The Irkutsk Oblast Region Of Russia Battles To Keep Up With Energy Demands For Bitcoin

According to reports from Irkutsk Oblast, a local energy distributor is embarking on recovering approximately $800,000 from illegal crypto miners.

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With Russia experiencing increased growth in mining activities, one of its regions is battling to sustain power amid a huge influx of new crypto miners. The region known as Irkutsk Oblast which is Russia’s primary trade route center from China saw an increase in energy consumption fourfold in 2021 alone. This increase in energy consumption is reported to be linked with increased crypto mining activity in the area according to TASS, a local news agency.

The head of development and technology at Irkutsk Electric Networks, a local energy form in the area, Yevgeny Vechkanov also confirmed the reports. He stated that increased crypto mining activities in the area are a result of China’s blanket ban on crypto mining activities. Ultimately, this situation worsened the energy situation at Irkutsk, prompting energy use to increase by fourfolds compared to 2020./

He also added that citizens within the region have also been setting up crypto farms in their homes. And this right now continues to cause regular grid outages and increases the consumption of energy.

Baikal Energy Company’s director, Oleg Prichko, also linked the increased power consumption to heightened crypto mining activities in the area. According to him, the first two weeks of January saw about seven Boeing 737 aircrafts loaded with mining equipment drive in Irkutsk.

Andrew Zhbanov, the head of Criminal Investigation at the Internal Affairs Ministry Andrey also made mentioned that several residents of Irkutsk residents even establish mining farms in dog cribs.  While this is funny, it is very true. Crypto mining gives off a lot of heat which helps keep the dog(s) warm while owners make money.

This sudden increase in energy consumption was first recorded in Irkutsk around October 2021, the same time China took a strong stance against crypto. This ultimately lead to the massive movement of crypto miners from China and some decided to settle at Irkutsk. To this end, the Ministry of Russian Energy declared that it will be developing new structures to distinguish between energy use for crypto mining and general usage.

However, one of the leading power distributors within the Irkutsk region, Irkutskenergosbyt is said to have filed over 130 lawsuits against its customers. The lawsuit is said to be against customers utilizing subsidized electricity to mine various digital assets using powerful ming equipment in their garages and basements. According to reports, the company is looking to be paid a pint 60 million Russian rubles in damages which is about $820,000

The power distribution company argued that home miners are technically engaging in entrepreneurial activities on a residential electricity tariff rate. The company went on to say that these activities are fraudulent as these residents avoid commercial electricity rates which are more expensive. The company also affirms that these crypto mining sites have increased electricity load in the region causing outages and break down at the expense of the company.

The company presented data to show that crypto mining activities greatly increase the amount of electricity consumed in the area. The data indicated in 2020, the residents of Irkutskenergosbyt used a total of 7 billion kilowatt-hours (kWh), and 8 billion kilowatt-hours (kWh) the following year (2021). However, while energy consumption seems to increase, the number of apartment buildings and private households remains almost unchanged.

This announcement came right after Vladimir Putin, the President of Russia affirmed that the country has enough electricity for crypto miners. He went on to say that this surplus electricity offers crypto miners an adequate competitive advantage against competitors in other countries. The Russian State Duma in Novembemodeledear established an innovative group to develop and work on legislation modeled particularly for the cringing sector.

At the moment, situations around crypto mining activities remain unclear. Hopefully, the State Duma will be able to adequately develop a legislative model that will answer and give solutions to regulatory questions. In the previous week, the Central Bank of Russia submitted a proposal for a total ban of crypto-related activities in the country. However, reports have it that support for the proposal from other government institutions is weak.

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