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Abkhazia Mining Rig Seizure Fails to Stop Mining




  • In Business
  • 2021-09-26 13:30:00Z
  • By BeInCrypto
 

BeInCrypto -

Electrical distribution woes cause Abkhazia officials to go on the offensive and shut down power-hungry mining farms, and seize mining equipment.

Abkhazia Electricity Woes Amplified By Crypto Mining

In an effort to improve income, many individuals in the self-governing territory of Abkhazia have turned to crypto mining to mint new coins. However, the increase in the use of mining rigs has put pressure on the power grid. Cryptocurrency mining rigs can cause an increase in power consumption of 60-90MW, partially contributing to the total annual consumption of two billion kWh per year, which is 10 to 15% more than what should be consumed, according to Levan Melbonia, chairman of the board of directors at the Inguri power plant, located on the border between Georgia and Abkhazia. Both Georgia and Abkhazia share the power generated by the Inguri hydro-electric power plant in 60%-40% split, following an informal 1997 agreement.

The price of electricity has been low in Abkhazia for many years, with 0.4 Rubles per 1 kWh the most recent publicized tariff for households, leading to an influx of foreign miners into the region, especially from nearby Russia. The region of Abkhazia does not pay for generation, only for distribution, according to the chairman of the board of directors at the plant.

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