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Iran To Cut Power Supply To The Country’s Legal Crypto Mining Rigs

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Iran To Cut Power Supply To The Country's Legal Crypto Mining Rigs

Rajabi Mashhadi, a spokesperson for Iran’s Ministry of Energy, announced the day before that the institution would stop the power supply to all of the country’s licensed crypto mining firms by the beginning of July, according to local news source Arz Digital.

“There are already 118 authorized [digital currency] extraction facilities in the country. Which must turn off their electrical supply from the national grid from the beginning of July.” Mashhadi said, citing an expected electricity deficit from the peak-summer season.

“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.”

What You Should Know 

The move comes after the country’s Ministry of Energy reported a disappointing increase in electricity generation capacity of 1.2 gigawatts (GW) in 2021.

This was far less than the predicted gain of 3.5 GW, resulting in a power deficit.

Iran lacks the necessary investment in power generation capacity and natural gas output to keep up with demand due to international sanctions.

Demand, on the other hand, is surging, thanks in part to the country’s extremely low electricity prices.

iexclusivenews reports that Iran’s average residential electricity costs as little as $0.005 per kilowatt-hour (kWh). A fraction of Iraq’s $0.024 per kWh and the United States’ $0.159 per kWh.

The Iranian government spends about $60 billion each year in indirect subsidies to depreciate electricity prices for political purposes.

Iran accounted for 0.12% of the Bitcoin (BTC) network’s hash rate, according to Cambridge University.

And was formerly in the top 10 countries in the world by BTC mining productivity.

However, iexclusivenews Nigeria reports that Iran market share of Bitcoin mining plummeted from 4% in the previous years, owing in part to a severe power crisis in the summer of 2021.