Bitcoin Mining Posing Electricity Dilemma for Iceland, Says Energy Producer

The Bitcoin mining frenzy is hitting Iceland as the country struggles to power its homes amid high demand for electricity from juice-hungry data centers.

Iceland is currently going through a cryptocurrency mining boom of sorts, which has put a lot of strain on the country’s energy grid.

Johann Snorri Sigurbergsson, director of business development at local energy provider HS Orka, said that the electricity demand from mining centers might surpass that from homes.

“What we're seeing now is... you can almost call it exponential growth, I think, in the [energy] consumption of data centers,” he told the BBC.

According to him, if demand keeps growing and all projects come to fruition, “we won't have enough energy for it.”

Iceland is a country whose population numbers only about 340,000. Most of its citizens live in the capital city of Reykjavik and the surrounding area on the southwest.

Sigurbergsson estimates that Iceland’s Bitcoin mining operations alone will consume roughly 840 gigawatt-hours of electricity per year, whereas households consume a total of 700.

“I'm getting a lot of calls, visits from potential investors or companies wanting to build data centres in Iceland,” he added.

He said there was no way the country could cope with the electricity demand from all incoming data centers.

Smári McCarthy, a member of parliament representing the local Pirate Party, has criticized the influx of mining centers, saying that Icelanders would not stand to benefit from their presence since this activity requires “almost no staff, very little in capital investments, and mostly leaves no taxes either.”

Bitcoin mining is a well-known energy hog globally, with the amount of electricity consumed by miners as of November last year totalling 24 terawatt-hours per year, enough to power the entire country of Nigeria.

Only a month later, this figure grew to a whopping 34.6 terawatt-hours per year, far surpassing Ireland’s energy consumption.

If this trend continues, Iceland won’t be the only small country hit by energy woes due to cryptocurrency mining demands.