Crypto Miner Tariffs Proposed by Russian Minister of Energy Following Chinese Migration

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In Brief
  • Officials in Russia announced that they are considering adding tariffs on electricity to cryptocurrency miners.

  • In some areas, the power usage has increased by more than 150% since last year and many blame 'dark' miners for this explosion.

  • Russia is becoming a popular desination for Chinese miners who have been displaced by recent bans.

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Due to the recent bans on crypto mining in China, many have picked up shop and moved to Russia and other neighboring countries. This has caused significant power issues in those regions. 

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Russia is the latest country to take notice of increased crypto mining issues and wants to do something about it. The Minister of Energy Nikolai Shulginov, recently said he wants to stop cryptocurrency miners from having access to electricity at the same price as other consumers

Speaking with reporters at the recent Russian Energy Week, Shulginov said that “to maintain the reliability and quality of power supply, we consider it necessary to exclude the possibility of electricity consumption by miners at tariffs for the population.” The Ministry believes that “there should be no situation” where those who mine cryptocurrency pay the same for their electricity as the rest of the population. The Irkutsk governor added that underground “black” miners are putting a strain on the power grid and the issue is growing. 

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Shulginov added that “it is impossible for miners to use the situation and worsen the situation at the expense of reduced tariffs for the population.”

If the proposal of different tariffs is rejected, the Minister says that the volume of cross-subsidization would have to increase, which would be “unacceptable” by his estimation. 

Russian power grid strained by crypto miners

In a related statement, Governor of the Irkutsk Region Igor Kobzev, pleaded with the Deputy Prime Minister of the Fuel and Energy Complex, Alex Novak, in reference to underground illegal crypto miners. The governor said that he was concerned about the strain these activities are putting on the power grind and the growing risk of accidents at power plants.

The Irkutsk Oblast region currently has the lowest fees for electricity in the country, making it an attractive destination for Chinese miners. According to Kobzev, this has caused the energy consumption in the region to jump by 159% when compared with numbers from 2020. 

Governor Kobzev, on his Instagram page, added that the illegal miners “shamelessly take advantage of the fact that our region has low electricity tariffs. They make money out of it.”

The governor also points out instances where the entire power grid was compromised because of the underground mines. One such incident took place in Markov where residents were left without electricity in the dead of winter for an extended period. Something like this, Kobzev says, could “lead to a state of emergency.” 

Kobzev concludes by saying that “One suggestion — to legislate “mining” as the type of business activity. In this case, the miners simply can not consume energy tariffs for the population.”

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Matthew De Saro is a journalist and media personality specializing in sports, gambling, and statistics. Before joining BeInCrypto, his work was featured on Fansided, Forbes, and OutKick. With a background in statistical analysis and a love of writing, he takes an outside-the-box approach to reporting news.

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