The Energy Ministry Wednesday published new regulations guiding cryptomining work. Miners will be charged 16,574 rials for one kilowatt-hour of electricity, the ministry website reported.
It said the base rate will be cut by half when household consumption is low and the national grid is not under pressure as usually is the case in the summer months.
The base rate, however, is four times higher than previous 4,800 rial for one kilowatt-hour. Electricity prices are set based on power export tariffs based on currency parity rates at Nima -- a currency platform were foreign currency is traded among importers and exporters. Base rates will be updated at three- month intervals and subject to forex rates.
Rates will double during restrictions like when power plants do not receive enough gas as feedstock or the national grid struggles to meet household demand.
Miners will be cut off from the national power grid when utilities are in critical conditions and consumption peaks leading to power shortages and outages.
In July 2019 the government said it would accept cryptomining as a legal industry. The move was first welcomed by the miners but soon they started complaining about high power tariffs and took their business underground.
According to Mostafa Rajabi Mashhadi, spokesman for the Iran Power Generation, Distribution and Transmission Company (Tavanir), 24 crypto mining units using 310 MW have permits from the Ministry of Industries, Mining and Trade.
The steep rise in the price of cryptocurrencies in recent months apparently has made mining more tempting for miners in Iran and other countries. Tavanir reportedly identified and shut 1,100 unlicensed crypto mining farms in the past several weeks.
Back in January, rising home gas consumption disrupted gas feedstock to power plants forcing utilities to switch to dirty fuel like mazut, a highly polluting and low quality fuel oil.
That caused unprecedented air pollution in big cities and rolling blackouts, including in Tehran. Tavanir said the power outages in the capital was due to cuts in feedstock deliveries to power stations. It blamed cryptomining as one of the reasons that led to the power shortages unseen in recent memory.
Experts say the government approach to cryptomining is biased against private enterprise. They propose alternative solutions for crypto farms and meeting high power demand in peak seasons, such as a framework for selling extra output from power plants in the secondary market where prices are the function of supply and demand.
Other Options
Meanwhile, the new regulations offer miners alternative options, other than the national electricity grid, for feeding cryptocurrency farms. Miners not interested in buying power from Tavanir can set up their own renewable power plants, invest in government optimization plans or set up small-sized thermal power plants.
"Those who set up renewable power plants can use their output," the ministry said noting that miners can sell their excess power to the government. If they need more power they can purchase it from the government at the base rate.
Cryptominers can invest in Tavanir and the Energy Ministry's innovative plans to help raise efficiency of electricity consumption. Investors would be fed power equal to the amount that is saved through the implementation of the optimization plan.
Tavanir had earlier offered an incentive to legal mining units. To be eligible for the incentives, miners were required to take part or invest in Tavanir's efficiency programs to replace one million old (gas-powered) air conditioners with energy-efficient ACs.
Back then, Tavanir said participating in the project could help cut up to 47% of electricity tariff for miners during peak times.
Iran's installed power capacity is 84,000 megawatts of which 840 MW is from renewable sources including solar, wind, small-scale hydroelectric and waste-to-energy power plants and biomass.
There are more than 115 large solar farms in Iran and 3,500 smaller installations in assorted urban and rural areas. Over 2,500 rooftop photovoltaic power units are to be set up in remote and deprived rural areas.
