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Russia Considers New Energy Tariffs As Chinese Crypto Miners Move

The Russian Energy Ministry is looking to introduce special electricity tariffs for cryptocurrency miners, following the industry’s migration to the country from China.

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

Shulginov stated that cryptocurrency miners in Russia should not consume electricity at residential fees, adding:

“We can’t let miners capitalize on the situation at the expense of low residential electricity rates” […] In order to maintain the reliability and quality of power supply, we believe it is necessary to prevent miners from consuming electricity at residential rates.”

Some Russian regions have reportedly faced explosive growth in energy consumption, reportedly due to the exit of Chinese miners from the country amid a nationwide crackdown on crypto.

Russia’s Irkutsk region, located about 1,700 kilometers from China, has reportedly seen its energy consumption rate nearly 160% higher than last year. Igor Kobzaev, the governor of Irkutsk, pointed to an “avalanche-like increase” of energy consumption in the jurisdiction, accusing the exodus of miners from China of worsening illegal crypto mining activity.

One of the largest regions of Siberia, the Irkutsk region is rich in energy resources, hosting several large hydroelectric stations in cities such as Irkutsk, Ust-Ilimsk and Bratsk. There are a few crypto mining data centers in the region by BitRiver, the country’s largest crypto mining colocation service provider.

related: Data Center Operators Have ‘No Problem’ With New Russian Crypto Crackdown

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

“It is fair and financially sound. In addition, it will help miners to enter the legal arena, so the state can take the first step towards regulating the industry, which will ultimately lead to transparency in the entire industry.”

Runets said the company pays for its data center electricity at business customer rates, “2.5 or 3 times higher than individuals pay.”

Russia has become one of the top places for bitcoin (BTC) mining activity after Chinese miners surrendered. According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin miners in Russia account for 11% of the total global BTC mining hash rate distribution, which is only bested by Kazakhstan and the United States.

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