Kazakhstani Cryptocurrency Miners to Receive Power from Russia
October 2, 2022 6:40 AM
Kazakhstan's crypto mining farms will be able to run with the help of additional energy that Russia is planning to supply to the Central Asian country. Miners in Kazakhstan will now be able to purchase electricity directly from the Russian power generation and distribution behemoth Inter RAO, thanks to recently implemented new arrangements.
Companies in Kazakhstan that mine cryptocurrencies will be able to use cheap electricity generated in Russia to fuel their operations. An existing bilateral agreement between the two countries will be updated to permit such coordinated operation of their respective energy systems.
According to the cryptocurrency news page of the Russian business information portal RBC, the Russian government has already issued the necessary orders and begun preparations to organize the supply of power for Kazakhstan's cryptocurrency mining sector.
Under the new terms, Russian electricity export and import monopoly Inter RAO will be able to negotiate and sign commercial contracts directly with Kazakhstani mining companies to sell electricity in that country.
When China began cracking down on the mining industry last year, Kazakhstan's cheap, subsidized electricity rates became a magnet for many of those businesses. Power shortages and multiple breakdowns in the country's aging energy infrastructure were blamed on the subsequent increase in consumption. The government of Kazakhstan temporarily shut down around 200 mines in January.
With consumption nearing 83 billion kilowatt-hours (kWh) in the first nine months of 2021, Kazakhstan anticipated its electricity deficit to reach 600 megawatts this winter, prompting the state-owned Russian energy giant to consider providing additional supplies to the country last fall.
Inter RAO, a Russian holding company, had previously voiced its displeasure with Kazakhstan's capped tariffs, saying they prevented the country from investing in necessary infrastructure upgrades to expand its power generation and distribution. Prior to this, imports of electricity were limited in Kazakhstan unless the national grid operator KEGOC foresaw a shortage.
In an effort to curb the "uncontrolled use of electricity by 'gray' miners," lawmakers in Nur-Sultan have introduced new legislation. This new law is intended to ensure that only mining firms listed with the Astana International Financial Center will be able to produce digital coins (AIFC). The law, if passed, would restrict foreign miners to working through domestically licensed data centers.