Growing Demand for Electricity as Home Crypto Miners Flourish in Russia.
Russian Government Examining New Energy Infrastructure for Cryptocurrency Mining Hotspots
Russian Energy Minister Nikolay Shulginov has acknowledged the increasing demand for electricity due to cryptocurrency miners in certain regions, particularly Siberia where the industry has grown. He stated authorities are currently looking into developing power grids for mining companies, and building new power plants to meet these requirements, according to local media and cryptocurrency news outlets.
“The Ministry of Energy has always been about creating working conditions for mining.“, Shulginov stressed. He further noted that the consumption of electricity by the population has also increased and sometimes caused damage to the distribution network.
“We are seeing significant consumption growth in industrial mining areas, where the cost is lower. This is something we need to take into consideration.“,Shulginov added in an interview with the Russia-24 TV channel.
It is unlikely that it will succeed without the construction of power plants at the southeastern portion of the unified power system in Siberia.
Irkutsk Sees Low Electricity Costs for Crypto Miners
Cryptocurrency Mining has become a viable business opportunity for many people in Russia, a country with plentiful low-cost energy resources and a cool climate. Russians are mining in garages and basements, and according to a study, the bitcoin mining business generated revenue 18 times higher than that of the Russian economy before sanctions and markets.
Power outages and blackouts in countries such as New Zealand and the UK have been linked to mining. Irkutsk, also known as the mining capital of Russia, has some of the lowest electricity rates for miners. The proposal to introduce differentiated tariffs that increase energy costs for hobby miners and limit their consumption was supported by the Ministry of Energy, but was rejected by the local authorities of the Kemerovo region.
Early December saw Deputy Energy Minister Pavel Snikkars express that the industry could see a double-digit increase in its share of the total electricity consumed in Russia by 2022. The ministry and the Bank of Russia have also supported a bill to regulate cryptocurrency miners, though lawmakers have delayed its passage until 2023.
