Iran to cut power supply of legal block reward miners starting July

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The government of Iran has said it will cut off supply to all authorized block reward miners in the country starting in July. The move is in anticipation of an electricity deficit as the country approaches the peak summer season. 

In an interview with the state-run Islamic Republic of Iran Broadcasting (IRIB), spokesperson for Iran’s Ministry of Energy Mostafa Rajabi Mashhadi stated that Iran has already recorded an all-time high electricity consumption. The forecast for consumption in the coming weeks highlights the need to limit the electricity supply. 

“Last week, the country’s electricity consumption recorded an all-time high of 62,500 megawatts (MW) during peak consumption, which is a significant figure. According to forecasts, this week’s consumption requirement will exceed 63,000 MW, which means we must limit electricity supply,” he said. 

He added that all the 118 registered block reward mining complexes in the country are to suspend their connection to the grid. Mashhadi is the manager of the Iran Grid Management Company (also called Tavanir) and spokesperson for the Ministry of Energy. 

Iran implemented a similar directive last December as the peak-winter season approached, leading to increased household electricity demand. Iran has struggled to invest in improving its electricity generated due to the international sanctions it is facing. 

Iran facing challenges from illegal block reward miners 

Due to its significantly subsidized electricity tariff, Iran remains an attractive location for block reward miners. The Middle Eastern country currently accounts for 0.12% of the hash rate of the Bitcoin network, according to data from the Cambridge Center for Alternative Finance. 

Cheap electricity in Iran has also attracted illegal block reward miners who use subsidized electricity without due registration. The Iran Power Generation Distribution and Transmission company has proposed to impose new penalties for these illegal miners. 

The proposal includes sky-high fines, jail time, business license revocation, and asset confiscation. The applicable fines are to be increased a minimum of three times and a maximum of fivefold. The country also offers a $1,000 bounty for exposing illegal block reward mining operations. 

All of Iran’s efforts at curbing illegal block reward mining operations have led to the shutdown of over 7,000 such rigs since 2020, according to a count by Business Insider. These illegal mining operations are estimated to have consumed over 645 MW of power—an amount equal to the annual consumption of three regions of the country.

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