Bitcoin’s global hashrate dropped ten days ago following a coal mine accident that caused significant grid blackouts in Xinjiang, China. While initial estimates had shown more than 40% of the hashrate dropped, statistics from a five-day average show the hashpower only lost around 25%. Meanwhile, Chinese miners located in Sichuan may put more pressure on hydropower, as province officials have revealed electricity rates are scheduled to increase 150% this year.
Sichuan Electricity Trading Division Report Notes Electrical Prices in the Region Will Increase by 150%
Mining bitcoin is extremely competitive and miners are spread out all around the world in order to obtain the cheapest electricity rates they can acquire. Because electrical costs in China are far less than a great number of regions around the world, a large portion of bitcoin miners reside in the country.
At one time years ago it was estimated that more than 65% of the hashrate was in China, while more recent studies have shown the concentration has dropped to around 50% of the hashrate.
Following a recent hashrate drop in the province of Xinjiang, a regional report notes that people leveraging electricity in Sichuan may see an electrical cost increase. Financial columnist Priyeshu Garg explains that Sichuan electricity powered by carbon materials will increase by 150% this year.
The revelations stem from the Sichuan Electricity Trading Division who revealed the increase on April 10, 2021. However, the increase will likely be felt by non-mining entities leveraging Sichuan’s grid first, because officials want to decrease dependency on the use of thermal power from coal mines.
As Coal Mine Power Increases and Carbon-based Power Facilities Are Decommissioned, Demand for Hydropower Is Expected to Increase
China’s carbon-neutral policy aims to reduce the dependence on carbon-based power, making it so non-mining entities will be forced to use hydropower too. Bitcoin miners in Sichuan already use the region’s hydropower and can get around $0.02/kWh.
Priyeshu Garg says the relatively inexpensive $0.02/kWh rate in Sichuan increased by 16% since last year. The Sichuan Electricity Trading Division’s report estimates that bitcoin miners alone will consume 11.3 billion kWh in 2021.
The regional reporter notes that with the rainy season starting soon, more bitcoin miners are expected to migrate to Sichuan in mass numbers. Accordingly, this will boost the dependency on all hydropower resources and if other non-mining entities are competing for this type of power, hydropower could see a price increase follow suit.
The Sichuan Electricity Trading Division notes that the current amount of hydropower available is already short in supply.