Russia’s Ministry of Energy Proposes Controversial Tariffs on Cryptocurrency Miners

The Russian Ministry of Energy has suggested introducing discriminatory electricity tariffs specifically aimed at cryptocurrency miners. This announcement came during the “Russian Energy Week” forum, where Deputy Energy Minister Pavel Snikkars presented the plan. The ministry contends that the rapid expansion of mining activities has drained planned energy capacities for the next four years in certain regions, according to rbc.

Consequently, authorities had to limit energy supply to other consumers, including socially vital sectors. Snikkars pointed out that building additional energy infrastructure takes time. Therefore, discriminatory tariffs on miners seem to be an immediate response to the ballooning energy consumption.

However, industry leaders disagree. Igor Runets, CEO of BitRiver, argues that increased tariffs would only exacerbate the problem. He suggests that miners would shift to public sites, eventually leading to a discussion on mining bans. Runets highlights that “black mining,” which operates at residential rates, has already become so prevalent that it rivals industrial mining.

Timofey Semenov, CEO of Intelion Mine, offered a solution. He emphasizes that the root issue is grey mining. The first step, he believes, should be to distinguish between the impacts of grey and white mining on the energy system. Semenov cites that data centers consume about 60% of electricity, while only 40% is used by entities operating at residential tariffs.

BitRiver and Intelion Mine recently joined an association of industrial miners. This association aims to engage with authorities, establish industry standards, and develop legislation to foster trust in mining companies. In a scenario where energy consumption for crypto mining activities has surged, the debate over discriminatory tariffs adds another layer of complexity to the industry’s future in Russia.