You want to help level out peaks and troughs of electricty production: Improve battery technology, don't just waste the energy generating sha256 over and over.
Before: The energy from a hydro plants gets wasted when it is night time.
After: Now they get money.
The hydro plant is now making money on something that they were just throwing away, previously, and thus it is a subsidy.
Hydro plants can usually turn off relatively quickly. They can be used as pump storage, which is an incredibly efficient way of storing energy - >70% efficiency [1].
[1] https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...