Iran’s main electricity provider, the National Iranian Electricity Company (NIEC), is currently exporting electricity to other countries in anticipation of a decline in electricity consumption during the summer months. Aside from the effect of the current hot summer temperatures on electricity demand, the NIEC is also exporting electricity to countries that have started to mine cryptocurrencies. Iranian cryptocurrency mining has been a central topic among economists and political analysts due to the country’s ongoing nuclear negotiations with the P5+1, and the government’s willingness to try and control the industry through import and export restrictions.
The government of Iran has temporarily suspended electricity exports by long-distance power network operators due to heavy crypto mining and a hot summer.
The problem of ever-increasing electricity consumption in Iran has reached a new peak, forcing the country to stop exporting electricity.
Abuzer Salihi, CEO of Iran’s electricity distribution company Tevanir, announced on state television that it had cut its electricity exports to zero to avoid the country’s supply problems. He said the electricity supply of Afghanistan’s Herat province, which imports 70% of its electricity from Iran, has been completely cut off to meet domestic needs.
According to Tevanir, the daily demand for electricity is more than 65,000 megawatts, while generation is about 54,000 megawatts. Besides the summer heat, bitcoin (BTC) and cryptocurrency mining activities in a country known for its large electricity subsidies to local industries have been cited as one of the reasons for high electricity demand.
Iran legalized cryptocurrency mining in 2019 to license and regulate miners in the country. However, the country has also experienced an increase in unauthorized mining activities, with many unauthorized miners using the power grid to run energy-intensive mining equipment.
Iran’s first move this year was to fine cryptocurrency miners who use domestic energy.
This was followed by a ban on mining until the end of the summer months. The ban on cryptocurrency mining announced by President Hassan Rouhani in May will last until September to ensure access to electricity for domestic use. Rouhani also said that 85% of mining activities in Iran are unauthorized.
Related: A draft law in Iran could ban all cryptocurrencies mined abroad.
As a last resort to stop exporting electricity, the country has also asked all legal cryptocurrency miners to cease their activities. Eshaq Jahangiri, Iran’s first vice president under Hassan Rouhani, made the statement during a meeting with Energy Ministry officials. We will ensure that power supply is not interrupted at important and key locations, he said.
Meanwhile, Iran continues to crack down on illegal mining activities. Last month, authorities seized more than 7,000 pieces of mining equipment from a factory in the capital Tehran.
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