New Power Plants in Siberia to Meet Miners' Growing Energy Demand
The energy minister of Russia has acknowledged that the growing electricity consumption in the crypto-mining regions may require new power generation facilities in Siberia. Demand is also growing in residential areas after regional authorities abandoned a proposal to introduce higher tariffs for Russians minting digital coins at their homes.
Russia Mulls Expansion of Energy Infrastructure in Crypto Mining Regions
The
Russian Minister of Energy, Nikolay Shulginov, has recognized the increased
demand for electricity from cryptocurrency miners in Siberia, where the
industry has been expanding. He indicated that additional generating capacity
may be necessary to meet their energy needs. The Russian media and crypto news
outlets have reported.
Shulginov did not reveal specific plans but made it clear that Russian authorities in the regions are considering the development of the energy grids used by mining companies and the construction of new power plants. He also noted that the grids in the Republic of Khakassia and Irkutsk Oblast are currently experiencing severe loads, according to Bits.media.
"The
position of the Ministry of Energy has always been based on the need to create
working conditions for mining," the minister said. He also referred to the
growing electricity consumption of the local population, which impacts the
distribution networks.
"As
for industrial mining, it is also growing, mainly in the regions where the
tariff is low." "There is significant growth in consumption in those
regions, and it needs to be taken into account," Shulginov said in an
interview with Russia-24 TV, adding:
"Most
likely, it won’t go without the construction of generation capacities in the
southeastern part of the unified energy system of Siberia."
Energy-Rich Irkutsk Offers Low Tariffs for Crypto Miners
Crypto
mining has been expanding in Russia, a country with abundant low-cost energy
resources and a cool climate. It is a profitable business activity and an
additional source of income for many ordinary Russians who mint coins in
basements and garages. According to a study published in October, bitcoin
mining revenue in Russia grew 18
times in four years before the markets and sanctions hit them together.
Home
mining has been blamed for breakdowns and blackouts in places such as Irkutsk, which is
dubbed the mining capital of Russia and offers some of the lowest electricity
tariffs in the country. The proposal to introduce tiered tariffs by increasing
energy costs for an amateur miner to limit consumption was backed by the
energy ministry, but it was eventually rejected by the local authorities, except Kemerovo.
In
early December, Deputy Energy Minister Pavel Snikkars said that the
industry may see a two-fold increase in its share of Russia’s total power
consumption in 2022. The Ministry of Energy and the Bank of Russia supported a bill to
regulate cryptocurrency mining, but lawmakers postponed the adoption
of the draft bill until 2023.
Do
you think the Russian government will initiate steps to ensure energy supplies
for cryptocurrency miners? Please post your comments.
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