Iran: Crypto Mining Power Tariffs Revised Downward

EghtesadOnline: Addressing concerns over high electricity prices for legal crypto mining operations, Iran's Ministry of Energy said Wednesday that it has modified the tariffs for authorized miners based on the seasonal power consumption patterns.

News ID: ۷۴۸۹۶۵

16 November 2019

Henceforth miners will be charged 4,800 rials for one kilowatt-hour -- equal to half the electricity export rate in autumn, winter and spring.

However, billings will be made based on 19,300 rials/kw, two times higher than the price for electrify export, in the peak summer season (June to September), the Energy Ministry news portal reported.

Electricity rates in Iran are among the lowest in the world -- 0.7 cent kilowatt-hour. This partly led to the sudden surge in crypto mining farms across the country, even in small rural areas where the grids could not handle the sudden heavy load, according to Financial Tribune.

The ministry's concerns over possible power outage in summer and the indirect subsidies going into crypto mining, prompted the government to significantly raise power tariffs for crypto mining to 7 cents/kilowatt-hour.

The rate was approved by the government as part of a plan to regulate crypto mining business in Iran.

However, it was strongly criticized by crypto miners. They did welcome legalization of the gradually expanding business but said the high rates would make it unfeasible.

According to Mostafa Rajabi, spokesman of the Energy Ministry, crypto mining is banned during the 300 hours of peak consumption during a year as announced by the ministry.

"We have also considered discounts for miners…they will be eligible for up to 20% discount if they operate in groups and with high capacity," Paven, the ministry's news service quoted him as saying on Wednesday.

Rajabi stressed that the terms would be applicable only to miners authorized by the Ministry of Industries, Mining and Trade.

The Industry Ministry is an appointed body in charge of authorizing crypto mining companies, whereas the Energy Ministry is tasked with providing legal miners access to the national grid and determine tariffs.

Clampdown in Summer

Back in spring, the Energy Ministry along with the Law Enforcement Forces, shut down a large number of mining farms in an attempt to prevent possible black outs during summer.

The farms were detected by studying the patterns of household consumption. However, to detect the remaining illegal crypto farms the ministry has announced rewards for those who report illegal cryptocurrency mining.

"Those who give information about unruly miners will be rewarded. The reward amounts to 20% of the losses inflicted on power grids by the reported unit's illegal operations," Rajabi said.

Meanwhile, prospective miners have another option regarding electricity use. They can set up their own mini-grids or renewable power plants. Those who want to build mini power plants should decide the location and subscribe to the national gas grid. The gas feedstock price for grids will be equal to 70% of gas export prices.