Bloomberg: Electricity prices for Bitcoin miners in Scandinavia fall to multi-year lows

Sweden and Norway faced hydroelectric overproduction, which has driven tariffs down. The countries have again become a profitable base for Bitcoin mining, Bloomberg reports.

The wettest, at least in the last 20 years, weather combined with moderate temperatures raised reservoir levels to record highs. As a result, power surpluses over extended periods have driven electricity prices to near zero, the publication notes.

Last year, industrial tariffs in Norway were the lowest among the 30 member countries of the International Energy Agency. In the first half of 2020, electricity prices were slightly lower only in one EU country — Iceland.

The average tariff in Norway this year is one third of Germany’s tariff, the largest energy market in Europe.

The plunge in Bitcoin’s price from its 2017 peak and unprofitable electricity prices led many miners to leave Sweden and Norway in previous years.

Philip Solter, head of operations at the Hong Kong-based Genesis Mining, which runs a mining center in Boden (Sweden), commented for Bloomberg:

“Those who, like us, went through a tough period, are now quite happy. There were times when we did not make any profit at all, but profitability has risen more than threefold in the last year.”

Many miners who left the region may return. The publication notes that for cryptocurrency mining, the Nordic countries are attractive not only for low energy tariffs. Equally important are the use of renewable energy and the regulatory environment — these aspects matter to institutional investors who are increasingly entering the industry.

“There is a very important strategic shift of mining from China to Western countries such as Sweden, as Bitcoin investors are increasingly becoming public companies, and they want greater stability and critical security,” says Philip Solter.

Earlier Arcane Research noted that China is losing its leadership in Bitcoin mining. Their view was supported by Casa CTO Jameson Lopp.

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