Rolling blackouts return to Abkhazia following failure to rein in cryptocurrency mining
Rolling power outages have been reintroduced in Abkhazia.
Now the lights are turned off for a total of six hours every day throughout the republic. The reason for the energy deficit is cryptocurrency mining. The authorities banned it at first, but failed to implement the ban. And later they legalized and tried to regulate cryptomining, but this did has not helped to solve the problem either.
The Ingur HPP, which is jointly used by Georgia and Abkhazia, is the only power plant that powers the republic. The 40 percent of its generation due to Abkhazia had already been spent by the beginning of October.
According to power engineers, the deficit was caused by cryptocurrency miners who estimate that about 30 percent of all energy consumed comes from the activities of the so-called ‘crypto farms’.
Since December 2018, mining has been banned. However, due to the absence of a real system of administrative punishment, this measure did not improve the situation with the energy deficit, but made it even worse.
The mining business, which has gone into the ‘shadows’, has quadrupled in a year and a half, since the import of crypto farms into Abkhazia was not banned.
In October 2020, the government decided to allow crypto farms to operate, raising their rates for energy consumed to 1.5 rubles [about 2 cents] per kW, while temporarily, for two months, banned the import of crypto equipment into the country. By this decision, the authorities expected to take control of this business area and at the same time reduce the number of mining farms.
But that didn’t help either. As a result, they had to switch to a saving mode – to introduce rolling six-hour power cuts throughout Abkhazia.
The opposition is extremely dissatisfied with the actions of the authorities.
“The motive for this decision (the legalization of mining) is very doubtful – an increase in the state budget while the miners observe tax discipline. However, it is already obvious to everyone that such half-measures will not drastically change the situation,” opposition organizations said in a joint statement.
According to the opposition, no more than 20 percent of all “miners” in the country legalized their operations. The opposition believes that officials of different levels and their entourage are involved in the shadow mining business.
In this regard, the united opposition has appealed to the country’s leadership with a demand to take tough measures to suppress illegal activities for the extraction of cryptocurrencies, ‘causing enormous damage to the energy system of Abkhazia and aggravating the plight of our citizens.’