Energy is not fully fungible. Local cheap energy can't be transported for use elsewhere, or else it would already have been.

Which might be a good reason why not every single Bitcoin miner is using hydro. If the expected payoff of mining is big enough to outweigh the increased prices of GPUs and nonrenewable energy, then I might choose not to move my setup to be next to a dam.

The same market effects that apply to factories, research facilities, server farms, etc... also apply to cryptocurrency mining. We can't have our cake and eat it too -- if energy isn't fungible, then not every mining rig is going to be set up using the most efficient power source in the world. Not every miner is going to have the ability to just "choose" to use cheap renewable power, and if mining is still profitable where they are using the power sources available to them, then they're still going to do it.

It's better and cheaper to use locally, but unless you find a plant that is unable to sell capacity, you're taking it from something else.

True, it doesn't make sense to move the power all the way around the world, but that's also not really how things like the synchronous grid of Continental Europe works, where power is traded across 24 countries on a single grid.

If your have cheap renewable energy, when you start selling, excess non-renewable capacity and more expensive plants in general powers down in nearby areas and countries.

Any power taken from a renewable plant there when power price is positive means increased non-renewable output.