Blockchains becoming more important than data centers

Although Hydro-Québec has closed the door to the development of the blockchain industry, its importance is such that today it still requires twice as much electricity as the data center industry, according to a document filed with the Régie de l’énergie.

“This is the perfect example of the state-owned company’s lack of planning in dealing with the climate crisis,” reacts Jean-Pierre Finet, analyst at the Regroupement des organisms Environnemental en Énergie.

“Hydro-Québec has always had serious planning problems,” added Greenpeace Canada representative Patrick Bonin. It’s as if she never understood the urgency of decarbonization. This data shows us once again”

Twice as much for cryptos

The document submitted to the Régie de l’énergie entitled “Progress report 2023 of the supply plan 2023-2032” contains forecasts for electricity demand during peak periods in winter.

Based on its findings, Hydro estimates that the blockchain industry supporting cryptocurrencies required up to 287 MW of electricity at peak times in 2023. For comparison, data centers in Quebec required half as much, 137 MW.

While the demand of blockchains is limited to 287 MW for the coming years, the demand of data centers will continue to grow with their needs and the amounts of energy that Quebec grants them, explains Hydro-Québec owner and spokesman Maxence Hard-Lefebvre.

Remember that since the passage of Bill 2 in February, industrial projects have been subject to prior government scrutiny. Only projects that are considered the most promising or worthwhile will receive energy blocks.

Four more years

It will therefore have to wait at least four years, i.e. until 2027, before the electricity demand of data centers can exceed that of blockchains, as the forecast data on electricity demand prepared by Hydro-Québec shows.

This year (2027), data centers are expected to require up to 317 MW during winter peaks, the same level of power that greenhouse cultivation (vegetables and cannabis) will then require in the province.

From Hydro-Québec, Maxence Huard-Lefebvre says that despite the relative importance of the blockchain industry to its customers, the state-owned company has given itself the power to impose an interruption of services when peak demand increases in the winter.

Under certain conditions imposed on this industry, hydroelectric power can interrupt their electricity supply for up to 300 hours per year, depending on the needs of the province, without having to be compensated.

Pay for your mistakes

Quebec is now paying for years of recruiting blockchain companies and data centers to sell surplus electricity that Hydro thought was limitless, laments environmentalist and energy expert Jean-Pierre Finet.

At the time, he notes, Dave Rhéaume was one of the main people responsible for this crypto and data center race in Hydro-Québec. Dave Rhéaume is now vice president for integrated energy demand and risk planning at the state-owned company.

Shortly after the arrival of Michael Sabia at the helm of Hydro-Québec and the resignation of Sophie Brochu, Mr. Rhéaume was also given responsibility for customer experience, energy efficiency and pricing.

–With the contribution of Sylvain Larocque

FORECAST OF ELECTRICITY DEMAND PER USE AT THE END OF WINTER (IN MW)

2022 2023 2024 2025 2026 2027 2028 2029 2030
Blockchains 211 287 287 287 287 287 287 287 287
Data Center 127 137 153 172 244 317 389 462 532
greenhouses 186 203 236 269 286 317 343 352 368

Source: Hydro-Québec, 2023 Progress Report of the 2023-2032 Supply Plan, p. 21

CURRENT AND FUTURE ELECTRICITY CONSUMPTION (IN TWH)

2023 2035
Blockchains 2.1 2.2
Data center 1.0 4.8

Source: Hydro-Québec

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