Sichuan beckons power-hungry cryptocurrency miners to the home of the pandas with cheap and plentiful hydroelectricity
- Energy-intensive sector is expected to absorb the province’s excess electricity output
- Former vice-chairman of top securities watchdog asks conference to seek breakthrough in application of blockchain in finance
Cryptocurrency miners could increasingly be drawn to the Chinese province of Sichuan, potentially boosting trading demand for bitcoin from China, as the local government heeds a call by President Xi Jinping to step up blockchain development.
Xi told the Communist Party’s Central Committee last week that China should expedite the development of blockchain technology and actively integrate it into its economy. And over the weekend, Jiang Yang, a former vice-chairman of top regulator China Securities Regulatory Commission, told a town hall meeting in Beijing tasked with steering the strategic development of the province that Sichuan should continue to tap cheap hydropower to support blockchain and digital currency development.
“Sichuan should study further about how the province’s cheap hydropower resources can attract digital currency-related businesses,” he told the conference, as reported by Sichuan Daily.
Cryptocurrency mining is an energy-intensive process and some companies are already taking advantage of Sichuan’s cheaper electricity tariffs. The province, in south-western China, is blessed with a long rainy season, which starts in May and lasts about four to five months. As a result, the province is China’s biggest producer of hydropower. Last year, it produced 78.2 gigawatts and exported 104 billion kilowatt hours (kWh), or 30 per cent of its total output, to other regions. A gigawatt can power 830,000 Chinese households for a year. There are 1 million kilowatts in a gigawatt.
In the absence of adequate infrastructure at some hydropower plants, opportunities to export excess output have been missed. An increase in cryptocurrency mining is expected to help absorb this excess capacity and potentially boost the local economy.
During the rainy season, Sichuan’s electricity tariffs drop to as low as 2 US cents per kWh, according to a source, much cheaper than the 11 US cents reported in Guangzhou and Beijing, according to data provider CEIC.