Kazakhstan runs out of electricity due to influx of Chinese cryptocurrency miners

As China began cracking down on miners earlier this year and banned cryptocurrency trading, many companies are flowing into Kazakhstan, where electricity prices are relatively low. It is also said that power demand in Kazakhstan increased by 8% from the beginning of 2021, and in October, the balance of electricity supply and demand became unstable, leading to an emergency shutdown of three power plants.

According to reports, authorities in Kazakhstan have found that the problem of power shortages after the emergency shutdown was due to unregistered gray miners. Local power company KEGOC is resuming power allocation to 50 officially registered miners. However, it is said that transmission to these companies will be stopped first if supply and demand become unstable again.

Estimates suggest that at least 87,849 mining machines are being imported into Kazakhstan from China. Not long ago, a co-founder of a mining company (Xive.io) announced that they would move 2,500 mining equipment to a place where even a little bit of stable power could be obtained due to a power outage during operation in Taras, a city in southern Kazakhstan.

Because the South has a weaker electricity supply than the North, the company is said to be facing a similar crisis in other southern regions. Experts estimate that electricity consumption by unregistered Kazakhstan companies reaches 1,200 MW.

Kazakhstan has asked a Russian energy company to finance electricity as a response to the rapidly increasing demand, and from 2022 onwards, it will impose electricity compensation fees on registered miners. However, since none of the measures are effective immediately, mining companies are said to be forced to reduce their operating scale or to relocate them under poor power supply for the time being.

Of course, the gathering of miners is not limited to Kazakhstan. For example, in Iran, mining of cryptocurrencies was banned for four months from May because of a power outage caused by a gathering of irregular companies that were not officially authorized miners. Meanwhile, in Texas, the US also expressed the view that the demand for electricity exceeds 5,000 MW, as the miners are gathering because the electricity price is cheap. In Texas, there are already large-scale blackouts this year, raising concerns. Related information can be found here.