It probably doesn't sound right, because it's simply not true.
First of all, Noranett isn't a power company - it's a grid operator. It runs the wires, but it doesn't sell electricity. The 20% increase is true, but that only affects the transport fee[0], not the cost of the electricity itself. The price increase is solely because the cost to maintain the infrastructure remains essentially the same, but there are now fewer people paying for it.
Second, it only impacts the municipality of Hadsel, which has a bit over 8000 inhabitants. The current connection costs are about 500-1500 NOK / month, plus 0.24 NOK / kWh[1]. The average household electricity use is about 1400 kWh / month[2], so the average total grid fee for someone in Hadsel would currently be about 1336 NOK, which is $127 - and that's probably an overestimation.
So no, a rise of 20% over ~$130 is not $300. They probably meant a rise of 300 NOK, which is about $28, and indeed a rise of 20% from my very rough $130 grid fee estimate. The impact on their overall electricity bill will of course be quite a bit less.
Besides, the grid fees in Hadsel were actually artificially low: the fees for nearby municipalities were significantly higher, and saw larger price increases[3]. If anything, the Bitcoin mining operation temporarily subsidized the local population's electricity network!
[0]: https://www.noranett.no/media/pressemeldinger/okning-av-nett...
[1]: https://www.noranett.no/nettleiepriser/nettleiepriser-hadsel...
[2]: https://www.ssb.no/en/energi-og-industri/energi/statistikk/e...
[3]: https://www.noranett.no/media/artikler/nettleie-i-hadsel-med...
A website with "bitcoin" in its URL is misleading? Shocking!
/S
The problem here seems to be that Noranett wants to keep the same revenues despite selling less electricity.
I don’t think that a point in favour of Bitcoin, it’s a point against the idea of “revenue must grow at all costs”
Most electricity local distribution undertakings run on a cost plus model. If their costs increase, they are permitted to have higher profits as regulators set rates such that profits are a percentage of costs. There is no incentive for grid operators to become more efficient or to avoid needless waste. This works out great for grid operators, but means the general public can only ever expect higher prices for the same service.
That was one of my first thoughts as well. The article sells this increase as a necessity, but with no note of whether that was to maintain profits or operating costs, further research may be required. My feeling is that it's the former though.
Noranett is a grid operator, and like most European grid operators is legally required to operate as a nonprofit. The only reason the revenue has to remain the same is because it costs the same to operate the grid. There are now just fewer people paying for it. More of a "economy of scale makes things cheap" than a "capitalism is bad".
Thanks! I appreciate the explanation and your fuller comments above too.
Interestingly, in the list of other articles at the bottom of the page was the previous entry in this story:
> Noise Complaints May Cause Norwegian Bitcoin Mining Center to Shut Down
From August, 2018! The earlier article also states that they were operating without permits for over a year by the time of that article. Sounds like the town has offered incredible patience.
Further:
> Many of the area’s residents have been forced to evacuate bedrooms close to the venture’s primary facility and keep their windows shut throughout the day, even during the summer’s rising temperatures.
After 7 years of that, I think I would opt for the 20% increase in my electric bill as well.
> 20% increase in electricity bills for the town's residents
> residents are now faced with paying several hundred dollars more per year for electricity
> The company estimates bills could rise by up to $300 monthly
This doesn’t seem right, electricity in Norway is generally cheap, how can 20% raise cause hundreds of dollars difference for residential customers? Also I’d be totally willing to pay 20% more if that meant removing some annoying noise in my area.
Edit: maybe instead of dollars they meant Norwegian Krone? 10 NOK = 1 USD, that would make more sense
I’m trying to find the source of the $300 claim. Mostly it’s appearing on Bitcoin websites, which say it’s an estimate from Noranett.
At least one Bitcoin site is reporting the figure as $300 per year.
The Noranett press release announcing the 20% increase does not put a dollar (or krone) amount on it.
Norway seems to have an electric grid that even connects to other countries.. They are complaining about last mile maintenance costs divided by users?
That's the second crypto mine I've heard of that's affecting residents with noise within a couple of weeks. Are they nearer housing than normal datacentres or do they skimp on cooling system design because they are slapped up quickly and not expected to operate for that long? Or just reporting bias?
Skimp on cooling system. Basically the miners are on open air racks and then there is huge fans that really are not optimised for noise that are run as needed. So yeah in essence you can have something like electric leaf blowers running all the time.
Math doesn't really make sense for the 300$ figure. Say it is increase of 300, that means original would be 1500 a month. Which is something like 7500 kWh at 20 cents a kwh... A month, or 105 MWh a year... These figures seem really extreme. Even if it is the highest consumption month in the year.
Seems cheaper to just buy a noise dampener.
If I was anti-crypto, I would say "finally, they found a legitimate usecase for bitcoin for the avg Joe".
But I am not anti-crypo. So I will just say that they should restart mining, but this time with water cooling (alternatively: Norway is cold on its own... do they really need active cooling? just put the miner outside, lol)