Digital assets have taken the world by storm, and bitcoin companies are looking for better places/countries to grow and scale. In this report, Atlas research team takes a look at the pros and cons of why Norway is the country-of-our-choice, and explained how companies could adjust business strategies to ensure a sustainable and compliant growth.
Norway is a country with a much milder climate than other parts of the world at the same latitude. The average temperature in Norway is as low as 2 degrees Celsius and as high as 9 degrees Celsius throughout the year. During the summer, the 24-hour average temperature in Northern Norway is about 14 degrees Celsius, while in winter, the temperature can go down to around -5 to -35 degrees Celsius.
The environment temperature will largely affect the rate of mining machines and reduce the machine's computing power. So, it is because of its excellent climate characteristics that Norway, where hosts 0.77% of Bitcoin's hash rate power, attracts crypto mining companies worldwide to build data centers there.
The energy in Norway is made up of more than 90 percent of hydroelectric power thanks to its mountainous terrain, and cold weather and the rest is wind energy. All of these contribute to Norway becoming a haven for Bitcoin miners who need to consider the environmental implications of their mining activities, running on 100% green energy with zero-carbon emissions.
Norway has also enjoyed the cheapest electricity in Europe because of the zero marginal cost of all hydroelectric power, between $0.03 and $0.05 per kilowatt-hour (kWh) during the last five years.
Neutral stance on mining
Generally, the Norwegian government maintains a neutral stance on mining, neither welcoming it as the United States does nor banning it as China does. Therefore, miners should be cautious and keep an eye on policy changes in Norway to adjust the strategy.
But Atlas, which focuses on more than Bitcoin, is committed to constructing Web3 infrastructure and provides computing power services for Web3. This guarantees Atlas a higher growth potential in Norway.
In light of Norway's low electricity rates, cold climate, and stable political environment, companies have been able to freely explore the crypto space's business potential. However, smart decision-makers will need to closely follow the factors that would affect the crypto industry and adjust their strategies accordingly.
Electricity prices differences
In 2021, a huge difference in electricity prices between the north and south emerged in Norway. Electricity prices in the south were about seven times higher than in the north.
The reason for such a large gap between north and south was that with the opening of new underwater power lines to the continent in late 2020 and early 2021, southern Norway was already closely linked to the electricity market in the rest of Europe so prices on the continent directly affected domestic electricity price. But for now, electricity prices will not rise sharply in the north.
According to NORDPOOL, the price of electricity in Norway, divided into five parts, from NO1 to NO5, on a daily basis. The prices in NO4 and NO3 are much lower, so they are the ideal places for most crypto mining companies to start their business.
In light of this, Atlas has found a power resource partner in northern Norway so that operating costs can be largely reduced while surplus power is guaranteed.
New cooling technology
The ventilation cooling system is another thing to consider. In Norway, ventilation cooling system is the most common and widely used technology these days. Immersion cooling technology, however, is much more efficient. Thus, ATLAS plans to apply this technology in Norway to improve service efficiency.
If you want to export machines to Norway, 25% import VAT is needed. In Norway, income tax is about 22%, and VAT is 25%, so high taxes will increase the mining company's costs. However, As a legitimate formal company, Atlas will strictly abide by the laws and regulations of the region, regulating economic activities and paying various taxes stipulated by the government.
Atlas research team will continue to provide insights on the bitcoin industry with the hope of helping our stakeholders grow and thrive.