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Kazakhstan to limit power consumption in crypto mining

Kazakhstan’s Ministry of Energy drafted a new regulation on limiting crypto mining operations. This will require crypto miners in the country to limit each transaction to 1 megawatt (MW) over the span of two years. The draft also limits each consumer’s digital mining activities to not exceed 100 MW within the country’s borders.

The draft was signed by the newly appointed energy minister, Magzum Maratuly Myzagaliev. This new regulation will take effect 60 days after its publication last October 1. 

During a government briefing last September 30, Mirzagaliev blamed the crypto mining activities in Kazakhstan for the increased electrical consumption. According to a report by Kazakhstan Today, the country’s energy consumption increased by 7% compared to the previous year. 

Kazakhstan is the second-largest Bitcoin mining country after China that recently imposed a crypto ban. According to the data presented by the Cambridge Centre for Alternative Finance, the country accounts for 18% of the global hash rate. 

This surge in crypto mining activities requires massive electricity that is currently testing the electricity grid of Kazakhstan. The country experienced a total blackout in July and was succeeded by coal plant blackouts on October 15.

KEGOC, Kazakhstan’s grid operator, had to limit power supply to some consumers after three major coal-fired power stations experienced shutdowns. 

According to the country’s grid operator, GRES-1, GRES-2 and Aksu plants were the ones affected by the power outage. An estimated population of 1.8 million Kazakhstan citizens were affected by the power interruption that started around 2 PM.

In a report by Radio Free Europe Radio Liberty (RFE/RL), public transportation was also interrupted. Almaty’s subway system stopped operations and 400 police officers were deployed to help ease and direct traffic after all of the traffic lights ran out of power.

‘These emergency power plant outages will lead to unacceptable power deviations at the border with Russia’s energy system, overloading the interstate power transmission lines and creating a risk of a systemic malfunction’, KEGOC said in a statement to Reuters. 

Mirzgaliev also noted that crypto mining activities do not make a significant impact on the socio-economic activities of the country. 

The energy minister said in the briefing that the government wants to resolve this issue regarding the delivery of energy capacity in the country. He noted that Kazakhstan has good crypto opportunities to develop but, in the meantime, KGOC was given the right to limit or reduce consumption volumes, especially for crypto and data mining centres. 

‘If there is a demand on the part of miners for the corresponding electricity, then it can be satisfied by building new generation sources from renewable energy sources’, Mirzgaliev added.

Proposals for the energy crisis are being set in motion to neutralise all possible risks. According to the minister of energy, the government will build new stations in the next five years to generate about 3 thousand megawatts.

Know more about Kazakhstan’s cryptocurrency updates here at Cryptoshimbun!

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