Russian Ministry’s Tariff Hike Proposal Sparks Outcry from Cryptocurrency Miners

In a recent turn of events, the Russian Ministry of Energy proposed an increase in electricity tariffs for industrial mining farms. This initiative aims to compel cryptocurrency mining centers to relocate to areas with excess energy capacity, particularly targeting miners in energy-deficient regions. Industry insiders voiced their concerns to RBC Crypto, foreseeing adverse repercussions in the sector.

Oleg Ogienko, an executive at BitRiver, criticizes the initiative as an “unjustified tightening of screws”. According to him, cryptocurrency mining actually aids remote regions like the Irkutsk Oblast in attracting investments and curbing population decline. Moreover, he warns that the proposal may only affect law-abiding market participants, leaving violators unscathed.

Furthermore, Sergey Arestov from BitCluster views the potential price surge as an “unaffordable tariff”. He speculates that a threefold increase in the Irkutsk VN tariff could escalate prices to more than 10 rubles or $0.1 per kWh. Consequently, this could lead to a significant industry setback, possibly driving miners abroad.

Maxim Simutkin of Intelion Data Systems calls for a “careful analysis of all factors” before making any decisions. He emphasizes the importance of considering various factors including low electricity costs and surplus generating capacity in the region when selecting data center locations. Simutkin hopes the initiative sparks broader discussions and addresses the problem of data center accumulation in select locations, thereby facilitating connections for other essential facilities.

Legally, mining as a business activity remains undefined, making the classification of certain electricity consumers as “miners” or “mining equipment hosts” challenging, adds Simutkin. He highlights that the initiative, forecasting a deficit of over 1,225 MW in Southeast Siberia and about 1,400 MW in the Far East, pertains only to electricity transmission services, influencing less than 20% of the average expected price for a consumer in the Irkutsk region.

As the industry braces for potential changes, stakeholders and experts remain on high alert, anticipating the unfolding developments in the Russian cryptocurrency mining landscape.

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