Irkutsk has been experiencing problems with electricity supplies due to Russians using cryptocurrency mining in their own homes. The region has the lowest electricity prices in Russia and power outages have been a regular occurrence. Mining has been a major source of income in the region thanks to subsidised household energy.
With the rise of crypto mining at home in Irkutsk, electricity consumption spikes
The increasing number of power grid outages in Irkutsk has been a problem for the operators. Both the region and city have seen an increase in their electricity consumption, which overloads the distribution system. Officials claim that this is due to cryptocurrency miners, who mine digital currency in their basements and garages.
They are proposing measures to alleviate the situation. Kommersant, a Russian daily, reported that authorities want to increase the network’s capacity in Irkutsk Oblast and introduce more favorable tariffs to crypto miners. They also plan to establish platforms for hosting their activities.
According to the newspaper, several parts of Irkutsk were affected by either emergency or planned outages in December. According to the utility, residential pressure has increased sharply since June.
“Despite the warm weather in November, the load increased by almost 40% compared to last year. The significant loads on the power networks and the growing number of outages are associated with the activities of miners,” the Irkutsk Electric Grid Company (IESC) explained. The calculations of the Irkutsk Electric Grid Company (IESC) show that the consumption of the city has risen by 108% in 2021.
IESC highlighted that coin-mining uses a large amount of energy as it operates round the clock. Engineers warn that the existing electrical networks in towns and cities are not designed for the constant, “industrial” load that the mining hardware creates. In order to change fuses or install more powerful power lines, the company was forced to disconnect electricity from many locations.
Over 1,100 Cases of ‘Gray’ Crypto Mining Registered in 2021
Utility companies in the area have attempted to track down the miners responsible for this spike in demand. “In Irkutsk, 21 electrical installations suspected of cryptocurrency mining were identified… Mining equipment is installed on balconies, in residential premises and basements of apartment buildings,” Irkutskenergosbyt announced.
During the raids, inspectors have found more than 1,100 cases of the so-called “gray” mining in the Irkutsk Oblast in 2021. Recent reports revealed that Irkutskenergosbyt utility filed 85 lawsuits against individuals involved in home-crypto mining, with claims amounting to 73.3 million rubles (over 980,000). The utility has won nine cases in court and expects to be awarded 18.7 million rubles (or $250,000) as compensation.
The federal government of Moscow granted permission to Russian authorities in December to determine the local electricity rates. This measure will likely increase costs for amateur cryptomining. It is common to use sub-subsidized household electricity from Russia for digital currency minting at home.
Irkutsk is the Russian mining capital. It has one of the lowest electricity rates at 0.86 rubles ($0.01)/kWh, despite the fact that the average tariff for Russia is six-fold higher. There has been a steady rise in calls for officials from Moscow and Irkutsk, to make mining a legitimate business activity. They also want higher electricity rates for miner and to tax them. The State Duma has established a working group to discuss regulatory recommendations for this sector as well as other crypto-related issues.
What do you think Russia is likely to do? Leave your comments below.
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