Cryptomining centers' access to the national power grid will be cut during the summer season as electricity consumption peaks.
Mostafa Rajabi Mashhadi, spokesman of the Iran Power Generation, Transmission and Distribution Company (Tavanir) said the move will help stabilize the grid during the hot summer months when household demand jumps, IRIBnews.ir quoted him as saying on Saturday.
Currently, 118 authorized cryptomining units operate in the country the official said putting their collective consumption at 200 megawatts.
Cryptominers are often blamed for power shortages in summer that fuel frustration across the board despite the fact that the share of legal miners in the total electricity consumption is meager.
In July 2019 the government accepted cryptomining as a legal industry and required miners to acquire license from the Ministry of Industries and pay their electricity bills based on export rates.
However, unauthorized farms have cropped up in recent years with increasing speed using subsidized electricity because they must pay much higher tariffs if they operate with a permit.
High consumption is not the only problem as the unregistered miners also damage the power distribution networks resulting in rolling blackouts in summer.
In the past years when the power situation worsened Tavanir started shutting illegal cryptomining centers to prevent shortages and safeguard the grid.
"Detected illegal miners have consumed 974 million kilowatts/ hours of power," Rajabi Mashhadi said without elaoration.
Most of the illicit crypto farms and centers are in Tehran Province, followed by Isfahan, Khorasan Razavi, Khuzestan, East Azerbaijan and Fars provinces.
As per law, Tavanir is responsible for finding and closing the illegal farms. When found the utility confiscates their equipment and cuts their electricity.
They also must pay for the damages they inflict on the power grid that has been struggling to meet rising demand, especially in the hot season.
Businesses and informed observers blame cumbersome rules for obtaining licenses along with the high electricity tariffs for the growth in underground cryptomining.
In 2020, the Energy Ministry revised regulations for cryptomining as per which 16,574 rials is charged for one kilowatt-hour. The tariff is halved when household consumption is low and the grid is not under pressure as usually is the case in summer.
Rates double during restrictions like when power plants do not receive enough gas as feedstock or the grid(s) are shut for annual maintenance or face technical problems.
The base tariff is four times the previous 4,800 rials for one kilowatt-hour. Electricity prices for cryptomining are set according to export tariffs and subject to currency rates at Nima -- the currency platform where forex is traded among importers and exporters.
