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The Russian Energy Ministry is seeking authority to disconnect cryptocurrency miners from energy grids amid a significant increase in Bitcoin mining capacity across the country. This development follows reports indicating that Russian miners generated approximately $3.5 billion worth of Bitcoin (BTC) last year.
Energy Ministry’s Position on Crypto Mining
According to a report from Vedomosti, Yevgeny Grabchak, the Deputy Minister of Energy, emphasized that power providers should have the ability to “disconnect” miners “from the power supply” at any moment. Grabchak reiterated earlier statements from the Energy Ministry about the potential for energy suppliers to offer surplus power to miners.
“Miners are a new category of consumers. We are discussing them quite actively now,” Grabchak remarked. He highlighted that during periods when electricity consumption peaks are absent, there is often free capacity on energy grids that could be utilized by miners.
Government’s Recommendations for Miners
During a recent meeting with President Vladimir Putin, Energy Minister Sergey Tsivilev advised that crypto miners should be ready to relocate to regions of Russia where energy supply constraints do not exist. This statement underscores the government’s proactive approach in managing energy resources while accommodating the growing cryptocurrency sector.
Automatic Power Management Solutions
Grabchak proposed that the crypto industry has the option to self-regulate its power consumption or to implement “automatic” IT systems that would manage connectivity to the energy grids. He explained the potential for miners to receive excess capacity during times of adequate supply, provided they agree to limit their overall energy consumption. Alternatively, miners could install automated solutions that would allow for disconnection from the grid when necessary.
Regulatory Balancing Act
Earlier this year, President Putin endorsed the industrial crypto mining sector, which underwent legalization. However, the government’s approach includes measures to prevent miners from overwhelming the power grid, a challenge previously encountered in regions like Abkhazia and Kazakhstan.
Putin expressed concerns over “uncontrolled growth in electricity consumption for cryptocurrency mining,” noting that this trend has led to power shortages in certain areas, including Irkutsk Oblast, Buryatia, and the Transbaikal Territory. These locations have become well-known hubs for Bitcoin mining, particularly Irkutsk, which has faced significant power-related challenges and increased scrutiny of illegal mining operations.
Current Mining Landscape in Russia
Experts estimate that approximately one-third of Russian crypto miners operate in or near Irkutsk, consuming an estimated 1,000 megawatts of power, with home-based setups accounting for about 130 megawatts of this demand. This highlights the scale at which crypto mining has proliferated in these regions, prompting calls for adjustment and oversight.
Emerging Mining Developments
In response to regulatory pressures and energy considerations, many miners are beginning to explore relocation options beyond the traditional hotspots of Southern Russia and Siberia. For instance, developers in Perm have recently completed a 440-square-meter mining facility on a 1.4-hectare plot, boasting a capacity of 3 megawatts, equipped with cooling systems and modern infrastructure.
Moreover, Gazprom, the state-owned oil giant, has established a subsidiary dedicated to cryptocurrency mining, reportedly working on a new mining farm with 500 rigs located in Veliky Novgorod.
Future Plans for Crypto Mining Infrastructure
In the northeast region of Russia, regional governor Vladimir Uyba announced intentions to construct 15 new crypto mining data centers. This initiative will involve partnerships with private-sector miners and contractors, with the first two centers slated to be built in the localities of Mikun and Sindor.
These emerging trends indicate the Russian government’s dual approach to nurturing the cryptocurrency mining industry while ensuring energy supply remains stable across the country.
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