Lately, the media has had plenty of drama to print about involving Hydro-Quebec, with little of it being positive coverage.
Last week, on the topic of selling excess Hydro-Power, Moosepaper.com reported about our beloved Premier informing the media that “We [Quebec] are not interested in Bitcoin Mining”. He was establishing the (absurd) premise that while there is plentiful extra energy to sell, it was distasteful to sell this to bitcoin mining operations as it was an enterprise that “does not add value to society.”
At the time our disgust was plain, and it has since become worse.
On Monday, the city of Medicine Hat in Alberta agreed to supply 42 megawatts of electrical capacity at a maximum cost of $1,470 (3.5 cents per killowatt hour) to the world’s largest publicly traded bitcoin mining operation, Hut 8. Hut 8 is a Toronto-based company.
The electricity supply agreement as well as the land lease for the mining equipment have been signed for the next TEN years. A simple calculation shows that the deal will bring in at least $100,000,000 in revenue over the next decade, and easily much more.
A little explanation about Megawatts and Megawatt/Hours (Pronounced Megawatt Hours or Megawatts Per Hour), which will eliminate all confusion very simply:
Megawatts, in this case 42 Megawatts, is the capacity that Hut 8 can use at any given moment. If they have enough machinery, they can use 42 megawatts to power them. If they decide to turn on only some of the equipment, then they can use 40 megawatts, or 4 megawatts, or none at all, as they please.
Megawatts per hour is simply how much they will be paying for how much they use. If they use their maximum, 42 megawatts, for 1 hour, then they will be paying $1,470. If they use only 21 megawatts of their 42 megawatts capacity for 1 hour, then Hut 8 will pay $735. And so on.
It isn’t known whether Hut 8 intends to begin by using its maximum capacity of energy usage right away, but they have stated they plan to increase their maximum over time. Using a very simple calculator, and assuming that they will operate at maximum capacity, the amounts are as shown:
It takes no leap of faith to see that this will bring in massive amounts of revenue. 100 Million? 125 Million? 250 Million? Who knows what the future will bring. But clearly Couillard has no problem in throwing all this free money away, because it is “distasteful” to him.
This is insane. We are throwing away unused electricity, and therefore we are throwing away hundreds of millions of dollars of money to support our taxpayers, because some old codgers don’t understand technology or business.
How do we fix our defective politicians, in order to fix our defective policies?