Countries in Eastern Europe are Designing Special Electricity Prices for Cryptocurrency Miners

Oct 14, 2021 at 12:09 // News

Miners go underground

Mining cryptocurrencies consumes a lot of energy. For this reason, some governments set special prices for miners. This trend seems to be particularly strong in the Eastern European region.


The Belarusian Ministry of Energy has already
introduced a separate fee system for companies engaged in mining. Although the country is known for its friendly attitude towards the cryptocurrency industry. President Alexander Lukashenko legalized mining back in 2017 and built a mining data center based on the Belarus nuclear power plant.


Nevertheless, the energy consumption of mining facilities has raised concerns among government officials, prompting them to increase electricity prices for these companies. From now on, they will be divided into four groups, depending on their consumption. The more energy consumed, the higher the price will be. Prices for citizens, on the other hand, will remain unchanged.


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Miners must pay more


Belarus is not the only country worried about electricity fees for miners. As CoinIdol, a world blockchain news outlet, reports, the Cabinet of Ministers of Kyrgyzstan has approved new electricity tariffs for 2021-2025, where miners will have to pay higher prices for energy consumed.


Russia is also considering the possibility of excluding cryptocurrency mining pools from the general fee regime for citizens. The Energy Ministry is concerned about the high consumption of such companies. For example, in the Irkutsk region, where electricity prices are the lowest, consumption is 159% higher than last year. The region’s governor, Igor Kobzev, blames this on mining companies attracted by cheap energy.


Although Russia does not suffer from energy shortages, such high consumption is not in line with the government’s development plan for 2022-2026, which is why Kobzev proposed to differentiate prices depending on consumption. The scheme is quite typical – the higher the consumption, the higher the price. Another proposal concerned the legalization and taxation of miners.


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Going deeper into the shadows


This is another typical problem for the countries of Eastern Europe (especially the former USSR) – mining companies tend to use municipal electricity without paying for it properly. Law enforcers need to keep a watchful eye on the industry to track and bring down illegal miners. But their numbers are steadily increasing.


In 2021, Ukrainian police and the Security Service (SBU) busted numerous mining farms across the country. One of the largest was located in Vinnytsia, on the premises of the state-owned power utility Oblenerho. So the operators were using the electricity completely free of charge.


Russia also hunts down mine operators who use municipal power without paying for it properly. The latest case was discovered in Saratov on September 30. It was operated by an official of the transport police and was located directly in the police department. However, as consumption remains high, it seems that illegal mining operators are still out there.


On the other hand, pressuring the mining industry with high prices would only push them deeper into the shadows. Already they use various means like magnets to disguise their actual consumption. An alternative might be to get them to switch to green energy (as many other countries are doing). This would allow them to optimize their energy consumption and make it more environmentally friendly.

Source: https://coinidol.com/special-electricity-prices/


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