Post by account_disabled on Mar 9, 2024 4:15:45 GMT -5
Illegal mining and the massive installation of mining farms after their ban in China overload the energy grid.
The poor electricity system in one of Asia's most energy-rich countries has suffered repeated power outages in Kazakhstan and the government is turning to Russia to meet growing demand for electricity.
According to statements last week by Deputy Energy Minister Murat Zhurebekov, the increase in demand is caused by both an 8% increase in domestic electricity consumption in 2021 and unregistered cryptocurrency miners, most of whom migrated in recent months from China.
According to official figures, there are currently 50 cryptocurrency mining companies registered, so the existence of a high number of clandestine miners is suspected.
In this sense, the government of Kazakhstan has changed its approach towards crypto mining, initially favorable to it and favoring its position as the second largest producer of Ecuador Mobile Number List Bitcoin. Now, they argue that the exponential growth of mining has substantially boosted the demand for electricity, which is generated mainly by coal and gas, which is not tolerable.
On the other hand, various energy experts point out that the problem is due to a deficient energy system that was not prepared for the increase in demand.
The regions of Kazakhstan with the highest demand for electricity, in fact, are the northern industrial areas, such as Pavlodar and Karaganda.
This November, two of the main production plants were affected by bad weather and the drop in production exceeded the estimated consumption related to crypto mining, which does not exceed 1 GW, according to KEGOC, the country's main electricity company. Snowfall and frost routinely affect power generation and supply lines during winter in Kazakhstan.
About 70% of Kazakhstan's electricity is produced by coal plants. This proportion has decreased from around 81% in 2013, but still indicates a structural dependence on this fossil fuel, of which the country is beginning to have a shortage.
As coal prices have risen, Kazakhstan has had little incentive to reduce exports to better meet domestic demand. Likewise, the coal that Kazakhstan exports is of the highest quality, while internally the country's plants use low quality coal. Thus, the increase in demand has meant that even the least efficient coal has become scarce, already reaching $42 per ton as winter approaches.
As a result of the situation, the government will apply stricter regulation for cryptocurrency miners, according to authorities to avoid having to buy more electricity from Russia.