Bitcoin Mining Added to List of Industries Facing Energy Caps in Iceland

Amid strained demand for renewable energy, Iceland is halting power to the Bitcoin mining industry.

By Scott Chipolina

Iceland is suffering a power shortage, prompting the country to cap supplies to some industries deemed to be surplus to requirements, per Bloomberg. 

The country’s principal utility provider, Landsvirkjun, is reportedly reducing supplies to aluminum smelters, data centers, fish meal factories, and Bitcoin miners. 

According to vice president of sales and customer service at Landsvirkjun, Tinna Traustadottir, record demand played a key role in the decision. 

This is the latest in a long line of challenges for the Bitcoin mining industry in the Nordic region, which has been hesitant to allow previous renewable energy resources to be taken up by the crypto industry. 

Iceland, Scandinavia, and Bitcoin

Bitcoin miners have descended on Iceland and other Nordic countries in pursuit of cheap electricity. 

To date, companies like Hive Blockchain, Genesis Mining, and Bitfury have all established a presence in Iceland.

Despite the country’s attractiveness, the country’s energy officials are less than keen to embrace Bitcoin mining. 

“There could be very little excess energy in 2021 and 2022,” warned Hordur Arnarson, Landsvirkjun CEO earlier this year. “Because of the climate issues we see a lot of very interesting segments that are growing rapidly, and several of them need electricity.” 

Elsewhere in the Nordic region, that very trend has prompted officials to go as far as banning energy-intensive crypto mining. 

Finansinspektionen, the financial supervisory authority in Sweden, did just that in November of this year. 

“Sweden needs the renewable energy targeted by crypto asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” the regulator said at the time, adding that “energy-intensive mining of crypto assets should therefore be prohibited.” 

The Swedish regulator is not the only one calling for a tougher stance on crypto mining, even if that mining utilizes green energy. 

“I’ve been saying for a long time you cannot sustainably waste resources—using renewables for crypto mining is no solution,” Digiconomist founder Alex de Vries previously told Decrypt.