The Kyrgyz government is trying to disconnect all crypto mining facilities from the electricity grid, citing energy shortages as the main reason.
The Central Asian country relies heavily on hydroelectric power, and the water in one of its main reservoirs is currently running low at a serious level.
Kyrgyzstan authorities turn off mining hardware to save electricity
Due to the severe lack of available electricity in Kyrgyzstan, Kyrgyzstan authorities have ordered the closure of all crypto farms.
In an interview with online news outlet 24.kg published on Wednesday, Energy Minister Talaybek Ibraev announced:
“In view of the current power shortage, the decision has been taken to completely close all mining farms across the Republic.”
Mr. Ibraev emphasized that he is closely monitoring this issue. He also said he had previously warned that the winter would be harsh and urged people to save electricity.
Government representatives explained that domestic power generation is facing challenges, mainly due to very low water levels in the Toktogul dam.
The latter is the main water source for the Toktogul hydroelectric power plant, which at 1,260 MW is the largest power plant of its kind in Kyrgyzstan. The country relies heavily on electricity generated by HPP.
The Minister of Energy elaborated as follows:
“Yes, we are experiencing a period of low water. Currently, the water volume in the Toktogul reservoir is about 2 billion cubic meters lower compared to the same period last year.”
“We need to save electricity to maintain the 7 billion cubic meters of water stored by April 1, when the heating season ends and the Toktogul reservoir begins to fill up,” he added.
Talaybek Ivraev also emphasized that the authorities are implementing various other measures aimed at limiting transmission losses and overconsumption.
The government is also trying to increase production from renewable sources by commissioning small-scale hydropower plants. A 120MW solar power plant is expected to be operational by the end of the year.
Ibraev insisted his country’s energy system was not yet in crisis, but warned that it was already operating under increased load.
Cryptocurrency mining is said to be the cause of energy shortages across the region
Ibraev announced at a press conference on Thursday that neighboring Kazakhstan would return more than 30% more electricity than it received from Kyrgyzstan in the summer.
The two former Soviet republics have a long-standing reciprocal supply agreement to deal with seasonal power shortages.
“This system has always existed between the Kyrgyz Republic and Kazakhstan. Since electricity cannot be stored, in summer we transfer surplus electricity to neighboring countries to prevent unnecessary drainage. When we need more electricity in winter, neighboring countries give it back,” the minister explained.
Kyrgyzstan will now receive up to 200 million kilowatt-hours of electricity from Kazakhstan as needed to maintain the stability of its power grid and power generation system during peak winter consumption periods.
virtual currency mining, Energy has surged across the region after China banned it several years ago, but it is also blamed for Kazakhstan’s energy shortage.. Astana has responded to the problem by implementing strict regulations and increasing electricity prices.
Russia has responded to similar challenges in some parts of the country with electricity subsidies, but it has imposed seasonal or permanent restrictions on mining in about a dozen regions, from Siberia to the Caucasus, and recently added two more to the list.
In September, Kyrgyzstan’s parliament approved a bill “On Virtual Assets” aimed at regulating crypto-related activities in the economy, including mining, and envisioning the establishment of a national Bitcoin reserve.
The country’s Ministry of Finance last week registered the gold-backed, dollar-pegged stablecoin USDKG, which is expected to be listed on cryptocurrency exchanges in the coming days.
According to a report by Cryptopolitan, banks and crypto platforms operating in the country are subject to sanctions imposed over their links to another stablecoin, A7A5, which is pegged to the Russian ruble.