The electricity of all legal cryptocurrency mining units will be cut off from the start of the next Iranian calendar month Tir (Wednesday, June 22) for the rest of the restriction, Mostafa Rajabi Mashhadi, the Spokesperson of the Iranian Energy Ministry for the electricity sector declared.

At present, there are 118 government-approved cryptocurrency mining units in the country, which must remove their electricity supply from the national grid from the very outset of the following month, the spokesperson emphasized.

Last week, the country's power utilization recorded a record of 62,500 megawatts (MW) during peak consumption, which is a huge figure, he said, adding that as per forecasts, the consumption necessity this [Iranian calendar] week (ends on Friday) will surpass 63,000 MW, which implies a restricted supply of electricity.

Because of international sanctions, misses the mark on the investment required in power generation capacity and natural gas production to keep up with consumption. Following the Iranian government’s approval of cryptocurrency mining as industrial activity in 2019, numerous companies started mining cryptocurrency across the country thanks to the very low-cost electricity, and now Iranian power plants began to consider this industry to be a chance to expand their incomes.

In January 2020, the Ministry of Industry, Mining and Trade gave over 1,000 licenses for crypto mining units.

Notwithstanding the approved units, a few unauthorized miners have also begun involving household electricity for cryptocurrency mining and this has made significant issues for the country’s electricity industry which is already facing serious problems created by reduced rainfall & drought.

Joyashree Dey

CBW - External Analyst

INDIA