Due to issues with electrical distribution, Abkhazia officials go on the offensive, shutting down power-hungry crypto mining farms and seizing mining equipment.
Abkhazia’s Electricity Problems Are Exacerbated by Crypto Mining
Many people in the self-governing territory of Abkhazia have turned to crypto mining to generate new coins in order to increase their income. The increased use of mining rigs, on the other hand, has put strain on the power grid. According to Levan Melbonia, chairman of the board of directors at the Inguri power plant, located on the border between Georgia and Abkhazia, cryptocurrency mining rigs can cause an increase in power consumption of 60-90MW, contributing to the total annual consumption of two billion kWh per year, which is 10 to 15% more than what should be consumed. Following an informal 1997 agreement, Georgia and Abkhazia share the power generated by the Inguri hydroelectric power plant in a 60 percent-40 percent split.
For many years, the price of electricity in Abkhazia has been low, with the most recent publicized tariff for households being 0.4 Rubles per 1 kWh, resulting in an influx of foreign miners into the region, particularly from neighboring Russia. According to the plant’s chairman of the board of directors, the region of Abkhazia does not pay for generation, only for distribution.
However, Abkhazia’s distribution infrastructure has seen better days, and much of the electricity is not reaching consumers. Furthermore, the hydroelectric plant was recently shut down for repairs, resulting in blackouts from mainland Russia via a 220kW and a 500kW line.
The police have launched an anti-crypto mining offensive.
Despite police raids in an attempt to crack down on crypto mining, which resulted in the seizure of 6000 mining rigs and the closure of mining farms, an estimated 30000 rigs remain. Many people still have mining rigs in their homes, and recent government offensives haven’t deterred the vast majority of miners from engaging in what is now illegal activity. Some miners connect to the grid illegally, leaving them without legal recourse.
Much work remains to be done in order to make cryptocurrency mining profitable.
Raids and cooperation with law enforcement officials will continue, according to Akhra Gagulia, head of the Gudauta department of the region’s power utility Chernomorenergo, but much work remains in enforcing the government offensive. The government is considering obtaining power from the Russian Federation, which would allow it to allow mining farms in the region that are legally connected to the power grid.