The crypto mining industry may see its share of Russia’s energy consumption double in 2022, according to a senior Energy Ministry official. The department supports a bill designed to regulate the sector, which is likely to be adopted this year.
Russian Energy Ministry Anticipates Increase in Electricity Consumption of Crypto Mining
The share of cryptocurrency miners may reach 1.5 – 2% of Russia’s total electricity consumption by the end of 2022, according to Russian Deputy Energy Minister Pavel Snikkars. During a crypto conference organized by the business news portal RBC, the government official recalled that last year’s figure was around 1%.
The availability of electricity for mining across the vast country would depend on the number of users who want to connect to the grid in a particular location, Snikkars added. In some Russian regions – the deputy minister mentioned Murmansk as an example – unused power production capacities are currently being offered to the crypto industry.
Snikkars explained the availability of such resources with the way new power plants are built. A decision to start the construction of one, which can take up to a decade in the case of nuclear stations, is based on requests from potential consumers in the area. However, some projects are not ready to launch on time or not at all and, as a result, the generation capacities are not fully loaded.
Individuals minting digital currencies also cause problems to increase consumption in certain areas with low electricity rates, where the infrastructure cannot handle the increasing power usage, the expert said. He emphasized that the energy industry must take measures to ensure a reliable supply for other users.
During the event, Pavel Snikkars also spoke about the efforts to regulate cryptocurrency mining as a commercial activity, voicing his department’s support for the draft legislation presented in mid-November at the lower house of the Russian parliament, the State Duma.
The bill amending the current law “On Digital Financial Assets” is still being approved by the Duma’s Legal Department and reviewed by the Central Bank of Russia. At the forum, the head of the parliamentary Committee on Financial Market, Anatoly Aksakov, said that he expects lawmakers to pass the law before the end of the year.
The statements by Snikkars and Aksakov follow a recent report which reveals that demand for mining equipment has increased in Russia in the past two months. In addition to electricity consumption, mining revenues also grew for several years before this year’s crypto winter and sanctions due to the war in Ukraine affected Russian mining companies.
Do you think power consumption in the Russian crypto mining industry will continue to grow? Let us know in the comments section below.
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