Russia plans to build new power plants in Siberia to meet high energy demand from miners

Demand continues to rise in residential areas as well, after regional authorities dropped a proposal to introduce higher tariffs for Russians who mint digital coins at home.

Russian authorities are thinking about new energy infrastructure and production capacity in cryptocurrency mining regions.

Russian Energy Minister Nikolay Shulginov acknowledged the increased demand for electricity from crypto-currency miners in some Siberian regions where the industry has grown. Additional generating capacity may be needed to meet their needs, he said, as quoted by local media and crypto-currency news outlets.

Shulginov did not reveal any specific plans, but made it clear that Russian authorities in these regions are considering further developing the energy networks used by mining companies and building more power plants. The grids in the Republic of Khakassia and the Irkutsk Oblast are currently experiencing the highest loads, Bits.media reported.

“The Department of Energy’s position has always been based on the need to create working conditions for mining“, stressed the government official. He also noted that the population’s electricity consumption has also increased, sometimes causing damage to the distribution networks.

“As for industrial mining, it is also growing, mainly in areas where the tariff is low. In these regions, we see a significant growth in consumption, which we must take into account“, Shulginov commented in an interview with the television channel Russia-24 and said:

Most likely, it will not go without the construction of power plants in the southeastern part of the unified energy system of Siberia.

Energy-rich Irkutsk keeps electricity rates low for crypto-currency miners.

Crypto-currency mining has grown in Russia, a country with abundant low-cost energy resources and a cool climate, both as a profitable business activity and as an additional source of income for many ordinary Russians who mine in basements and garages. According to a study published in October, bitcoin mining revenue in Russia grew 18-fold in four years before markets and sanctions hit it this year.

Home mining has been blamed for power outages and blackouts in places like Germany, France, Italy and the UK. Irkutsk, dubbed the mining capital of Russia, has some of the lowest electricity rates in the country. A proposal to introduce differentiated tariffs, increasing the cost of energy for amateur miners to limit consumption, was supported by the Ministry of Energy but ultimately rejected by local authorities, with the exception of the Kemerovo region.

In early December, Deputy Energy Minister Pavel Snikkars said that industry could see its share of Russia’s total electricity consumption double by 2022. His ministry and the Bank of Russia supported a bill to regulate crypto-currency mining, but lawmakers delayed passage of the bill until 2023.