Norway & Bitcoin mining

How did Norway become the largest Bitcoin mining hub in Europe?


Norway has recently become Europe’s largest Bitcoin mining hub thanks to its cheap energy. But is there another reason for miners to develop mining operations in that arctic land of oil and cod?

Digital gold rush – why are Bitcoin miners heading to Norway?

Why do Bitcoin miners rush to certain countries and avoid others? Which countries have the most potential for developing new mining operations?

Bitcoin mining is a weird industry. Miners from all over the world centralize their mining farms in specific countries, and if the situation changes, the group instantly packs their graphics cards and moves to the next location.

So why Norway? One reason is the cheap energy. Bitcoin mining is such an energy-intensive business that the price has a considerable impact on the business’s profitability.

European mining giants have settled in Norway

According to a report by Norwegian analytics and research company Arcane Research, Norway has grown into a thriving Bitcoin mining industry despite its small population and geographical location.

Many of Europe’s largest Bitcoin mining companies have started operations in Norway. Among the mining giants who moved to Norway are, e.g. Northern Data, COWA, Bitdeer, and Bitzero. There are also some smaller local mining companies in the land of fjords, such as Kryptovault and Arcane Green Data.

How did Norway become the promised land of Bitcoin mining?

In the past few months, European digital gold miners have rushed to Northern Europe like it was Klondike back in the 1800s.

Norway currently has a vast amount of mining in relation to the country’s small size. But what drew all these miners to Norway? Given the size of the country and population, what makes Norway so attractive to Bitcoin miners?

The main reason is the energy price, which has risen sharply in Europe recently. In terms of energy, Norway is one of the cheapest countries in the world due to abundant hydropower and low demand.

Thanks to its mountainous terrain and humid climate, Norway has excellent starting points for producing hydropower. The construction of hydroelectric power plants began at the end of the 19th century. Since then, it has been Norway’s primary electricity source, providing plenty of cheap, reliable, and green electricity.

The Bitcoin mining industry is energy-intensive. It has received lots of public pressure because of its large carbon footprint. Therefore, Bitcoin miners are now prioritizing the efficiency of operations with renewable energy.

Bitcoin mining has sparked much debate and confusion among regulators and environmentalists worldwide. Mining consumes a lot of energy, some of which comes from fossil fuels.

Due to the criticism, miners have become more environmentally conscious and tend to choose green energy sources today. That’s why Norway, with its hydropower and cheap electricity, is currently popular with miners.

In addition, starting a company in Norway is easy! It ranks 9th in the World Bank’s Ease of Doing Business index. The ranking shows that the nation is politically relatively stable, and regulation is more favorable than in many other countries.

How many miners are there in Norway?

The University of Cambridge’s Bitcoin Electricity Consumption Index (BECI) measures the power demand of the Bitcoin network. According to the index, the average global electricity consumption of the Bitcoin mining industry is about 13.19 gigawatts (GW) per day.

The university’s Bitcoin mining map, which estimates each country’s hashrate share, further reported that Norway accounted for 0.74% of the Bitcoin network’s hashrate in January 2022. When this is multiplied by their estimated total Bitcoin network power demand (13.19 GW), the result says that Norwegian miners use 98 megawatts of power. This assumes that their hardware operates on the same level as the network average.

By mapping all the mining farms in Norway and using the university’s data, Arcane Research identified that Norway is mining Bitcoin at a rate of 120 megawatts per day. It is equivalent to 0.9 percent of the total Bitcoin mining hashrate.

Therefore, Norwegian Bitcoin miners produce almost one percent of the entire network’s hashrate. It is far from the biggest country, as the United States and China cover nearly 60 % of the entire network’s hashrate. But it is still a significant factor in securing the network.

The Norway map visualization below shows the mining farms in the country in April 2022.

The industry consists of a few local and several large international companies. Local players include Kryptovault and Arcane Green Data, while Northern Data, Bitdeer, Bitzero, and COWA are the largest global companies.

Norwegian energy production

According to the Norwegian Water and Energy Authority (NVE), Norway produces 88 percent of its energy needs with hydropower. Thanks to the climate and mountainous terrain.

