June 24, 2021

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Cryptocurrency mining using household electricity to face heavy fines

TEHRAN- Iranian Energy Ministry’s spokesman for the electricity sector said that those cryptocurrency miners, who use household electricity, will have to pay a heavy fine if identified.

In addition to paying the mentioned fines, those miners must also compensate for the damages they cause to the electricity network, Mostafa Rajabi Mashhadi added.

This year, electricity supply is facing two issues: reduction in the power generation of hydropower plants due to reduced rainfall and mining cryptocurrency using household electricity.

Unauthorized mining of cryptocurrencies creates problems in supplying electricity due to the damage to the local power grid and transformers, Mashhadi Rajabi noted, adding continued activity of these miners will definitely make the power supply more difficult and there is a possibility of blackouts due to the damage they cause.

Following the Iranian government’s approval of cryptocurrency mining as an industrial activity in 2019, numerous companies started mining cryptocurrency across the country thanks to the extremely low-cost electricity, and now Iranian power plants started to see this industry as an opportunity to increase their revenues.

In January 2020, the Ministry of Industry, Mining and Trade issued 1,000 plus licenses for cryptocurrency mining units.

With cryptocurrency mining taking a toll on Iran’s electricity industry, energy authorities voiced concerns about the enormous pressures exerted by such activities on the electrical grid, so some power plant companies proposed to offer their excess electricity exclusively to the cryptocurrency miners.

In order to reduce the pressure on the national grid, the government agreed to the proposal but said the power plants will not be able to benefit from the government subsidies on their fuel supplies.

In last July, Rajabi Mashhadi announced that Power plants were also allowed to mine cryptocurrencies.

He said that entities have to apply for the necessary licenses from the Industry Ministry and comply with the tariffs set for crypto mining.

Following the mentioned announcement, the head of Iran’s Thermal Power Plant Holding Company (TPPH) announced that his company is going to hold a tender for offering the electricity output of three power plants for cryptocurrency mining.

“The Necessary equipment has been installed in three power plants of Ramin, Neka, and Shahid Montazeri, and the auction documents will be uploaded on the SetadIran.ir website in the near future,” Mohsen Tarztalab said at the time.

Tarztalab noted that creating stable sources of income has become one of the main goals of Iran’s electricity industry in recent years, explaining: “Unfortunately, constant price hikes and the obligation for supplying electricity with stable prices to subscribers have caused a large gap between revenues and expenditures in the country’s electricity industry, and we need new sources of income to fill this gap.”

He pointed to the sale of electricity to cryptocurrency miners as one of the ways to earn money in the electricity sector and said: “According to the laws and regulations announced by the cabinet and the Energy Ministry, we have been allowed to allocate some capacity of our power plants for mining cryptocurrencies.”

According to Tarztalab, the TPPH is only going to use the power plants’ expansion turbines for the mentioned purpose because they do not consume liquid fuels like gas oil, and only natural gas, which is cleaner, is used as fuel in these turbines.

These turbines are not connected to the national grid and the electricity generated by them is only used by the power plant itself,” he added.

MA/MA

Original News : https://www.tehrantimes.com/news/460951/Cryptocurrency-mining-using-household-electricity-to-face-heavy

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