Following the government’s crackdown on crypto miners, their demand for cheap energy has fallen, and small hydropower stations have been listed for sale in China. Just like mining equipment, their prices have been falling, leaving owners with limited options to recover their investment.
Advertisement of hydropower station appeared in idle fish market
According to the South China Morning Post, an advertisement for a small hydroelectric power plant was recently published on Xianyu, an online market. The capacity of “used” installations is approximately 50 megawatts. Since the government launched an attack on cryptocurrency miners in May, the number of these products has increased significantly.
Three sellers confirmed to the “Daily Mail” that due to the crackdown on mining, the power plant has begun to sell, and one owner said that their prices have fallen. Another seller apparently tried to convince potential buyers. He pointed out:
If you buy a hydroelectric power station, you can secretly mine cryptocurrency.
Some of the supplied factories are located in China’s Sichuan Province, and local officials reportedly ordered two dozen crypto mining facilities to shut down earlier this month. The region is rich in water resources and can provide cheap electricity. Local authorities have been promoting a symbiotic relationship between Bitcoin miners and hydroelectric power plants in the past.
Small-scale hydroelectric power plants turn to dense mining
Low-capacity hydroelectric generating units are also found in other water-rich areas, and local governments support private and public facilities. These power plants have played an important role in the electrification of remote rural areas in China. They have helped save energy, control floods, and alleviate poverty.
The Yangtze River Economic Belt, which includes nine provinces in China, is an example of such cooperation. According to data compiled by the state-owned industry media China Energy News, by the end of 2020, there are 25,000 small hydropower stations in operation in the region.
However, not everything is going well. The authorities accused the power plant of causing damage to the environment and ordered the shutdown. In the Yangtze River, about 20,000 such facilities had to take measures to comply with government standards. An on-site seller stated that operators have been turning to cryptocurrency mining because they are not allowed to connect to the grid.
Environmental issues are also believed to be the reason for the government’s crackdown on energy-intensive bitcoin mining and other industrial activities that may threaten Beijing’s carbon neutrality goals. China plans to reduce emissions to 65% of 2005 levels by 2030. In addition to Sichuan, other affected provinces include Inner Mongolia, Xinjiang, Qinghai and Yunnan.
The subsequent outflow of cryptocurrency miners from the People’s Republic of China also flooded into the secondary market of ASIC and GPU mining equipment. The surplus quickly reduced the price per unit and per computing power, leading to Bitmain’s decision last week to suspend mining hardware sales and international spot delivery.
Do you know the other consequences of China’s crackdown on cryptocurrency mining? Let us know in the comments section below.
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