Swedish Energy Minister Prefers Green Steel Over Bitcoin Mining

Sweden’s Energy Minister eschews bitcoin mining in favor of a manufacturing sector employing citizens.

In an interview, Energy Minister Khashayar Farmanbar said the country needs energy for more useful activities than bitcoin mining. He said that Bitcoin doesn’t even come into the argument when the manufacturing sector is considered.

Sweden‘s crypto mining sector has thus far enjoyed the benefits of primarily clean hydro and wind electricity in Sweden, which may hold the greatest concentration of mining power in Europe.

Under average weather conditions, the Nordic region, including sovereign states Denmark, Iceland, Norway, and Sweden, have a surplus of 30 terawatt-hours of clean electricity, the DW reports. This surplus has attracted heavy industry into the region, including steel-making from iron.

Bitcoin miners use computing power to solve complex puzzles, secure the bitcoin network, and receive bitcoins as rewards. While not human resource intensive, the process requires large swathes of cheap electricity and land. Mining operations’ profitability depends on miners’ ability to secure cheap electricity and the swings in bitcoin’s price.

Some of the big mining companies with operations in Sweden are Canadian company Hive Blockchain Technologies Ltd, and Hong Kong-based Genesis Mining Ltd. Genesis Mining uses a mix of hydro (54.5%), nuclear(42.8%), and wind energy(2.7%) and is based in the town of Boden on the east coast of Sweden.

How could the government clamp down on mining?

Farmanbar declined to elaborate on how the energy ministry would discourage mining, though there are two possibilities. The ministry could prioritize new power users based on their ability to benefit society through employment. SSAB AB, which manufactures sheet and plate steel for the automotive, engineering, and construction sectors, intends to open a steel plant powered by clean energy in the north. It believes the grid operators should give greater consideration to industries such as theirs instead of providing power on a first-come, first-served basis. The head of energy at SSAB AB believes it could reduce Sweden’s carbon footprint by 10%.

Another option could be to rescind tax incentives for data centers selectively. These taxes were initially targeted at traditional companies like Microsoft and Meta Platforms. Mining companies have thus far benefitted from these incentives by default, but that could change.

Competition for share of grid space

Increasing electrification of transport and battery plants means that the competition for grid space is more fierce than ever.

Mining accounts for a small percentage of the power used by data centers, says Erik Thornstrom, an advisor at Swedenergy. But Sweden’s share of the mining computing power could grow. In January, the Cambridge Center for Alternative Finance recorded its share of the global hashrate (computing power per second) at 0.8% of the worldwide hashrate.

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