Kazakhstan’s Ministry of Energy plans to limit the electricity consumption of the the nation’s crypto-mining industry to a total of 100 megawatts as it looks to curb power shortages.
All newly authorized plants will be limited to using just 1 MW over two years, according to an Oct. 1 draft signed by the newly appointed energy minister, Magzum Maratuly Myrzagaliev. The ministerial order doesn’t say if the restriction ends after that period.
Kazakhstan has become the second-biggest contributor to the bitcoin network after a crackdown in China that started in May drove out crypto mining companies. It now accounts for 18% of the global hashrate, a measure of computing power used to mine bitcoin, according to the Cambridge Center for Alternative Finance.
The 1 MW limit is far below what many existing industrialized mines operate on, but is more than many small cities consume. For example, earlier this week BIT Mining said it is investing in a site in Ohio to take capacity to 100 MW.
The ministerial order takes effect 60 days after its publication.
Increased demand for electricity is testing the Central Asian country’s electricity grid. Kazakhstan’s largest city, Almaty, was hit by a total blackout in mid-July. Coal plants suffered outages in October, adding to the power shortages, Reuters reported.
At a Sept. 30 conference, the energy minister blamed the crypto mining boom for the power shortages, local news site Kazakhtan Today reported.
The order also called on the country’s national grid operator, KEGOC, to audit any power plants with capacity of 5 MW within 10 working days. KEGOC is to look for ways crypto miners can use to plug into electricity plants and submit its findings to the ministry.
Eliza Gkritsi is a CoinDesk news reporter based in Asia.
By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy.
