Coindesk reported that heavy rains in the Sichuan area of China has come to a head over the past few days and has affected power generation in the area. Xinhua news has also reported widespread flooding in the area as a result of the large amount of rainfall in such a short period of time.
As rains in the area filter down into large dams, hydroelectric power plants have had to shut down their operations and release large amounts of water through their sluice gates.
This has led to major electricity outages across the region which has affected a number of industries in Sichuan province, including a number of major cryptocurrency mining operations.
10 percent of global mining hashrate in Sichuan
It is estimated that nearly 10 percent of the global Bitcoin hashrate is generated by mining operations situated in the Sichuan province of China. That figure is according to data from Cambridge University’s Centre for Alternative Finance’s Bitcoin Mining Map.
The main reason for this is the region’s hydroelectric dams which create a cheaper source of energy, as has been previously reported by Finance Magnates. The low rates for electricity have drawn mining operators to the area over the past few years.
Sichuan’s electricity supply increases considerably during the rainy season and as a result the province is the biggest producer of hydroelectric power. With so much energy being created in the province, a major hurdle has been exporting that excess power to other regions. Reports suggest that only 30 percent of its excess power is sent to other regions of the country and the cryptocurrency mining sector was seen as an ideal outlet for the unused power generated from hydroelectric sources.
The South China Morning Post also revealed that the area’s electricity tariffs drop to as low as 2 cents per Kilowatt Hour during the rainy season which is considerably lower than other regions of the country.
Significant drops in hashrates
While the annual rains are an inherently important part of Sichuan’s ability to offer incredibly low electricity tariffs, severe rains can also have a negative effect, as is the case this week.
As Coindesk reported the world’s four biggest Bitcoin mining pools saw major hashrate drops between 10% to 20% over the past 24 hours. Poolin, F2Pool, BTC.com and Antpool saw similar drops.
The global hashrate dropped from 140.6 terahashes per second (TH/S) on August 14 to 105.3 TH/S at the time of publishing – according to data from Blockchain.com.