well as globally, these projects make sense, and we are able to give them the power."

The utility expects to have criteria in place in the coming weeks.