Tech

Dennis Wafula

Abkhazia authorities cut off power supply to 15 crypto mining firms

Abkhazia authorities have cut 15 mining facilities off from the country’s electric grid. According to the authorities, the short-term goal is to overcome power shortages during the winter.

The decision comes after electricity companies in the country raised concerns on increased energy consumption by crypto mining companies. According to the announcement made by Chernomorenergo, a state-owned electricity company, the disconnected mining firms had a total power capacity of 8950kWt which could be used to power 1,800 households or the administrative region around Abkhazia’s capital, Sukhumi.

Mining firms are reportedly cooperating with authorities on the temporary halt to their operations. Chernomorenergo hopes that the temporary energy cut will provide electricity for homes, social institutions like hospitals and important production facilities during the winter.

In addition to the temporary halt, authorities have recognized the need for regulation in Abkhazia crypto space. Recently, Raul Khajimba, the president of Abkhazia scheduled a government meeting, which was intended to come up with draft laws for the mining sector.

Abkhazian electric power system has been overstressed due to increased crypto mining activities. Last year in March, Abkhazia is reported to have consumed about 207 kWh. This electricity was mainly from Enguri hydroelectric station and Vardnili plant.

Mining activities have primarily increased in the region due to the lack of strict regulations and cheap electricity. The mining companies so far have played a decisive role in the community. The mining companies helped utilize excess power produced by a hydropower complex located on the border and shared with Abkhazia mother country, Georgia. The companies also have made use of abandoned factories from Soviet times.

In 2018, many governments took action to control energy consumption by crypto mining firms. The first to take actions was New York, which forced miners to pay higher electricity rates. Later in July, authorities in the region came up with new electricity rates that were more favorable.

Quebec followed suit with authorities placing a ban on electricity sale to crypto miners. Eventually, the Quebec government lifted the ban and started charging slightly higher rates to crypto miners.

In November, the Chelan Country public Utility District (PUD) in Washington proposed new electricity pricing structure for cryptocurrency miners. The proposed structure was aimed at cutting down the electricity demand in the Central Washington region.

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