- Norway’s Finance Minister Trygve Slagsvold Vedum has called on the government to abolish its crypto program.
- The crypto program allows domestic bitcoin miners to offer a reduced rate on electricity.
According to his view, the existing market conditions and the continuing energy crisis in Europe are the main reasons for this change.
In 2016, the Norwegian government proposed energy benefits for data centers as well as crypto miners by allowing them to offer reduced electricity rates compared to normal consumers.
In line with Vedum’s view, the macroeconomic scene has transformed excessively over the past six years, and this requires some transformation:
“We are now in a completely different situation in the energy market than when the reduced tariff for data centers was proposed in 2016. In several places, the electricity supply is under pressure and, as a result, the prices inflate.
Meanwhile, we are seeing growth with inflated crypto mining in Norway. We need this community potential. The government will therefore end the program.
The Minister further stated that eliminating the program would generate additional revenue of NOK 150 million for the country’s economy.
In the current situation, the electricity market in Europe is under severe pressure due to tight energy supplies from Russia. Another aggravating factor for the condition is COVID-19. A number of companies have cut their electricity demands between 2020 and 2022. However, electricity producers have not been able to cope with the recovery in demand in recent months, which has led to an increase prices.
The country’s green status
Norway has recently turned into an attractive location for bitcoin miners. The country holds nearly 0.7% of the worldwide hash rate, which, given its relatively small population, is still a significant figure.
It should be noted that the country has an entirely green orientation. A small part of its power is generated by the wind; at the same time, 88% comes from hydroelectricity, because the humid climate and the mountainous terrain are the cause.
A few days ago, the local mining company, KryptovaultAS, promised to relocate its functions north of the Arctic Circle due to the vast water sources in this region. Like many of its Norwegian competitors, the company produces almost entirely with renewable energy.