Incentives include rewards worth 100 million rials ($480) for those who cooperate with energy officials in identifying illegal crypto mining centers, according to Mohammad Hassan Motevalizadeh.
Tavanir is legally authorized to shut down illegal crypto mining businesses, he said, adding that 1,100 illegal mining centers have so far been identified, Tasnim News Agency reported.
Motevalizadeh said those who want to use the national power grid for mining cryptocurrency should play by the rules and must have permit for their work.
The utility, affiliated to the Energy Ministry, has contracts to sell 400 megawatts to authorized miners.
Cryptocurrency mining in Iran has become a lucrative business in recent years due to the extremely low-cost (subsidized) electricity.
Mostafa Rajabi Mashhadi , the Energy Ministry spokesman for the power department, had said earlier that production of a single unit of bitcoin uses 200 million rials in state subsidies.
This is at a time of dire shortage of power as the mercury rises and consumption peaks, at times resulting in rolling blackouts.
Last week Tavanir warned that illegal miners will face full force of the law because of the loss they inflict on the national power grid.
With cryptocurrency mining challenging the power industry, apparently with impunity, energy authorities have voiced concern about the enormous pressure exerted by such activities on the grid.
According to deputy energy minister, Homayoun Haeri, mining a bitcoin needs 72,000 kilowatt electricity that equals power consumption of 28 households per year.
He warned that until stringent measures are not taken to penalize illegal miners, their annual power consumption would reach 2,000 MW.
Legalizing Prospect
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 will recognize crypto currency mining as a legal industry. This was first welcomed by miners as a positive move, but many complained about the high power tariffs. They concealed their lucrative operations and went underground to deceive energy authorities.
The Energy Ministry said electricity bills for miners will be based on average power export rates and as per forex parity rates in the secondary market, known as Nima (Persian acronym for Integrated Forex Deals System). Rates at Nima are lower than the open market.
Although electricity export tariffs vary and subject to a variety of factors, namely fuel prices in the Persian Gulf region, power can be sold for at least 11 cents per kilowatt hour in international markets.