NB Power pauses large new electricity customers during crypto review
NB Power says a service freeze on new, large-scale industrial customers in the province remains in place due to concerns that the cryptocurrency sector’s heavy use of electricity could be more than the utility can handle.
The Higgs government quietly approved the moratorium in a cabinet meeting in March 2022 and ordered a review of how the sector could affect the reliable supply of electricity.
The cabinet, submitted to the Energy and Utilities Board, said NB Power had “political, technical and operational concerns about [its] capacity to serve the expected additional load demand” from crypto-miners.
It said the utility had received “several new large, short-term service requests” to supply power to cryptominers that could put “significant pressure” on the existing supply of electricity.
The order, signed by Premier Blaine Higgs, said non-crypto companies should not be subject to the pause for longer than necessary for the review.
The review was due Dec. 31, but NB Power declined to provide a copy to CBC News.
“We cannot share the report as it was given to the Executive Council in confidence,” said spokesperson Dominique Couture.
The freeze was ordered just months after Taal Distributed Information Technologies Inc. announced plans to establish a 50-megawatt bitcoin mining and transaction processing operation in Grand Falls.
A city official said this week that the deal never went through.
24 hours a day
The Taal facility would have joined an existing 70 megawatt bitcoin mine in Grand Falls operated by Hive Blockchain Technologies.
Hive’s bitcoin mine consists of four large warehouses containing thousands of computers that run 24 hours a day trying to earn units of the cryptocurrency.
The combined annual electricity consumption of the two mines would exceed what could be produced by the small modular nuclear reactor being designed by ARC Clean Energy Canada in Saint John.
Put another way, the two mines would gobble up more than three months of electricity from NB Power’s coal-fired Belledune generating station.
No one from Taal responded to interview requests from CBC News.
“We are proud to operate in New Brunswick. Hive’s operations near Grand Falls predate the moratorium, so we are unaffected,” Hive CEO Aydin Kilic said in a statement Friday.
The CBC also asked Higgs’ office for a copy of the review and an interview, but there was no response.
The pause comes at a time when NB Power is facing a series of interrelated challenges about its long-term ability to generate electricity.
NB Power must stop burning coal at Belledune by 2030 under federal climate rules.
It is struggling to operate the Point Lepreau nuclear power plant, and it will soon have to decide whether to spend $3 billion renovating the Mactaquac dam.
The utility has investigated other energy sources for Belledune, but so far has not made a decision, and rebuilding the facility could be costly.
Utility officials told a committee of MLAs recently that the province faced record demand on Feb. 4 that left it on the verge of not being able to supply existing customers.
“It’s a trend. We’re going to set high demand records on a regular basis as we move forward,” said chief nuclear engineer Andy Hayward.
“We’re going to attract more population to the province. We’re going to attract industry to the province. Demand is going to go up.”
ARC Clean Energy said in February that its first 100 megawatt SMR will be ready to be installed at Point Lepreau by 2030, but it will not generate enough power to fill the gap left by Belledune.
Another SMR developer, Moltex Energy Canada, is working on a 300-megawatt reactor, but said it will not be ready in time for 2030.
In 2021, Kilic told CBC News that 70 megawatts of electricity consumption for the company’s bitcoin mine in New Brunswick was equivalent to powering 7,000 homes.
Michelle Robichaud, president of the Atlantica Center for Energy, an industry-funded research center, did not want to comment on cryptocurrency mining, but said the energy consumption of Hive and Taal did not appear to be a major strain on the network.
“It doesn’t necessarily go up or down. It’s a nice steady level,” she said. “I would think it’s not a huge addition to the system.”
JD Irving Ltd., the utility’s biggest customer, “voluntarily and proactively” scaled back its Saint John paper mill operations that weekend, and last July, to avoid higher power costs due to peak demand, communications director Anne McInerny said.
According to the Electricity Act, NB Power must give its customers “fair access” to electricity, but must also ensure the system’s “reliability”.
Bitcoin is a digital form of money that has risen in value and popularity worldwide over the past decade.
It operates without a central banking system, with transactions recorded on a digital ledger called a blockchain.
Bitcoin mines act as a decentralized banking network, constantly recording transactions worldwide and earning bitcoin as a reward.
The more computers a company operates to measure transactions, the more currency it will earn, but adding computers requires greater amounts of electricity.
NB Power has been forced to run its carbon-emitting plants more than usual in recent years because of Lepreau’s problems.
Some US electric utilities that supply crypto-miners have been forced to pass on higher production costs to other customers and, in some cases, have had to generate more electricity from sources that emit greenhouse gases.
Kilic said in 2021 that one reason the company set up shop in Grand Falls is that the colder climate allows it to ventilate the warehouses and keep computers cool without air conditioning — which would consume even more electricity.
