Russia’s Irkutsk region saw its energy consumption rates surge by 160% following China’s crackdown on crypto mining.
The Russian Ministry of Energy is looking to introduce special electricity tariffs for cryptocurrency miners following a migration of the industry into the country from nearby China.
Russian Energy Minister Nikolai Shulginov announced Wednesday that the authority is working on a new framework to differentiate tariffs between general usage and cryptocurrency mining, local news agency RBC reported on Wednesday.
Shulginov said that cryptocurrency miners in Russia should not consume electricity at residential tariffs, stating:
“We can’t let miners capitalize on the situation at the expense of low residential electricity tariffs […] In order to maintain the reliability and quality of power supply, we believe it is necessary to prohibit miners from consuming electricity at residential tariffs.”
Some Russian regions have reportedly faced explosive growth in energy consumption, allegedly due to Chinese miners exiting 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 rates exceed last year’s by almost 160%. Irkutsk Governor Igor Kobzev pointed to “avalanche-like growth” of energy consumption in the jurisdiction, blaming illegal crypto mining activity worsened by the exodus of miners from China.
One of the biggest regions of Siberia, the Irkutsk region is rich with energy resources, hosting several large hydroelectricity stations in cities such as Irkutsk, Ust-Ilimsk and Bratsk. The region is home to some crypto mining data centers by BitRiver, the country’s largest crypto mining colocation services 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 economically sound. Moreover, it will help miners enter the legal field, so the state can take the first step towards regulating the industry, which will ultimately lead to transparency of the entire industry.”
Runets said that the company pays for its data center electricity at business customer rates, paying “2.5 or 3 times more than individuals.”
Russia has become one of the top locations for Bitcoin (BTC) mining activity following the Chinese miner capitulation. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin miners in Russia account for 11% of the total global BTC mining hash rate distribution, bested by only Kazakhstan and the United States.
