Advancing a Circular Energy Economy for Bitcoin Mining in Canada

Quebec attracts cryptocurrency miners through abundant hydroelectricity and globally competitive electricity rates. By 2019, Hydro-Quebec had approved approximately 368 MW of crypto mining load and allocated an additional 300 MW block through a competitive process [3] [4]. Serious requests from miners totalled approximately 1,000 MW, far exceeding available allocation [7].

Quebec’s regulatory architecture has three structural features:

First, a competitive allocation process requiring mining companies to bid for electricity access. Proposals are evaluated on local economic benefits, job creation, and energy reuse potential. Waste heat recovery received a 10 percent weighting in project assessments, explicitly incentivizing circular economy practices [4].

Second, interruptible power contracts requiring miners to reduce consumption during peak winter demand. This limits electricity use by miners for up to 300 peak-demand hours per year [5], preserving grid stability for residential and industrial customers.

Third, a dedicated mining tariff ("Tarif CB") at approximately CAD 0.1745 per kWh (subject to periodic adjustment; a 3.6 percent increase applied to most business rates effective April 1, 2025) [20] [6]. This tariff significantly exceeds standard industrial rates, ensuring miners cover grid infrastructure costs and discouraging speculative operations.

These combined measures successfully prevented uncontrolled expansion. However, Quebec’s strict approach also deterred investment: initial allocation filled only one-fifth of the newly reserved 300 MW block [7]. Many miners established operations in provinces with less restrictive conditions.

Assessment. Quebec’s framework is the most institutionally coherent among Canadian provinces. Its weakness is not strictness per se but static calibration: evaluation weights and tariff levels set at inception have not been systematically updated against measured outcomes. A dynamic recalibration mechanism, periodically adjusting scoring weights based on observed curtailment compliance, delivered heat volumes, and local economic contribution, would improve long-term effectiveness without sacrificing control.

British Columbia offers desirable mining conditions: renewable sources generate over 98 percent of the province’s electricity [8]. By late 2022, BC Hydro had received 21 project proposals totalling approximately 1,403 MW of additional mining load, equivalent to the annual generation of two large hydroelectric dams (about 11.7 TWh annually) [8].

The provincial government imposed an 18-month moratorium on new mining connections in December 2022, suspending all pending proposals to prioritize electricity availability for transportation electrification, industrial decarbonization, and residential heating [8].

During the moratorium, British Columbia passed Bill 24 (Energy Statutes Amendment Act, 2024), granting authority to restrict, regulate, or conditionally approve future electricity connections specifically for crypto mining [9]. The legislation enables regulations that can prohibit utilities from supplying electricity to miners for specified or indefinite periods, set capacity limits, and establish conditions for service provision.

Critical update. By October 2025, BC moved toward an effective ban on cryptocurrency mining, proposing new industrial electricity rules that prioritize resource development, AI, and data centres over mining operations. The BC Utilities Commission issued a Final Order suspending BC Hydro’s obligation to supply service to cryptocurrency mining projects. This represents a significant escalation from conditional regulation to near-prohibition.

British Columbia’s single operational demonstration of circular potential remains the MintGreen project in North Vancouver. MintGreen’s proprietary "Digital Boilers" use immersion technology to recover more than 96 percent of the electricity consumed by mining as usable heat, delivered through Lonsdale Energy Corporation’s district heating system to approximately 100 residential and commercial buildings [10] [21]. The project offsets roughly 20,000 tonnes of greenhouse gas emissions per megawatt compared to natural gas heating. As of April 2024, the project remained operational.

Assessment. BC’s trajectory illustrates the political economy of mining regulation. When the planning system cannot absorb demand at the scale proposed, and when the perceived employment-to-energy ratio is unfavourable, the policy response escalates from conditional management to exclusion. The MintGreen project demonstrates that mining can deliver genuine circular value, but a single pilot was insufficient to change the province’s trajectory.

Alberta operates a permissive, market-oriented approach. Its deregulated electricity market imposes few restrictions on mining operations. Miners contract power through private agreements or develop their own generation sources. Cheap natural gas, abundant fossil fuels, and readily available flared gas from oil production attract mining investment [11].

Alberta’s market structure incentivizes voluntary curtailment when electricity prices rise, providing short-term grid flexibility without formal mandate [1] [14]. However, voluntary behavior is not equivalent to dispatchable contracted demand response; miners face no mandated requirements for load curtailment or responsible grid behaviour.

The primary challenge is carbon intensity. Alberta’s electricity sector has undergone significant change: emissions decreased 60 percent from 2005 to 2023, with a 53.6 percent decline between 2015 and 2023 alone. The province completed its coal-to-gas transition in June 2024, and renewable energy (wind, solar, hydro) contributed approximately 19 percent of total generation in 2024, up from 17 percent in 2023 [12].

Despite this progress, Alberta’s grid remains substantially more carbon-intensive than Quebec’s or BC’s hydro-dominant systems. A typical 1 MW mining facility in Alberta generates approximately 5,300 tonnes of CO₂ annually [12]. This figure should be treated as approximate and declining with Alberta’s ongoing grid transition, but it remains an order of magnitude higher than equivalent operations on hydro-dominant grids.

Alberta’s renewable energy moratorium (August 2023 to February 2024) created additional uncertainty. While the moratorium technically lifted, the provincial government imposed significant new restrictions on renewable development: bans on renewable projects on high-quality agricultural land, 35-kilometre viewscape buffer zones around "pristine view" designations, and an overarching "agriculture first" policy [13]. These conditions were characterized as a moratorium "shifted, not lifted" [22].

