Authorities in Kazakhstan have calculated the energy used in the cryptocurrency industry, which competes for electricity with other sectors and households. The government has also estimated the additional supplies needed to meet the growing demand for mining farms and proposed to limit the performance of new facilities.
Kazakhstan measures energy use in the cryptocurrency mining industry and estimates the deficit
In an effort to explain why Kazakhstan is considering restrictions on new cryptocurrency operations, the Ministry of Energy told local media that digital coin data centers use 5 megawatts (MW) of electricity every hour. Only one mining facility burns an average of 3.6 million kilowatts (kW) per month, the ministry said, adding that this amount corresponds to the consumption of 24,000 households.
Due to China’s crackdown on cryptocurrency miners this year, the Central Asian nation has become an attractive destination for many mining companies due to low energy prices. As a result, electricity consumption in the first nine months of this year increased by 7.4% to almost 83 billion kilowatt hours (kWh), government figures show.
Officials in Nur-Sultan have accused about increasing consumption of about 50 mining farms operating in the country.
In addition, the use of energy by illegal mining farms is likely to increase. The Ministry of Energy told Business News LS that the excessive growth in consumption attributable to mining centers is around 1,050 MW and the share of illegal crypto miners is estimated at 250 to 450 MW.
The government wants to limit the capacity of new mining farms to 100 MW
Meeting the growing needs of the mining industry would require an increase in electricity production of at least 1,000 MW, which could happen in the next four to five years, the ministry said. In early October, Kazakh Energy Minister Magzum Mirzagaliev said the government intended to build 3,000 MW of combined heat and power plants over the same period.
To prevent the situation from deteriorating, the ministry recommends limiting the capacity to 100 megawatts for new consumers connecting to the electricity grid. The measures are expected to affect cryptocurrency farm construction projects in the country.
This is not the only bad news for cryptocurrency miners and potential investors. This month, legislators submitted a proposal to introduce registration of mining entities operating in the country. In the context of growing energy consumption in the sector, a group of MEPs also called for the adoption of higher electricity rates for companies involved in the extraction of digital currencies.