Cryptomining Suspended for 2 Weeks to Save Power

EghtesadOnline: Iran Power Generation, Distribution and Transmission Company (Tavanir) has ordered licensed cryptocurrency mining farms to halt operations for two weeks to lessen power shortages across the country.

News ID: ۷۵۱۷۷۹

18 January 2021

Mohammad Hassan Motevalizadeh, the company managing director, made the announcement in an interview with IRNA adding that cryptomining farms consume 500-600 megawatts of electricity, half of which are unauthorized.

The utility is working to shut down illegal mining farms, he said. Those who illegally use subsidized power will be fined depending on losses they inflict on the national grid. "Their mining places will by disconnected from the national grid and wrongdoers face prosecution."

The largest licensed cryptomining farm in Iran is in Rafsanjan City in southern Kerman Province. "This center has also stopped operation for two weeks to help support the national power grid."

In the past several days rising home gas consumption disrupted gas supply as feedstock to power plants declined, forcing utilities to use mazut, a highly polluting and low quality fuel oil. That caused unprecedented air pollution in big cities, obliging power plants to resort to mazut and announce rolling blackouts. Tavanir said the widespread power outages in the capital was due to cuts in feedstock deliveries to power stations.

Motevalizadeh on Wednesday blamed cryptomining as one of the reasons that led to the power shortages unseen in recent memory. The steep rise in the price of cryptocurrencies in recent weeks apparently made mining more tempting for Iranians.

The power company has launched a nationwide program from Thursday to detect illegal electricity subscriptions and unauthorized crypto miners.

Whistleblowers

Motevalizadeh added that the government would offer rewards of up to 200 million rials to whistleblowers who report illegal cryptocurrency mining, the IRIB website said.

So far 500 cryptomining farms have been reportedly uncovered with the help of whistleblowers. Tavanir is legally authorized to shut down illegal crypto mining.

In July 2019 the government said it would recognize crypto mining as a legal industry and developed a legal framework to guide the operation of miners.

As per rules, authorized 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 based on 19,300 rials/kw or twice the price for exported electricity in summer (June to Sept).

According to Mostafa Rajabi Mashhadi, the Tavanir spokesman, 24 crypto mining units using 310 MW have taken permits from the Ministry of Industries, Mining and Trade.