Assessment. Alberta demonstrates that market-driven flexibility can support grid reliability but does not, on its own, address climate alignment. Without binding carbon-intensity standards or renewable procurement requirements, Alberta’s competitive advantage in attracting miners functions as an emissions subsidy. Off-grid flare-gas operations offer real methane abatement value, but claims must be verified against measured abatement outcomes, not promotional narratives.

Manitoba’s abundant hydroelectric resources attracted extraordinary interest. By late 2022, Manitoba Hydro received mining proposals totalling approximately 4,600 MW, representing roughly 75 percent of Manitoba’s total generation capacity of approximately 6,100 MW [6].

The province imposed an 18-month moratorium on new crypto-mining connections in November 2022 [23]. In April 2024, Manitoba directed Manitoba Hydro to extend the pause until April 30, 2026, to allow further analysis [24]. The moratorium does not affect 37 existing cryptocurrency operations already connected.

Assessment. Manitoba’s moratorium was proportionate to the scale of proposed demand relative to system capacity. The ongoing policy gap is the absence of a post-moratorium framework. Without defined criteria for selective reintegration, the moratorium risks becoming a de facto ban without the institutional clarity that explicit prohibition or conditional approval would provide.

Texas has established itself as a leading mining jurisdiction by leveraging its deregulated ERCOT market. Miners respond to real-time electricity pricing, reducing loads during peak conditions and earning compensation through ancillary services and energy resale. Riot Platforms received $31.7 million in combined power and demand response credits in a single month (August 2023), including $7 million from ERCOT’s ancillary services program and $24 million from selling pre-purchased energy to TXU Energy [25]. The company curtailed power usage by over 95 percent during peak demand periods.

Transferability. Canadian provinces with wholesale electricity markets (Alberta, Ontario) could formally integrate mining loads into existing demand-response or capacity markets. Provinces with regulated utilities (BC, Manitoba) might instead structure interruptible tariffs. The key lesson is not institutional replication but mechanism transfer: price-exposed or contract-bound flexibility as a planning instrument.

Under the Energy Efficiency Directive (EED), the EU mandates detailed reporting of Power Usage Effectiveness (PUE) and encourages waste heat recovery for large data centres [15]. Some EU jurisdictions require new data centres to connect directly to district heating systems or demonstrate feasible heat recovery [16]. The EU also explores sustainability labels for mining facilities meeting environmental benchmarks.

Transferability. Provincial regulators or Natural Resources Canada could set minimum PUE thresholds and mandatory feasibility studies for waste heat reuse above a defined capacity. A "green mining" certification system would provide market differentiation for compliant operators.

China dominated global Bitcoin mining before implementing a complete ban in 2021. The ban succeeded in eliminating domestic mining but displaced activity to jurisdictions with less regulated grids, producing uncertain net global emissions effects [17].

Transferability. Hard prohibition can reduce domestic exposure but redistribute rather than eliminate emissions. The relevant policy instrument is conditional access rather than blanket prohibition. Carbon-intensity-based approval thresholds, where provinces restrict or disincentivize facilities on high-emission grids unless operators secure verified renewable procurement or carbon offsets, offer better net outcomes.

Minimal new policy intervention. Provinces with existing restrictions or moratoria (BC, Manitoba) maintain them. New mining activity concentrates in provinces with fewer regulations, primarily Alberta, Saskatchewan, Ontario, and Atlantic Canada. Total national mining capacity increases to approximately 1,000 MW, reflecting global growth trends moderated by high provincial electricity costs and post-halving competitive pressure. Key outcomes:

Coordinated policy interventions distribute 1,000 MW of mining load across provinces under enforceable renewable energy, heat recovery, emissions, and demand-response requirements:

Quantitative outcomes:

The comparative outcomes are summarized in Appendix B, Table B.2.

Provinces should mandate demand-response participation for all mining facilities above 5 MW. Utilities must establish interruptible tariffs providing reduced off-peak rates in exchange for curtailment during peak demand or emergencies. Facilities must install smart metering enabling utility-verifiable load control. Provincial utility commissions would oversee tariffs to prevent cross-subsidization. Interprovincial standards should be coordinated through the Canadian Council of Energy Ministers to prevent regulatory arbitrage.

Provinces must require waste heat recovery for mining facilities exceeding 1 MW. Operators would submit standardized Heat Reuse Feasibility Studies during the project approval process, detailing potential local heat users: district heating systems, agricultural operations, or industrial processes. Where feasible pathways exist, implementation becomes a condition of interconnection. Facilities failing to implement feasible heat reuse face financial penalties or higher tariffs. Municipal zoning should encourage co-location of mining with district heating infrastructure.

Provinces must implement either renewable energy procurement obligations or carbon-intensity ceilings for mining operations. Options include Renewable Portfolio Standards mandating progressive procurement increases, reaching full renewable sourcing by 2030; or maximum carbon-intensity benchmarks requiring miners on high-emission grids to offset emissions exceeding defined thresholds through verified procurement or offsets. Annual third-party audits ensure compliance. National harmonization prevents jurisdiction-shopping.

Standardized disclosure tables should be published across provinces, covering curtailment performance, energy mix, heat delivery volumes, and emissions factors by site class. Public reporting demonstrates community value and enables interprovincial performance comparison.