The Russian Federation has just decided that it will help the miners in Kazakhstan by providing them with additional energy. With this considerable support in electricity, the miners of this Central Asian country will be able to get their supplies directly from Inter RAO, a Russian company specializing in the distribution of electricity. This decision comes at a time when the country’s electrical installations are aging and require modernization.
Russia to supply more energy to crypto miners in Kazakhstan
Russia and Kazakhstan plan to modify a bilateral agreement on the coordinated operation of their energy systems. The purpose of this modification is to facilitate the purchase of additional energy by crypto companies installed in Kazakhstan. Kazakh miners will thus be able to obtain supplies from of Inter RAO, the Russian electrical distribution giant. They will therefore be able to run their energy-intensive machines without limits. The announcement was made on the RBC crypto news pagethe Russian business information portal.
With the new arrangements established, Inter RAO now has the green light to sell energy directly to mining companies in Kazakhstan, by virtue of the commercial contracts concluded beforehand. Many miners relocate their companies to Kazakhstan to take advantage of the low, subsidized electricity tariffs.
The country took advantage of China’s tough stance on crypto mining last year to become a virtual currency mining eldorado. Only, the flow of consumption is at the origin of the shortages. Similarly, the devices used in the country are aging and breakdowns are recurrent. All these difficulties have motivated the Kazakh government to temporarily close more than 100 mining operations.
Towards a lifting of the ceiling on electricity imports?
The desire of the Russian giant Inter RAO to supply Kazakhstan with additional energy does not date from today. Several months ago, the company planned to help Kazakh businesses. The objective being to fill the electricity deficit estimated at 600 megawatts at this time. It was a way to meet the high demand for energy from the miners. Because, from January to September 2021, electricity consumption exceeded 80 billion kilowatt hours (kWh).
Inter RAO was also critical of Kazakhstan’s energy policy. Indeed, the company castigated the capped tariffs enforced by the government. They contributed to the lack of funds to support the modernization and increase in production capacity from the country. However, despite agreements with Russia, some lawmakers in the country remain cautious. These denounce what they call “the uncontrolled use of electricity by the “grey miners”.
In sum, Nur-Sultan lawmakers want new regulations that would limit crypto mining only to legally registered miners. With this new law, foreign minors will only be able to collaborate with licensed data centers.
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