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Siberian Region Experiences Surge in Power Consumption Fourfold Due to Crypto Mining

Irkutsk faces a vast surge in power consumption fourfold thanks to illegal mining.

crypto-mining
Photo by GrafVision

Russia’s Irkutsk region experienced a significant surge in electricity consumption fourfold in 2021 thanks to the illegal mining going on, as the government is still in the midst of processing new crypto regulations. This report comes from Russian news agency Tass and was reported on a Wednesday.

Miners from Russia shrugged off the news, remarking that it’d only affect the illegal miners and mining operations. Of course, the demand has seen an increase which has subsequently led to power outages, per the report by Tass. This hike in the Bitcoin price last year combined with the crackdown in China over crypto made miners flock to Irkutsk, Evgeny Vechkanov said the director of the Irkutsk Electric Grid Co. in a statement to Tass.

The 1st half of January saw seven Boeing-737s loaded with mining rigs from China arriving in Irkutsk, said the CEO of Baikal Energy Co., Oleg Prichko.

Irkutsk’s “probably the biggest region with illegal mining. Some (miners) use residential tariffs, close to $0.01, so the government is chasing them,” said Denis Rusinovich, who serves as the co-founder of CMG Cryptocurrency Mining Group and Maverick Group, in conversation with CoinDesk. He also stated that an investigation began in November.

Data center businesses, including even legal mines, have got to pay 3 times the residential price to get power, said Sergey Arestov to CoinDesk. Arestov is the co-founder of BitCluster. If you are engaged in industry, you must pay for electricity accordingly, he added.

Residents are seemingly also installing mining rigs into dog kennels, says Andrew Zhbanov, the head of the criminal investigation department in the ministry of internal affairs, to Tass.

As Irkutsk wrestles with the illicit mining situation, various agencies at the federal level discuss crypto regulation.

Just last month the Russian Bank proposed a ban on crypto mining, the ministry of finance opposed just a mere 5 days later. Vladimir Putin, the President, then called for a consensus, which gave off a signal of crypto mining support.

Zhbanov stated that the mining ban is a necessity, though Veechkanov is more to the opinion that it should be recognized by lawmakers as more of an entrepreneurial activity, reported Tass. Vechkanov also said that Industrial scale miners need to be separated from parts of the grid that supply electricity to the population.

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