In recent months, China has banned almost all mining in its territory. As a result, some hydropower plants are producing unused energy. As an unexpected consequence, the province of Guizhou wants to use this energy to promote electric cars.
The unexpected consequences of China’s mining purge
Started last April, China’s Bitcoin (BTC) mining purge remains one of the most sensitive cryptocurrency news stories of the moment. In total, several provinces have been served with the obligation to stop their activity by the Chinese government, including Yunnan and Sichuan. As an immediate consequence, at least 10% of the world’s Bitcoin hashrate has been lost as a result of these forced closures.
A rather unexpected consequence of the Chinese government’s purge was that hydroelectric power plants were shut down while being used by the mining farms.
These idle power plants represent a real environmental and economic mess. Indeed, China’s goal of carbon neutrality in 2060 relies on hydroelectric power plants to produce green, decarbonized and ultimately cheaper electricity.
China: allocating unused energy to electric cars
Among the provinces that have banned mining, Guizhou is not necessarily the best known. However, it is the first to date to attempt to remedy the problems of unused hydroelectric power. Guizhou has planned to build at least 4,500 charging stations for electric cars in 2021, 5,000 in 2022 and 5,500 in 2023.
By 2023, the ambitious goal is to provide Guizhou’s population with 38,000 charging stations, or one for every 1,000 inhabitants. By comparison, there is just under one charging station for every 2,000 people in France.
According to the latest estimates, the shutdown of much of China’s BTC mining activity has freed up more than 50 TwH of electricity. To get an idea of what this represents, 50 TwH can power a city of one million people for 33 years or meet the charging needs of 10 million Tesla Model 3s per year.
BTC mining remains under the spotlight outside of China
On the miners’ side, because of the extensive history of Chinese mining, news from China is the most scrutinized. Yet the Beijing government is not the only one to have taken action against Bitcoin mining. Last May, the government of Iran also temporarily banned the activity to avoid possible power cuts during the summer.
In Kyrgyzstan, a country from which little information filters down on the subject of cryptocurrencies, BTC mining is said to be one of the main culprits of the country’s energy crisis according to a former senior local government official. Because of these limitations, Bitcoin miners have been forced to export to other countries, including the United States.