Ministry of Energy Plans Significant Electricity Rate Increase for Crypto Farms

Several sources in the energy sector have told Kommersant that the Russian Ministry of Energy is proposing to increase electricity transmission rates for legal entities engaged in cryptocurrency mining by two to five times. These rate hikes may be implemented in regions where there is a shortage of power generation, risks of power supply disruptions, and difficulties connecting new consumers. The proposed increase is linked to electricity shortages in areas such as Buryatia, Zabaykalsky Krai, and Irkutsk Oblast. Due to the low cost of electricity in these regions, a large portion of crypto farms are located there. The goal of raising rates is to encourage miners to relocate to other regions.

Previously, Minister of Energy Nikolay Shulginov suggested restricting the right of non-discriminatory access to power grids for miners due to the risk of shortages in certain regions. He stated, “We don’t just want to, but strongly propose to either exclude miners from non-discriminatory access altogether, or at least temporarily. This way, we can first connect industrial, social facilities, and utilities, and only then consider mining operations.”

Currently, cryptocurrency mining is not regulated by law, so energy providers are required to connect any consumers without favoring any category. However, if miners gain access to power grids before others, it could lead to problems with resource allocation. Shulginov explained, “Right now, in Southeast Siberia, it’s not always possible to connect new consumers, even though we have non-discriminatory access to power supply. Anyone who requests it must be connected. Miners were the first to arrive, they build quickly. After them, a utility facility might come, but there’s no available capacity left, so it can’t be connected.” He was referring to mining across all of Russia, not just in energy-deficient regions.

Below, you can see a map showing the cost of mining 1 BTC in different countries, based on local electricity rates.