And for now, new customers who are hoping to purchase energy to mine cryptocurrencies are being turned away.
Home to cheap geothermal energy, Iceland was a haven for Bitcoin mining in the cryptocurrency's early days.
Indeed, estimates have previously suggested that up to 8% of BTC's supply was created in the idyllic Scandinavian nation.
But hard times mean Iceland's stance is changing — and now, its national electricity company is cutting supplies to energy-hungry industries.
Landsvirkjun says Bitcoin mining firms on short-term contracts will be affected, as well as the operators of fishmeal factories and data centers.
And for now, new customers who are hoping to purchase energy to mine cryptocurrencies are being turned away.
These supply cuts were due to take place in January, but they have now been brought forward.
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'More Green Energy Needed'
Landsvirkjun generates 70% of all electricity sold in Iceland — and in a recent blog post, executive Gunnar Guðni Tómasson set out the challenges currently facing the company… and the country.
He revealed that demand for electricity has never been higher. While this means business is booming, the company "barely has the capacity to supply all electricity needed, not to mention embracing new opportunities."
With records being regularly broken, Tómasson wrote:
"Landsvirkjun’s electricity generating system has been under a severe pressure lately. In recent weeks, total capacity has been topped, repeatedly."
Tómasson went on to warn that there's no indication of demand slowing down in the near future — but building additional power plants, or extending existing ones, is a time-consuming process.
"Both options entail a long and complicated process, which takes at least a few years to prepare and execute, in some instances even decades."
The amount of computing power required to keep the Bitcoin blockchain secure has risen dramatically in recent years — and with climate change becoming a growing concern, the cryptocurrency industry has come in for criticism from environmentalists.
Elon Musk also sensationally announced that Tesla would stop accepting BTC as a payment method until miners can prove that 50% of the energy they use comes from renewable sources.
Parts of the industry have been stepping up to the challenge — and a few initiatives exist that are designed to make Bitcoin more eco-friendly.
Data from the Bitcoin Mining Council, covering the third quarter of 2021, suggests that the sustainable energy mix used by miners globally has hit 57.7% — more than Germany, the EU and the U.S.
But critics argue this is an extrapolation from a small sample size of 29 mining companies that represent just 33% of the entire network.
El Salvador is planning to build a Bitcoin City based at the bottom of a volcano that would be powered by geothermal energy.
But as reported by CoinMarketCap Academy, these plans may be derailed by water shortages. One of the country's foremost environmentalists, Ricardo Navarro, had told The Daily Telegraph:
"Talking about building this city beside a volcano is like thinking you are rich because you live next to a bank. Geothermal energy doesn’t need volcanoes. It needs groundwater, steam. But we already have problems with not enough water in El Salvador."
