Crypto Miners Blamed for Power Supply Deficit in Kazakhstan, Government Ponders Restrictions – Mining Bitcoin News

Kazakhstan is facing electricity shortages and cryptocurrency mining has been identified as the main culprit. Amid an ongoing crackdown in China, the Central Asian nation has become a magnet for crypto miners profiting from its low electricity prices.

The Republic of Kazakhstan records a 7% increase in electricity demand due to crypto miners

Kazakhstan plans to increase its electricity generation capacity in the coming years, but the country is currently suffering from electricity shortages. In 2021, consumption increased by 7% compared to the previous year, a government official announced at a press conference.

The increase in demand is primarily due to a growing number of Data Center Energy Minister Magzum Mirzagaliev is turning his attention to cryptocurrency mining, he told local media this week, referring to figures published by grid operator KEGOC. Stressing that “this is a very large increase,” he said:

We have to make a series of decisions. First, we must be able to ensure that system operators have the right to limit or reduce consumption, especially of mining data centers, in times of electricity shortages.

Mirzagaliev's statement was quoted by Kazakhstan Today, which noted in its report that the activities of crypto miners now do not have a significant positive impact on socio-economic indicators. Mining consumes the cheap electricity produced in Kazakhstan and competes with the growing needs of the rest of the economy and the population. The minted cryptocurrency is usually sold elsewhere and profits are accumulated abroad.

Despite this, the head of the Ministry of Energy insisted that Kazakhstan needs to develop its crypto mining sector and expressed confidence that the industry will continue to develop. Mirzagaliev pointed out that there are “very good opportunities” for this and highlighted the country’s potential, the use of renewable energy.

However, given the current deficit, the department has come up with a number of suggestions on how to deal with power shortages caused by miners. These include measures to limit the power consumption of existing mining data centers and suspend the connection of new crypto farms to the network.

At the same time, the government in Nur-Sultan will focus on increasing electricity production. Minister Mirzagaliev announced that the country plans to build power plants with a total capacity of 3,000 megawatts in the next five years. While these power plants will run on natural gas, Kazakhstan will also commission new plants based on renewable energy sources. Their share in the country's energy mix is ​​expected to reach 6% by 2025 and at least 15% by 2030.

A learn published by the University of Cambridge this year showed that the country has increased its share of global Bitcoin extraction sixfold in less than two years. Kazakhstan now ranks third in the world in crypto mining volume. In July the government decided to introduce one Surcharge for the electricity used by miners, but that didn't stop them influx from mining companies.

Do you expect Kazakhstan to successfully manage its electricity supply deficit and continue to attract cryptocurrency miners? Tell us in the comments section below.

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