- Norwegian Finance Minister Trygve Slagsvold Vedum has asked the government to remove his crypto program.
- The crypto program allows home bitcoin miners to offer a reduced rate on electricity.
In his view, existing market conditions and the ongoing energy crisis in Europe are the main reasons for this change.
In 2016, the Norwegian government proposed some energy benefits for data centers and crypto miners by allowing them to offer lower electricity rates compared to normal consumers.
In line with Vedum’s point of view, the macroeconomic scenario has transformed excessively in the last six years, and that needs some transformation:
“We are in a completely different condition in the energy market now than when the reduced tariff for data centers was proposed in 2016. In several places, the energy supply is under pressure and, as a result, prices are inflated.
Meanwhile, we see growth with the inflated mining of cryptocurrencies in Norway. We need this potential of the community. Accordingly, the government will cease the scheme.”
The Minister further stated that the elimination of the program would produce an additional income of NOK 150 million for the country’s economy.
In the current situation, Europe’s electricity market is under great pressure due to restrictions on energy supply from Russia. One more factor to worsen the condition is COVID-19. Several companies cut their energy demands between 2020 and 2022. However, electricity producers were unable to handle the reactivated demand in recent months, which resulted in an increase in prices.
The green status of the country
Norway has recently become an attractive place for bitcoin miners. The country holds nearly 0.7% of the hash rate worldwide, which, acknowledging its comparatively small population, is still a significant figure.
It is noteworthy that the country has a totally green approach. A small portion of its power is generated by the wind; in turn, 88% comes from hydroelectric energy, since the humid climate and mountainous terrain favor it.
A few days ago, the local mining company, KryptovaultAS, promised to relocate its operations north of the Arctic Circle due to the vast sources of water in that region. Like many of its Norwegian rivals, the company generates almost entirely from renewable energy.