Kazakhstan: Severe electricity shortages due to new crypto mining boom

Kazakhstan: Severe electricity shortages due to new crypto mining boom
Kazakhstan: Severe electricity shortages due to new crypto mining boom
Avatar of Harry Johnson
Written by Harry Johnson

Kazakhstan began to suffer from power shortages in the summer of 2021, immediately after the Chinese government officially outlawed cryptocurrency mining.

Kazakhstan’s Minister of Energy Magzum Myrzagaliev announced that the country’s government is studying potential locations for a new nuclear power plant because the rapid growth of Bitcoin mining has triggered severe electricity shortages in the Central Asian country.

The minister said that two locations are currently being considered for a thermal power station that could help close the capacity gap. As things stand, around 70% of the country’s plants run on coal.

According to the energy minister, the need to build a nuclear power plant is “clear”.

Kazakhstan is the world’s largest uranium miner and has considered building a nuclear plant for more than a decade.

Kazakhstan began to suffer from power shortages in the summer of 2021, immediately after the Chinese government officially outlawed cryptocurrency mining. Miners opted to bring their hardware to Kazakhstan, where electricity is cheap. This caused significant energy issues for Nur-Sultan, which was forced to buy electricity from Russia to fill the gap.

Cryptocurrency mining uses electricity and high-powered computers to solve computational math problems. The solutions are so complex that they are impossible to be solved by hand and would even be difficult for regular computers to successfully complete. Once a problem is solved, the computer owner is rewarded with a cryptocurrency coin, such as bitcoin.

“We have to understand that the construction of any plant, especially a nuclear power plant, is not a quick matter. On average, it takes up to 10 years,” Myrzagaliev explained. The government is now in talks with Russia’s Rosatom, which has experience building plants abroad, such as in China, India, and Belarus. Construction would also help Kazakhstan reach its goal of becoming carbon neutral by 2060.

Earlier this year, Kazakh President Kassym-Jomart Tokayev signed a law to force cryptocurrency miners to pay additional fees for their electricity. The surcharge of one Kazakhstani tenge ($0.0023) per kilowatt-hour will be added to any crypto mining operation.

About the author

Avatar of Harry Johnson

Harry Johnson

Harry Johnson has been the assignment editor for eTurboNews for mroe than 20 years. He lives in Honolulu, Hawaii, and is originally from Europe. He enjoys writing and covering the news.

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