In another setback for the global crypto industry, the Iranian government plans to cut the power supply to the country’s licensed crypto mining rigs by the beginning of July.
Rajabi Mashhadi, a spokesperson for Iran’s Ministry of Energy, said the supply of electricity will be limited. This will continue until the end of the period of restrictions. He cited the escalation of electricity consumption in Iran in the coming weeks. Iran has 118 authorized centers of Extraction Ramzars active in the country. These centers must cut off their electricity supply from the national grid from the beginning of July.
Iran saw a record of 62,500 megawatts peak, a significant jump, in electricity consumption last week. It predicted that consumption this week will exceed 63,000 MW – meaning a limit in electricity supply. The Ministry of Energy had a disappointing gain of 1.2 gigawatts to its power generation capacity in 2021. It was well below the projected gain of 3.5 GW. This led to a power use deficit.
It should be noted that Iran lacks the investment needed in power generation capacity and natural gas production to keep up with consumption due to international sanctions. Moreover, soaring demand is being driven by the country’s extremely low electricity prices. Average household electricity costs $0.005 per kilowatt-hour (kWh). This is a fraction of neighbor Iraq’s $0.024 per kWh and $0.159 per kWh in the US. The Iranian government spends over $60 billion annually in indirect subsidies to reduce electricity prices.
Iran, as per Cambridge University, accounted for 0.12% of the Bitcoin network’s hash rate. It was previously among the top 10 countries in the world in terms of BTC mining productivity.