Russia’s Energy Ministry is seeking to introduce special electricity tariffs for cryptocurrency miners following the industry’s migration to the country from neighboring China.
Russian Energy Minister Nikolai Shulginov announced on Wednesday that the authority is working on a new framework to differentiate tariffs between general use and mining of cryptocurrency, local RBC news agency reported. October 13.
Shulginov said cryptocurrency miners in Russia should not consume electricity at residential tariffs, saying:
“We cannot let miners capitalize on the situation at the expense of low residential electricity rates […] In order to maintain the reliability and quality of the power supply, we believe that it is necessary to prohibit minors from consuming electricity at residential tariffs.
Some regions of Russia have reportedly faced explosive growth in energy use, allegedly due to the exit of Chinese miners from the country as part of a nationwide crackdown on crypto.
The Russian region of Irkutsk, located about 1,700 kilometers from China, has reportedly seen its energy consumption rates exceed by almost 160% those of last year. Irkutsk Governor Igor Kobzev pointed to “avalanche-like growth” in energy consumption in the jurisdiction, accusing illegal crypto mining activity made worse by the exodus of miners from China.
One of the largest regions in Siberia, the Irkutsk region is rich in energy resources, home to several large hydropower plants in cities such as Irkutsk, Ust-Ilimsk and Bratsk. The region is home to some crypto mining data centers by BitRiver, the country’s largest crypto mining colocation service provider.
Related: Data center operators have ‘no problem’ with new crackdown on Russian crypto
BitRiver founder and CEO Igor Runets told UKTN that the company fully supports the Energy Ministry’s latest initiative:
“It’s fair and economically sound. Moreover, it will help the miners to enter the legal realm, so that the state can take the first step towards regulating the industry, which will ultimately lead to transparency of the whole industry.
Runets said the company pays for its data center electricity at business customer rates, paying “2.5 or 3 times more than home customers.”
Russia has become one of the main locations for Bitcoin (BTC) mining activity following the surrender of Chinese miners. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin miners in Russia account for 11% of the total global distribution of the BTC mining hash rate, ahead of only Kazakhstan and the United States.