In addition, 10 percent of the energy production comes from wind power and the rest from natural gas. In other words, 100 percent of Norway’s energy production is green energy with zero carbon footprint. This makes it a paradise for Bitcoin mining companies, who nowadays have to be more aware of the environmental impact of their mining.

Norway also has enormous potential to develop new hydropower, but obtaining permits has become difficult in recent years. NVE estimates that by 2040, only 11 TWh of new hydropower production will be installed, corresponding to an increase of only about 8 percent to the current capacity.

Wind power and solar energy are developed only slightly more. They will take a small share of the market from hydropower in the next 17 years, but hydropower will remain the indisputable number one.

The most important thing for a Bitcoin miner is to know that Norway will continue to use 100 % renewable energy.

Bitcoin miner escapes expensive electricity bills to Northern Norway

In 2022, the rising price of electricity forced the Bitcoin mining company to move from southern Norway to the north.

Kryptovault moved its operations north of the Arctic Circle, where electricity is much cheaper. According to the company’s CEO Kjetil Hove Pettersen, staying in the south would mean a doubling of the electricity bill, which had already been 21 million dollars in 2021.

What happened?

Norway has enjoyed the cheapest electricity in Europe because the costs of hydropower are practically non-existent. Norway is divided into five electricity price zones. Zone prices have historically been pretty much the same in all zones. However, the situation changed in 2021.

Over the past five years, the price of electricity in each of Norway’s price zones had generally remained between $0.03 and $0.05 per kilowatt-hour (kWh), except in 2020, when the price dropped below $0.01 due to heavy rains that filled hydroelectric storage.

In 2021, however, the price rose almost seven times in southern Norway. In central and northern Norway, the cost of electricity remained at the previous level.

There are several explanations for the sudden price differences between regions. However, the most significant factor is that the southern part of Norway is strongly connected to the European electricity market due to the underwater power lines opened in 2020 and 2021.

The energy crisis that hit Europe quickly spread to Norway, but it did not affect the electricity prices in the north. Below is a picture of Nordpool’s electricity price map, which shows that electricity is half as cheap in the north.

Due to transfer restrictions between central Norway and southern Norway, only the southern part of the country is fully connected to the European market. In the central and northern regions, prices are still low due to limited transmission capacity.

The future of mining in Norway

The energy crisis affecting Europe worsened in southern Norway when a dry spring drained many reservoirs important for local electricity production. The situation is different in the north. There is plenty of water, and it is difficult to direct the flows to other areas. Prices in the northernmost price zone have occasionally been a fraction of the prices in the south.

The conflict between Russia and Ukraine has led to skyrocketing fuel prices, which put upward pressure on the cost of electricity. Fuel prices are unlikely to normalize anytime soon, and the price of electricity will remain high in southern Norway.

Although there is plenty of water in the north, the cable capacity is not always sufficient to transfer the supply to the south, where most of the consumption is. The lack of water has been such a big problem that the government has considered curbing the export of electricity in order to secure domestic supplies.

Norway’s grid operator estimates that Bitcoin miners in Northern Norway have nothing to fear; prices will remain low in the north until 2027.

However, the Norwegian government is not the biggest fan of Bitcoin mining. It will increase the electricity tax for Bitcoin miners by $0.014 per kilowatt hour during 2023. A bill to ban Bitcoin mining was introduced in May 2022 but was rejected by the majority in parliament.

Norwegian Bitcoin miners want to contribute

Norwegian miners have tried to figure out how to increase their contribution to the energy sector. Alternatives have been offering balancing services in the power market or utilizing the extra heat generated from mining.

Energy-intensive industries, such as Bitcoin mining, have a growing need to help balance the power system as wind and solar increase their share of generation capacity.

The demand and supply of electricity must always be in balance. Usually, it has been managed by regulating the production, but since wind and solar energy depend on the weather, it is challenging to regulate their production amount.


Norway has recently become the number one destination for European Bitcoin miners. One of the world’s cheapest electricity has been one reason, but not the only one.

Bitcoin mining has received negative publicity due to energy consumption, and miners have therefore started to think about how they can utilize more renewable energy.

One hundred percent of Norway’s electricity production is green, and the country’s dependence on hydropower has provided an additional factor for miners who want to reduce their carbon footprint.

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