Kazakhstan is facing electricity shortages and cryptocurrency mining has been singled out as the main culprit. Amid an ongoing crackdown in China, the Central Asian nation has become a magnet for crypto miners who are taking advantage of its low electricity rates.
Republic of Kazakhstan Sees 7% Increase in Electricity Demand Due to Crypto Miners
Kazakhstan plans to boost its power generating capacities in the coming years but right now the country is experiencing electricity shortages. In 2021, consumption has surged by 7% in comparison with last year, a government official revealed at a press conference.
The spike in demand is largely due to a growing number of data centers devoted to cryptocurrency mining, Energy Minister Magzum Mirzagaliev told local media this week, referring to numbers released by the grid operator, KEGOC. Stressing that “this is a very big increase,” he stated:
We need to make a number of decisions. First, we must be able to ensure that system operators have the right to limit or reduce the consumption primarily of mining data centers at a time when there may be a shortage of electricity.
Mirzagaliev’s statement was quoted by Kazakhstan Today which remarked in its report that the activities of crypto miners now do not have a significant positive impact on the socio-economic indicators. Mining consumes the cheap electricity generated in Kazakhstan, competing with the growing needs of the rest of the economy and the population. The minted cryptocurrency is usually sold elsewhere and profits are accumulated abroad.
Nevertheless, the head of the Ministry of Energy insisted that Kazakhstan needs to develop its crypto mining sector and expressed confidence that the industry will evolve. Mirzagaliev pointed out there are “very good opportunities” for that, highlighting the country’s potential to expand the use of renewable energy.
In light of the current deficit, however, the department has prepared a number of proposals on how to deal with power shortages caused by miners. These include measures to limit the electricity consumption of existing mining data centers and suspend the connecting of new crypto farms to the grid.
At the same time, the government in Nur-Sultan will focus on increasing electricity production. Minister Mirzagaliev revealed that the country intends to build power plants with a combined 3,000-megawatt capacity in the next five years. While these electric stations will operate on natural gas, Kazakhstan will also launch new facilities relying on renewable energy sources. Their share in the country’s energy mix is expected to reach 6% by 2025 and at least 15% in 2030.
A study released by the University of Cambridge this year showed that the country has seen its share in the global extraction of bitcoin increase six times in less than two years. Kazakhstan now ranks third in the world by crypto mining volume. In July, the government decided to introduce a surcharge for the electricity used by miners, but that hasn’t stopped the influx of mining companies.
Do you expect Kazakhstan to successfully deal with its power supply deficit and continue to attract cryptocurrency miners? Tell us in the comments section below.
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Kazakhstan is going through electrical energy shortages and cryptocurrency mining has been singled out as the primary offender. Amid an ongoing crackdown in China, the Central Asian nation has grow to be a magnet for crypto miners who’re profiting from its low electrical energy charges.
Republic of Kazakhstan Sees 7% Enhance in Electrical energy Demand Because of Crypto Miners
Kazakhstan plans to spice up its energy producing capacities within the coming years however proper now the nation is experiencing electrical energy shortages. In 2021, consumption has surged by 7% compared with final 12 months, a authorities official revealed at a press convention.
The spike in demand is basically as a result of a rising variety of knowledge facilities dedicated to cryptocurrency mining, Vitality Minister Magzum Mirzagaliev advised native media this week, referring to numbers launched by the grid operator, KEGOC. Stressing that “it is a very large enhance,” he acknowledged:
We have to make numerous choices. First, we should be capable of make sure that system operators have the precise to restrict or scale back the consumption primarily of mining knowledge facilities at a time when there could also be a scarcity of electrical energy.
Mirzagaliev’s assertion was quoted by Kazakhstan Immediately which remarked in its report that the actions of crypto miners now do not need a big optimistic affect on the socio-economic indicators. Mining consumes a budget electrical energy generated in Kazakhstan, competing with the rising wants of the remainder of the economic system and the inhabitants. The minted cryptocurrency is often offered elsewhere and income are gathered overseas.
Nonetheless, the pinnacle of the Ministry of Vitality insisted that Kazakhstan must develop its crypto mining sector and expressed confidence that the business will evolve. Mirzagaliev pointed on the market are “superb alternatives” for that, highlighting the nation’s potential to develop the usage of renewable vitality.
In gentle of the present deficit, nevertheless, the division has ready numerous proposals on the best way to take care of energy shortages attributable to miners. These embody measures to restrict the electrical energy consumption of current mining knowledge facilities and droop the connecting of latest crypto farms to the grid.
On the similar time, the federal government in Nur-Sultan will concentrate on growing electrical energy manufacturing. Minister Mirzagaliev revealed that the nation intends to construct energy crops with a mixed 3,000-megawatt capability within the subsequent 5 years. Whereas these electrical stations will function on pure gasoline, Kazakhstan may also launch new services counting on renewable vitality sources. Their share within the nation’s vitality combine is predicted to achieve 6% by 2025 and at the least 15% in 2030.
A research launched by the College of Cambridge this 12 months confirmed that the nation has seen its share within the international extraction of bitcoin enhance six occasions in lower than two years. Kazakhstan now ranks third on the planet by crypto mining quantity. In July, the federal government determined to introduce a surcharge for the electrical energy utilized by miners, however that hasn’t stopped the inflow of mining corporations.
Do you anticipate Kazakhstan to efficiently take care of its energy provide deficit and proceed to draw cryptocurrency miners? Inform us within the feedback part under.
Picture Credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This text is for informational functions solely. It isn’t a direct provide or solicitation of a proposal to purchase or promote, or a advice or endorsement of any merchandise, providers, or corporations. Bitcoin.com doesn’t present funding, tax, authorized, or accounting recommendation. Neither the corporate nor the writer is accountable, instantly or not directly, for any harm or loss brought on or alleged to be attributable to or in reference to the usage of or reliance on any content material, items or providers talked about on this article.