Dagestan Power Firm Pleads Crypto Miners to Halt Operations to Avoid Blackouts

Table of Contents

• Key Takeaways
• Overloaded Power Grid
• 1MW Mining Farm Equivalent to 300 Apartments
• Serious Energy Supply Concern

Despite ongoing efforts to crack down on illegal crypto mining activities, state-run power providers in Dagestan are facing difficulties in effectively managing the growing energy demand from mining farms.

Key Takeaways

• Dagenergo, Dagestan’s state power provider, has requested that crypto miners suspend their mining activities to prevent power outages during the winter season.
• The energy company has dismantled 13 crypto mining centers so far in 2023 but admits it’s challenging to quickly identify illegal mining farms.
• Illegal crypto mining operations have caused damages worth ~$1.8 million to Dagestan’s power grid between 2022 and mid-2023.
• Dagenergo’s plea indicates a serious energy supply concern due to crypto mining which can jeopardize residential electricity provision during cold periods.

Dagenergo, the state-run power provider in Dagestan, has asked cryptocurrency miners to halt their mining operations to avoid overloading the region’s electrical grid during winter, according to a Telegram message the company posted.

Overloaded Power Grid

The company specifically mentioned several parts of Makhachkala, Dagestan’s capital city, where mining farms are reportedly causing a high load on the power grid. Dagenergo dismantled 13 crypto mining centers this year and continues to identify more illegal farms.

However, the energy firm admitted it is difficult to quickly identify illegal mining operations despite technological advancements in mining hardware.

PAO Rosseti, another state power provider, shutdown 36 illegal crypto farms in Dagestan between 2022 and the first half of 2023, causing total damages of approximately 157.95 million rubles (~$1.8 million).

1MW Mining Farm Equivalent to 300 Apartments

One significant example of illegal mining activity was a 1MW farm in Kaspiysk with power usage equivalent to that of a residential complex of 300 apartments.

Illegal crypto mining has also been a persistent problem in the neighboring republic of Abkhazia, resulting in government raids against such operations.

Serious Energy Supply Concern

Dagenergo’s request indicates a serious energy supply concern due to crypto mining, which can jeopardize residential electricity and heat provision during the cold season.

With winter approaching, crypto miners will need to weigh the impact of their operations on local communities and consider voluntarily suspending activities to avoid power outages.

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