Canada's largest utility, Hydro Quebec, says it is facing "unprecedented" demand from cryptocurrency mining, and has temporarily blocked servicing much of this demand until it finds a sustainable rate structure for blockchain-related processing.

Why it matters: Despite a precipitous drop in the value of many cryptocurrencies this year, the energy demands of the architecture behind such cryptocurrencies — blockchain and distributed ledger technologies — continue to grow. It is presenting challenges, but also opportunities, particularly for utilities in developed countries that are desperately searching for new sources of demand growth.

The big picture: Blockchain-related power demand already outstrips that of electric vehicles globally, and Quebec is not alone. From Beijing to Tbilisi and beyond, blockchain-based processing is searching for low-cost electricity wherever it can be found, whether due to abundant renewable resources or price-distorting subsidies.

Hydro Quebec had until recently been courting cryptocurrency miners — touting its cheap, abundant, hydro-derived electricity — but was quickly overwhelmed with blockchain requests that represented over a quarter of its total generating capacity.

What's next: It's now up to governments and utilities to work together to harvest this potentially significant new source of electricity demand in a way that maximizes low-carbon power output and still ensures the ability to meet moments of peak demand.

David Livingston is deputy director of the Atlantic Council’s Global Energy Center.