Legal Crypto Mining Rigs in Iran Will Face Power Cut as Govt Cites It is Unsustainable

Vignesh Karunanidhi
Legal Crypto Mining Rigs in Iran Will Face Power Cut as Govt Cites It is Unsustainable
Source: Forbes

Iran has decided to cut down on the power supply for the legal crypto mining rigs in the country. The announcement was released by a local news outlet in the country called Arz Digital. The spokesperson of the Ministry of Energy in Iran, Rajabi Mashhadi, addressed that licensed crypto firms will be cut off from the power supply starting from July till the end of the regulation.

The new decision is in the forecast of the shortage of electricity that the country might bear witness to during the peak summer season. Mashhadi stated that there are 118 authorized mining centers in the country which should cut off their electricity supply from July beginning.

Source: Al Jazeera

Iran witnessed an all-time high electricity consumption rate

“Last week, the country’s electricity consumption recorded an all-time high of 62,500 megawatts (MW) during peak consumption, which is a significant figure. According to forecasts, this week’s consumption requirement will exceed 63,000 MW, which means we must limit electricity supply.”

Rajabi Mashhadi

The remarks came after the country’s Ministry of Energy announced a dismal increase in electricity generating capacity of 1.2 gigawatts (GW) in 2021. This was far less than the predicted increase of 3.5 GW, resulting in a power deficit.

Iran falls short of keeping up with the electricity shortage due to international sanctions. This leads to a situation for Iran where it lacks the necessary investment in power generation and production of natural gas in order to keep pace running with its consumption.

Source: CoinDesk

Demand, on the other hand, is surging, thanks to the country’s exceptionally cheap electricity rates. Iran’s average residential electricity costs very little, as $0.005 per kilowatt-hour (kWh), a fraction of Iraq’s $0.024 per kWh and the United States’ $0.159 per kWh.

Iran contributes over 0.12% of the global Bitcoin hash rate, according to Cambridge University. The decision will make the country slip from its position as a top ten country in terms of Bitcoin mining productivity.