Energy regulator in China’s Sichuan issued a written decision of administrative penalty imposing fines of 1.012572 million CNY (about 0.14 million dollars) on two hydropower stations that fed bitcoin farms in private.

The two power stations have not obtained the “power supply business license“, so it is a typical illegal power supply behavior for them to set up transmission lines for power supply without authorization.

According to China’s regulations, power stations cannot directly transmit power to consumers but sell power to power grid enterprises first, and finally transmit power to consumers after paying grid fees and government funds. If the power stations want to directly sell electricity to users, they must obtain the approval of the power regulator in advance, and their technical scheme of supply must be approved by the power grid enterprises to ensure the unit dispatching and power grid safety. At the same time, the “power supply business license” is a must.

However, when applying for the “power supply business license”, power stations will find that they cannot meet the corresponding conditions at all, and will not be able to do it eventually.

Sichuan is not only a province abundant in hydropower but also a province of ” hydropower abandonment”. The quantity of electricity abandonment has exceeded 10 billion kWh for many years, causing a huge waste of resources.

In order to promote the healthy development of hydropower industry and avoid the problem of ” hydropower abandonment”, China’s Development and Reform Commission and the National Energy Administration issued successively the notice on promoting hydropower consumption in Southwest China, making it clear that ” Southwest provinces like Sichuan, Yunnan are encouraged to use the low marginal cost of surplus water and electricity” Advantages: actively carry out direct supply of hydropower for consumer, and increase local consumption.

To apply for the “power supply business license”, it is necessary to have the power supply business area approved by the relevant competent authorities, as well as the power supply network and business outlets suitable for the power supply business. However, since the general power stations do not have the power supply business area, they are only simple power plants, so they can not apply for the power supply business license at all.