Irkutsk’s Balancing Act: Rising Crypto Farms and Energy Deficits

  • Sergey Maga
  • 24 November, 2023 15:13
Irkutsk’s Balancing Act: Rising Crypto Farms and Energy Deficits

Siberia‘s energy grid is under significant pressure due to the rapid growth of cryptocurrency mining centres, particularly in the Irkutsk Region. The Ministry of Energy’s response is a proposed steep increase in electricity tariffs for these centres, as Siberia grapples with a burgeoning local energy deficit. This move is part of a broader strategy to manage the impacts of crypto mining on the region’s power infrastructure, according to kommersant.

Industrial cryptocurrency mining in Russia has soared, nearly tripling in three years to reach 2 GW, accounting for 12% of global mining capacity. This surge has been particularly pronounced in Siberia, following restrictive mining measures in China and Kazakhstan starting in 2021. In the Irkutsk Region, the current consumption by mining data centres is estimated at 584 MW, with 335 MW concentrated in its southern part, accounting for 6% of the region’s maximum power consumption last year.

The Irkutsk Electric Grid Company (IESK) reports that the region’s total industrial mining capacity is around 1.3 GW, with 476 MW in the Irkutsk-Cheremkhovsky district. To address the power shortfall, there’s a need to construct power plants capable of producing 1.23 GW by 2029, an investment estimated at 430 billion rubles. 

The Irkutsk Region’s governor, Igor Kobzev, has called for legislative action to regulate mining, noting a 26% increase in legal crypto mining in July 2023 compared to the previous year. Authorities have appealed to the Russian government and various energy committees to develop regulatory mechanisms for mining activities and classify digital currency mining as a distinct economic sector.

The challenge for Siberia, and specifically the Irkutsk Region, lies in balancing the burgeoning demand for energy from the crypto mining industry with the existing infrastructure’s capacity, all while ensuring sustainable development and equitable access to energy resources.

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