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Russian power grid is reaching its limits due to crypto mining

 


Cryptocurrency mining is gaining popularity in Russia, but some regions of the country are struggling to keep up with this rapid development.


These include the Irkutsk Oblast, one of the most important economic regions in Russia, through which a large part of the trade routes with China run. As the Russian news portal TASS reports , electricity consumption in the region increased fourfold in 2021 compared to the previous year due to crypto mining alone.


Yevgeny Vechkanov, the technology director of the local energy supplier Irkutsk Electric Networks, sees the record run of Bitcoin and the Chinese mining ban as driving forces for the increased demand. "These two factors accelerated the situation, which ultimately led to a quadrupling compared to 2020," says the expert.


Vechkanov further explains that more and more private citizens have installed mining devices in their apartments and houses, which has meanwhile increased regional electricity consumption so disproportionately that there have been repeated power outages in the meantime.


Oleg Prichko, the director of the local electricity supplier Baikal Energy Company, also attributes the increased demand for electricity in the region to the boom in cryptocurrency mining and sounds the alarm that in the first two weeks of January alone, seven planes “loaded with mining equipment from China arrived".


Andrey Zhbanov from the Ministry of Internal Affairs confirms that crypto mining has become ubiquitous in Irkutsk and is already yielding funny results. As Zhbanov puts it: "This may sound funny, but some citizens set up mining devices in kennels because the things provide heat, which allows them to kill two birds with one stone."


The regulators in the oblast had already pointed out in October 2021 that electricity consumption from mining had suddenly increased after Chinese mining companies had to relocate thanks to their government. Russia's Ministry of Energy had therefore already announced that it would use new regulatory provisions to ensure that future electricity tariffs would differentiate between private use and use for crypto mining.


Meanwhile, major Russian electricity provider Irkutskenergosbyt has filed a lawsuit against 137 customers who mine cryptocurrencies in their homes using subsidized electricity. This is said to have caused damage to the company in the amount of the equivalent of 820,000 US dollars.


President Vladimir Putin recently boasted that excess electricity is a " competitive advantage " for Russia in the mining market. In November 2021, the Russian parliament also created a task force to deal with the development of laws for crypto mining.

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