Russia considers new energy tariffs as Chinese crypto miners move

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The Russian Ministry of Energy plans to introduce special electricity tariffs for cryptocurrency miners after industry migrated to the country from nearby China.

Russian Energy Minister Nikolai Shulginov announced on Wednesday that the agency is working on a new framework to differentiate tariffs between general use and mining of cryptocurrencies, local news agency RBC reported on October 13.

Shulginov said that cryptocurrency miners in Russia shouldn’t use electricity at private tariffs, stating:

“We cannot allow the miners to capitalize on the situation at the expense of the low electricity tariffs for private households […] In our opinion, in order to maintain the reliability and quality of the electricity supply, it is necessary to forbid the miners from consuming electricity at household tariffs. “

According to reports, some Russian regions have faced explosive spikes in energy use, allegedly due to Chinese miners leaving the country during a nationwide crackdown on crypto.

Russia’s Irkutsk region, which is about 1,700 kilometers from China, has reportedly exceeded its energy consumption by nearly 160%. Irkutsk Governor Igor Kobzev cited “avalanche growth” in energy use in the jurisdiction and blamed the illegal crypto-mining activity exacerbated by the exodus of miners from China.

As one of the largest regions of Siberia, the Irkutsk region is rich in energy resources and is home to several large hydropower plants in cities such as Irkutsk, Ust-Ilimsk, and Bratsk. The region is home to some crypto mining data centers from BitRiver, the largest provider of crypto mining colocation services in the country.

Related: Data center operators have “no problem” with the new Russian crypto penetration

BitRiver founder and CEO Igor Runets told Cointelegraph that the company fully supports the latest initiative from the Department of Energy:

“That is fair and economical. In addition, it will help miners get into the legal area so that the state can take the first step to regulate the industry, which will ultimately lead to transparency of the entire industry. ”

Runets said the company pays business rates for electricity in its data center, which is “2.5 or three times more than private individuals.”

Russia has become one of the top locations for Bitcoin (BTC) mining after the capitulation of Chinese miners. According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin miners in Russia account for 11% of the total global BTC mining hash rate distribution, surpassing only Kazakhstan and the United States.