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Russia is preparing to provide Kazakhstan with additional energy needed to run crypto mining farms in the Central Asian nation. New arrangements will allow Kazakhstan’s miners to buy electricity directly from Russian power generation and distribution giant Inter RAO.
Crypto mining companies operating in Kazakhstan will be able to rely on electricity produced in neighboring Russia to power their energy-intensive hardware. To allow it, the two partner countries will amend a bilateral agreement governing the coordinated operation of their energy systems.
The government in Moscow has already ordered the necessary changes and begun preparations to organize the power supply to Kazakhstan’s cryptomining sector, revealed the crypto news page of the Russian business information portal RBC.
In accordance with the new arrangements, Inter RAO, which has a monopoly on the export and import of electricity in Russia, will be able to sell in Kazakhstan under contracts entered into on commercial terms directly with the mining companies working there.
With its low, subsidized electricity prices, Kazakhstan attracted a number of mining companies after the Chinese government cracked down on the industry last year. The subsequent increase in consumption was blamed for the power shortage and several breakdowns in the country’s aging energy infrastructure. In January, Kazakh authorities temporarily shut down around 200 mining facilities.
The state-owned Russian energy giant first began considering additional supplies to Kazakhstan last fall, when the country expected its electricity deficit to reach 600 megawatts amid rising demand in the cold winter months after consumption approached 83 billion kilowatt hours (kWh) in the first nine months of 2021 .
At the time, Inter RAO criticized Kazakhstan for its limited tariffs which the Russian holding said had led to a lack of funds for investment in the modernization and upgrading of the country’s production capacity and distribution network. Electricity imports were also previously restricted in Kazakhstan, unless the national grid operator KEGOC identified a risk of shortages.
Lawmakers in Nur-Sultan recently proposed a bill aimed at reducing what they describe as “uncontrolled use of electricity by ‘grey’ miners.” The new legislation seeks to reserve the ability to mint digital coins only for mining companies registered with the Astana International Financial Center (AIFC). If the law is passed, foreign entities will only be allowed to mine under contracts with domestically licensed data centers.
Do you think Kazakhstan will be able to solve its power deficit problems and ensure sufficient power supply for its crypto mining industry? Share your thoughts on the topic in the comments section below.
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