Norway’s Finance Minister Believes Local Bitcoin Miners Shouldn’t Pay Less For Electricity

Trygve Slagsvold Vedum, the Norwegian Finance Minister, has urged the government to scrap its crypto program that allows home bitcoin miners to pay a reduced rate for electricity.

In his opinion, the current market conditions and the current energy crisis in Europe are key reasons for this amendment.

BTC miners should not be treated differently

In 2016, the Norwegian government introduced certain energy benefits for data centers, including cryptocurrency miners, by allowing them to pay less for energy than general consumers.

However, according to Finance Minister Vedum, the macroeconomic landscape has changed drastically in the last six years and that requires certain changes:

“We are in a completely different situation in the energy market now than when the reduced tariff for data centers was introduced in 2016. In many places, the energy supply is now under pressure, causing prices to rise.

At the same time, we see a development with increased mining of cryptocurrencies in Norway. We need this community power. Therefore, the government will discontinue the scheme.”

The Minister further stated that removing the program would generate additional revenue of NOK 150 million (approximately $14 million) for the Norwegian economy.

Trygve Slagsvold Vedum
Trygve Slagsvold Vedum, Source: Wikipedia

Currently, Europe’s electricity market is under great pressure due to limited power deliveries from Russia. The COVID-19 pandemic is another factor that made the situation worse. Numerous businesses reduced their electricity needs between 2020 and early 2022 (when the health disaster was at its height). However, power generators were unable to cope with renewed demand in recent months, leading to higher prices.

Norway’s green status

The Scandinavian country has recently become an attractive destination for bitcoin miners. The country accounts for around 0.7% of the global hash rate, which, considering its relatively small population, is still a significant figure.

What is worth noting is that Norway has a completely green approach. A small fraction of its electricity is produced by wind, while 88% comes from hydropower, as the humid climate and mountainous terrain stimulate it.

Not long ago, the local mining company, Kryptovault AS, promised to move its operations north of the Arctic Circle due to the vast water sources in that area. Like many of its Norwegian rivals, the company produces bitcoins almost entirely from renewable energy (98% comes from hydroelectric power).

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