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Sichuan province is well known for being one of the largest concentrations of bitcoin miners on earth because electricity costs are extremely cheap in the region. The data shows that miners using hydropower in Sichuan pay between 0.065-0.075 yuan or $ 0.01 per kilowatt hour. According to regional reports, a number of bitcoin mining firms have been allowed to exploit hydroelectric power consumption in the province.
Last April, news.Bitcoin.com reported on the local government of Ya’an city in China’s Sichuan province, revealing that it wanted bitcoin miners to tap into the cheap electricity offered by the region’s rich hydroelectric resources.
The government’s encouragement was in stark contrast to how Sichuan lawmakers felt about mining in 2018. However, Sichuan governments seem to want to create an approval program, as China’s state network has complained about the excessive use of electricity in the country.
On August 14, Chinese financial journalist Vincent He explained that miners who are not approved by local governments but who obtain direct power supply from hydroelectric plants “will be limited”.
Also, thanks to extremely hot temperatures in Sichuan this season, energy consumption has peaked and a number of farms have been closed by local governments.
On the same day that reports came out threatening that unapproved bitcoin miners were getting a direct supply of power from hydroelectric plants, a small group of approved firms got the green light.
Lylian Teng reports that the Chinese province of Sichuan has “recently revealed the second batch of demonstration enterprises for the consumption of hydroelectric power.”
Teng notes that these companies are registered under blockchain companies but in reality, these companies are simply bitcoin mining farms operating in Sichuan. It also notes that the second batch of approved miners follows the approval of the first batch by the Ya’an City Local Government.
Teng says Sichuan miners are paying much lower electricity rates than the world average. Teng insists that Chinese miners in Sichuan get 0.065-0.075 yuan or $ 0.01 per kilowatt hour during the rainy season.
He explained that the recent approval of the Sichuan government is aimed at strengthening “local economic development through the compliant use of hydroelectric power”.
The local report concludes by mentioning that Sichuan captures around 30 billion kilowatts per year. With government approval, the Sichuan area could consume about one sixth of the total 30 billion kilowatts.
“This figure is expected to double next year as compliance progresses,” admitted Teng.
What do you think of Sichuan Province officials encouraging bitcoin mining? Let us know in the comments below.
Image credits: Shutterstock, Pixabay, Wiki Commons
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