Siberia faces a unique challenge as cryptocurrency mining centres, consuming nearly 2 GW of power, strain its energy infrastructure. The Ministry of Energy's response is a tariff hike for these crypto farms, a move aimed at mitigating local power shortages and encouraging relocation. This decision follows a threefold increase in <a href="https://ultramining.com/news/en/russia-s-energy-ministry-charges-forward-to-legalize-crypto-mining/" rel="noopener noreferrer nofollow">Russia</a>'s industrial cryptocurrency mining in the past three years, accelerated by <a href="https://ultramining.com/news/en/immersion-cooling-transforms-chinas-crypto-mining-landscape/" rel="noopener noreferrer nofollow">China</a>'s mining ban and <a href="https://ultramining.com/news/en/global-bitcoin-mining-activity-soars-hashrate-hits-record-high/" rel="noopener noreferrer nofollow">Kazakhstan</a>'s restrictions, according to <a href="https://www.kommersant.ru/doc/6352708" rel="noopener noreferrer nofollow">kommersant</a>.
The influx of crypto farms, mainly in the Irkutsk Region, has "exhausted" Siberia's free power capacity, halting the connection of new industrial and social facilities to the energy grid. To counter this, the Ministry proposes significant increases in <a href="https://ultramining.com/news/en/crypto-mining-with-flare-gas-a-green-solution-or-environmental-setback/" rel="noopener noreferrer nofollow">electricity</a> transmission tariffs in energy-deficient areas. However, this approach could force crypto farms to migrate, potentially dismantling established IT infrastructures.
In the Irkutsk Region, crypto mining accounts for about 1.3 GW, with actual usage significantly lower. The region's appeal stems from its low <a href="https://ultramining.com/news/en/upcoming-bitcoin-halving-threatens-mining-profitability-analysts-warn/" rel="noopener noreferrer nofollow">electricity prices</a>, making it a hotspot for miners. The Ministry hasn't specified the tariff increase but aims to make it financially viable for miners to leave during the construction of new generation facilities.
Yet, relocating established data centres, especially those consuming over 50 MW, could lead to substantial investment losses. The average cost of constructing an industrial farm is approximately 10 million rubles per MW, not including grid connection expenses. Legal crypto mining operations also contribute to the economy by paying commercial <a href="https://ultramining.com/news/en/upcoming-bitcoin-halving-threatens-mining-profitability-analysts-warn/" rel="noopener noreferrer nofollow">electricity prices</a>, indirectly subsidizing tariffs for the population.
The surge in <a href="https://ultramining.com/news/en/irkutsk-region-busts-1-000-illegal-crypto-miners-in-a-year-fires-a-major-concern/" rel="noopener noreferrer nofollow">illegal mining</a>, particularly in the Irkutsk region, exacerbates the energy crisis. Legal miners warn that higher tariffs might drive more operations into the grey zone. A potential solution lies in differentiated tariffs for increased electricity consumption, a strategy yet to be widely adopted.
This situation presents a complex puzzle for the Siberian energy sector, balancing the need for development with the burgeoning demands of the crypto <a href="https://ultramining.com/news/en/texas-residents-challenge-bitcoin-mining-industrys-impact-on-power-grid-and-communities/" rel="noopener noreferrer nofollow">mining industry</a>.

Siberia’s Crypto Conundrum: Rising Tariffs and Relocation Dilemmas

Ultramining_Eng

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