Media: Crypto mining puts Abkhazia’s power grid on the brink of crisis

Due to energy-intensive mining of Bitcoin and other cryptocurrencies, Abkhazia has teetered on the brink of a crisis—the republic lacks electricity to meet the growing needs of its population and economy. Local media report this пишут local media.

According to calculations by the Abkhazian energy company’s operational-dispatch service, the total capacity of mining equipment operating in the republic is at least 40–45 megawatts.

“With round-the-clock operation, equipment of this capacity could consume about 400 million kWh in a year—the majority of Abkhazia’s projected electricity deficit. The projected deficit for the remaining months of 2020 could amount to 704 million kWh,” the company added.

In the near term, the Abkhaz government intends to regulate cryptocurrency mining, implying higher tariffs for miners and a ban on importing new equipment.

The customs service reports that in the first six months of 2020 Abkhazia legally imported into the country twice as many cryptocurrency mining devices as in all of 2019.

In December 2018, the Abkhaz authorities banned mining activity on the republic’s territory, but did not specify clear penalties for violators. As a result, most mining companies effectively do not pay for the electricity they consume.

In June 2019, the Ministry of Economy prepared a draft law regulating mining activities, requiring miners to register as a legal entity or individual entrepreneur and to obtain a license to engage in activities.

The bill also provides for temporary restrictions on using the power-system capacities of Abkhazia for cryptocurrency mining in crisis situations.

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