The government of Kyrgyzstan is disconnecting all crypto mining facilities from the grid, citing energy shortages as the key reason.
The Central Asian nation is heavily reliant on hydroelectric generation, and the water in one of its main reservoirs is now critically low.
Authorities in Kyrgyzstan unplug mining hardware to save electricity
Officials in Kyrgyzstan have ordered all crypto farms shut down as the country is experiencing significant deficits in terms of available electrical power.
In an interview with the online news outlet 24.kg published Wednesday, Minister of Energy Taalaibek Ibraev announced:
“Given the current electricity shortage, a decision has been made to completely shut down all mining farms throughout the republic.”
Ibraev emphasized he is keeping a close eye on the issue. He also stated that he had previously warned that the winter would be difficult, urging people to conserve power.
The government representative explained that electricity generation in the country is facing challenges mainly due to the very low water level at the Toktogul Dam.
The latter is a major source of water for the Toktogul Hydroelectric Station, the largest power plant of this kind in Kyrgyzstan, with its 1,260 MW. The country depends heavily on electricity generated by its HPPs.
The energy minister detailed:
“Yes, we’re experiencing a low-water period. Today, the Toktogul reservoir contains almost 2 billion cubic meters less water than the same period of last year.”
“To maintain its capacity at 7 billion cubic meters by April 1, when the heating season ends and the Toktogul Reservoir begins to fill, we need to conserve electricity,” he added.
Taalaibek Ibraev also highlighted that the authorities are implementing a range of other measures meant to limit transmission losses and excessive consumption.
The government is also trying to increase production from renewable sources by commissioning smaller hydroelectric power plants. A 120 MW solar station is expected to be launched by the end of the year.
Ibraev insisted his nation’s energy system is not in crisis yet, while warning it is already operating under increased loads.
Crypto mining blamed for energy shortages across the region
Speaking at a press conference on Thursday, Ibraev unveiled that neighboring Kazakhstan will return over 30% more electricity than it received from Kyrgyzstan in the summer.
The two former Soviet republics have a long-standing mutual supply agreement that helps them deal with seasonal power deficits.
“This scheme has always existed between the Kyrgyz Republic and Kazakhstan. Electricity cannot be stored, and to prevent unnecessary water discharges in the summer, we transfer the excess to our neighbors. In the winter, when we need more electricity, they return it,” the minister explained.
Kyrgyzstan will now receive up to 200 million kilowatt-hours from Kazakhstan, when needed, to maintain the stability of its power grid and generation system during periods of peak consumption in the winter months.
Crypto mining, which surged across the region a few years ago after China banned the activity, has also been blamed for energy shortages in Kazakhstan. Astana is coping with the issue by implementing strict regulations and higher electricity rates.
Russia, which is also dealing with similar challenges in some parts of the country with subsidized electricity rates, has imposed seasonal or permanent restrictions on mining in about a dozen of its regions – from Siberia to the Caucasus, recently adding two more to the list.
In September, Kyrgyzstan’s parliament approved a bill “On Virtual Assets” aimed at regulating crypto-related activities in its economy, including mining, and envisaging the establishment of a national Bitcoin reserve.
Last week, the country’s finance ministry registered a dollar-pegged stablecoin backed by gold, USDKG, which is going to be listed on cryptocurrency exchanges in the coming days.
Banks and crypto platforms operating in the country have been targeted in sanctions, as reported by Cryptopolitan, imposed over links to another stablecoin, the Russian-ruble pegged A7A5.
