Kazakhstan Shocked by Increased Demand for Electricity
The ban on cryptocurrencies operations and coin mining for financial organisations has led to the migration of miners from China. Some have settled in Russia and Iran, but the majority have moved to electricity-rich Kazakhstan, a country that relies fully on its electricity exports.
In 2017, Kazakhstan generated a surplus of 4.5 terawatts. Its close proximity to China and excess power generation have allowed the country to eagerly welcome Chinese miners. However, the load on electrical grids has turned out to exceed even the boldest forecasts.
A leading ASIC manufacturer, Bitmain, has built a mega rig with 50,000 Antminer S19 Pros in Kazakhstan. Each of these machines generates 110 terahashes per second and consumes 3.3 kWh, while their aggregate power consumption is 180 megawatts.
The influx of Chinese miners has elevated Kazakhstan to second place in the global hashrate ranking.
According to Cambridge University, China is fully out of the Bitcoin mining game. Currently, the United States ranks first in mining, with a 35% share, while Kazakhstan is in second with 18%. The latter’s hashing power is estimated to be worth 22Eh/s, and the power consumption is 5 MWh of electricity. According to Kazakhstan’s Ministry of Energy, one rig consumes an average of 3.6 million kW a month, enough to power 24,000 households.
The 50 largest mining rigs of Kazakhstan put a load of 693 MW on the electrical grids, and the superfluous consumption growth attributed to unregistered mining rigs is 1,050 MW. As a result, in the first nine months of 2021, electricity consumption in the country has risen by 7.4%, and the government has been thinking about building new power plants.
Minister of Energy Magzum Mirzagaliev has stated that the country needs to build additional power plants with a total power output of 3,000 MW in the next 4–5 years to satisfy the growing demand. And to keep the system stable, it will need to put a limit of 100 MWh in place for new consumers.
Bitcoin’s price has already reached a new all-time high, while mining difficulty is still below levels seen in May. All this makes for increased mining profitability and high demand for electricity. The countries that can satisfy it will add revenue to their treasuries. In 2022, an additional tax of 1 tenge per 1 kWh will take effect for miners in Kazakhstan. According to estimates, this will add 5 billion tenges or $11.7 million to the country’s coffers.
The StormGain Analytical Group
(a platform for trading, exchanging and safeguarding cryptocurrencies)