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Power grid operators and the residents of Irkutsk, Russia, have been experiencing more and more power outages due to a significant increase in power consumption within the region, causing an overload within the distribution network. According to local officials, this high consumption is caused by cryptocurrency miners who mint crypto assets in their homes, garages, apartments, etc.

To try and remedy this alarming issue, local officials are proposing a set of measures and regulations. For one thing, the authorities want to increase the distribution network’s capacity. Not only that, they want to present higher tariffs for cryptocurrency miners and give them specific platforms where they can keep doing what they do without affecting everyone else.

According to the Russian business daily Kommersant, Irkutsk saw planned and unplanned power outages throughout December 2021. Not only that, but the local utility noticed a sharp and sudden spike in the pressure on the grid situated in residential areas since June.

Irkutsk Electric Grid Company (IESC) explained to the newspaper company that even though November brought in warm weather, the electric load continued to increase by 40%. Based on that information, it’s safe to say that Irkutsk’s overall consumption for the entire year of 2021 increased by 108%.

The IESC notes that crypto mining and minting require massive energy, primarily since the miners’ computers and equipment will be operating practically 24/7. According to engineers, the existing electrical networks in cities and towns aren’t powerful enough to provide the energy needed by mining hardware. Sure enough, IESC had been forced to cut the power for various areas in Irkutsk to install better power lines and replace broken fuses.

two linemen on cherry pickersOver 1,100 Cases of ‘Gray’ Crypto Mining Discovered

Irkutsk utility companies have been trying to locate the mining facilities in the region responsible for the surge. In the Irkutsk region alone, about 21 electrical installations were discovered, and they’re suspected of being used in crypto mining.

Raids were performed to get to the bottom of the issue, and inspectors found over 1,100 cases of ‘gray’ mining in the region for 2021 alone. According to a recent report, it appears that the utility company Irkutskenergosbyt filed 85 lawsuits against those residents who have been crypto-mining in their homes, with claims reaching 73.3 million rubles (or more than $980,000).

For now, the utility company has already won nine cases out of the 85, and it’s expecting to receive compensation worth 18.7 million rubles ($250,000) for those won cases.

In December, Moscow’s federal government allowed authorities from Russian areas to determine local electricity rates independently. This move will supposedly increase the costs of amateur cryptocurrency mining.

Irkutsk is known as the mining capital of Russia, yet it has one of the lowest rates in the country at only 0.86 rubles ($0.01) per kWh. However, more and more people have expressed their frustration to Moscow officials, demanding them consider crypto mining as a business activity, especially in regions like Irkutsk.

That way, miners will have much higher electricity rates than the other regular folks, not to mention that they will be taxed.

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