Russian miners oppose “take-or-pay” energy model

Russian mining company Algorithm has urged the Ministry of Energy to reject the “take-or-pay” electricity pricing model for crypto mining. The proposal is under discussion in 2026 and could take effect in 2027. The change may significantly impact mining economics in Russia.

Algorithm sent a proposal to the Ministry of Energy

Algorithm sent a formal letter to the Ministry of Energy on March 18, 2026. The company criticized a proposed pricing model for electricity consumption.

The draft regulation targets consumers with capacity above 670 kW.

Under the proposal:

• users would pay for 90% of contracted capacity;
• billing would not depend on actual consumption.

For example, a 100 MW contract would be billed as 90 MW monthly.

Algorithm argues that this model is unsuitable for mining operations. The company has not yet received a response from the ministry.

The model does not reflect mining consumption patterns

The proposal follows an initiative by Deputy Prime Minister Alexander Novak. The goal is to reduce strain on the power grid and control tariff growth.

Authorities view mining as a variable load. Therefore, they aim to ensure stable revenue for energy providers.

However, Algorithm argues that:

• mining demand is flexible, not constant;
• actual consumption is lower than contracted capacity;
• electricity tariffs in Russia are rising faster than global benchmarks.

The company also suggests that miners can act as “load-balancing consumers,” increasing usage during low-demand periods.

Miners may relocate to other regions

If implemented, the “take-or-pay” model could raise operating costs for miners. This would affect large-scale facilities the most.

Potential outcomes include:

• higher production costs for Bitcoin mining;
• reduced profitability;
• relocation of mining operations to other regions.

The policy may also slow new infrastructure development in Russia.

Regulation of the sector is increasing

Algorithm предложила alternative regulatory measures:

• classify miners as balancing consumers;
• allow direct connection to power generation;
• replace mechanical shutdown systems with software controls.

The company argues that regulation must reflect the specifics of mining.

The situation highlights a broader trend. Governments are tightening control over energy-intensive industries.

At the same time, mining is becoming part of national energy strategy. Future growth will depend on balancing regulation and infrastructure development.

Read also: Russia may introduce “take-or-pay” rule for mining