3 Power Plants to Feed Crypto Miners

EghtesadOnline: Three thermal power plants are to sell their electricity to authorized cryptocurrency miners in Iran, the managing director of Thermal Power Plant Holding Company, affiliated to Energy Ministry, said.

News ID: ۷۵۱۰۶۴

22 September 2020

Mohsen Tarztalab said the company will hold an auction to sell electricity from Ramin Power Plant, Neka Power Plant and Shahid Montazeri Power Plant.

Capacity of the power plants is 30-40 megawatts, 15 MW of which will be sold to crypto miners, Tarztalab said, adding that the earnings will be used to renovate and repair the power plants.

The electricity sector in Iran is grappling with a big gap in earnings and expenditures. “Electricity sale to crypto miners is [now] seen as a source of revenue,” he was quoted as saying by IRNA.

“Steep increase in currency rates, which has increased costs of importing equipment plus rules imposed by the government to sell power at relatively low rates to domestic buyers, has widened the gap between revenues and expenses.”

The cost of producing power, including production and transmission, is at least 3 cents per kilowatt-hour, but consumers are charged less than 1 cent per kWh.

Like many countries, the Central Bank of Iran has banned trade in cryptocurrency. However, the government legalized businesses related to mining digital currencies last year.

In July 2019 it said it will recognize crypto currency mining as a legal industry. The initiative was first welcomed by miners as a positive move, but many complained when the government announced that it would charge the miners the same tariffs set for power export. Tariffs for power export much higher than domestic rates.

The government raised tariffs for crypto mining to seven cents/kilowatt-hour, to help raise revenue to address concerns over possible power outages in summer and prevent costly indirect subsidies going into the pockets of miners.

As per an earlier 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 summer (June to Sept).

So far 624 mining farms have received permits from the Industries Ministry. Many more are operating underground.

Outlining rules governing energy sale to crypto miners, Mostafa Rajabi, head of the Power Generation, Distribution and Transmission Company (Tavanir) said earlier that power plants can supply authorized cryptocurrency miners so long as electricity is sold as per officially-announced tariffs.