<p>Laos, a leading producer and exporter of hydroelectricity, has made the decision to suspend electricity supply to cryptocurrency mining operations within its borders.</p><h2 id="header-0">Tackling a perfect storm</h2><p>The<a href="https://edl.com.la/announce_Post.php?id&#61;64" rel="noopener noreferrer nofollow"> decision</a> comes as a result of a perfect storm of challenges, including a struggle to meet escalating power demands due to drought conditions, impending commitments to export electricity to Thailand, and the mounting debts of cryptocurrency mining companies.</p><p>In a calculated move in 2021, Laos initiated a public-private pilot program aimed at delving into cryptocurrency mining and trading. The context for this move was China’s sweeping crackdown on mining activities, compelling miners to scout for alternative jurisdictions for their operations.</p><p>In response, Laos granted authorization to a handful of entities, spanning construction conglomerates and a bank, to partake in the mining and trading of Bitcoin, Ethereum, and Litecoin. This led to a commitment to regulatory collaboration between government ministries, the Bank of Laos, and Electricité du Laos (EDL).</p><h2 id="header-1">Exploiting hydropower</h2><p>Laos’ abundant and affordable electricity has placed it on the short list of locations for crypto miners to settle in. With an abundance of rivers and waterfalls, hydropower stands as one of the nation’s primary energy sources, offering a renewable source of cost-effective electricity.</p><p>However, events in 2023 have disrupted that narrative. A persistent drought has hit the country during the first half of the year, which triggered an unprecedented surge in the demand for electricity from sources other than hydro.</p><p>The dependence on hydropower, constituting 95% of the nation’s energy generation, struggled to keep pace with the demand. As a direct consequence, EDL, a state-owned electricity distributor, announced the cessation of electricity supply to crypto mining operations.</p><p>The problem has compounded as Laos finds itself committed to exporting substantial quantities of electricity to the Electricity Generating Authority of Thailand (EGET), serving as a lifeline for Thailand’s power grid during the forthcoming dry season. This external commitment has, in turn, further strained the local capacity for electricity supply.</p><p>Another Asian country, Bhutan, has also gotten<a href="https://medium.com/&#64;coinness.gl/bhutan-partners-with-bitdeer-on-crypto-mining-fund-94c65e718c83" rel="noopener noreferrer nofollow"> involved</a> with crypto mining in an effort to exploit its hydropower resources, where 99% of electricity supply comes from hydropower within the kingdom.</p><h2 id="header-2">Unpaid bills</h2><p>Another dimension to the saga is the growing debt crisis faced by cryptocurrency mining operations. A representative of EDL cited the inability of these mining businesses to settle their accumulating electricity bills as a key factor in the decision for suspension. The Bank of Laos has further escalated matters by deciding to halt loans to cryptocurrency companies in January.</p><p>Laos has had bold objectives to transform itself into Southeast Asia’s premier exporter of clean electricity. The nation’s topography, featuring mountainous terrain covering 70% of the country, has immense potential for hydropower, with over 26,000 megawatts of installed capacity and ambitious plans to double this figure.</p><p>Hydroelectric dams like Nam Theun 2 have become conduits for substantial volumes of low-cost electricity, primarily directed towards neighboring Thailand and Vietnam. Meanwhile, projects like the Luang Prabang dam, boasting an installed capacity of 1,460 megawatts, underscore the country’s ambitions to develop hydropower further.</p><p>Revenues from power exports have become a vital component in Laos’ gross domestic product (GDP), contributing almost 15%, as per a report from October 2022.</p>

Laos Halts Crypto Miners’ Electricity Amid Drought and Debts

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