Cryptocurrency Mining in Limbo

EghtesadOnline: Power plants can supply authorized cryptocurrency miners so long as the electricity is sold at the agreed (lawful) tariffs, a spokesperson for the Power Generation, Distribution and Transmission Company (Tavanir) said.

News ID: ۷۵۰۵۶۵

29 July 2020

"Providing electricity to authorized crypto mining units also requires Tavanir's permission," Mostafa Rajabi Mashhadi was quoted as saying by IRNA.

As per law, miners are charged 4,800 rials for one kilowatt-hour that is half the electricity export rate in autumn, winter and spring. However, billings are planned to be based on 19,300 rials/kw, twice the price for exported electricity in summertime (June to Sept).

Rajabi Mashhadi reiterated Tavanir's stance on illegal crypto mining. "Selling electricity at lower rates is a measure aimed at supporting framing and industries," he said, adding that Tavanir will not let miners use subsidies for personal profit.

Power load peaked at all-time high of 58,104 megawatts last week, the highest consumption since records were kept a century ago.

While trading in cryptocurrencies is banned in Iran, the government is trying to legalize businesses related to mining digital currencies.

In July 2019 the government said it would recognize crypto currency mining as a legal industry. This was first welcomed by miners, but many complained about the higher tariffs. They later went underground to deceive the utilities.

This irked the government and it significantly raised tariffs for crypto mining to 7 cents/kilowatt-hour, to raise revenues to address concerns over possible power outages in summer and indirect subsidies going into the pockets of undeserving crypto miners.

However, due to higher tariffs, the government measure to legalize crypto mining has neither attracted investors nor discouraged illegal mining. "So far only 14 authorized mining units are operating," Rajabi said.

Electricity consumption of the 14 units is equal to the total used by three provinces, he added.

Officials say 1,100 illegal mining centers have been identified but many remain in business. How and why they are still operating is not known. In a recent move Tavanir said it would reward whistleblowers who name and shame unauthorized miners.

Electricity tariffs in Iran are among the lowest in the world. Rajabi and other energy officials have not said why with all the advanced production, distribution and control systems used by Tavanir it has failed to round up all the unruly miners and set the record straight.