Abkhazia Cuts Power to 15 Crypto Mining Plants

In a governmental effort to limit electricity consumption, the Republic of Abkhazia has cut power to 15 cryptocurrency mining farms.

The Republic of Abkhazia state electric utility Chernomorenergo has cut power to 15 cryptocurrency mining plants due to energy consumption concerns. The announcement was made in a Facebook post on 31 December 2018.

The announcement stated the decision was part of a series of temporary governmental measures to “limit the consumption of electricity by certain categories of subscribers”. The 15 facilities affected by the discontinuance have a total consumption capacity of 8,950 kilowatt-hours (kWh), roughly equivalent to the electricity consumption of 1,800 Abkhazian households. According to Chernomorenergo, the owners of the mining plants were cooperative and understood the decision.

The Republic of Abkhazia is located in a small strip of land between Georgia and Russia, on the Black Sea coast, and was stripped from Georgia in the Russia-Georgia war of 2008. Although the republic remains unrecognized by the majority of UN members, it has been supported historically by Russia and has a population of around 240,000 people.

The high electricity demands of Bitcoin and other crypto mining have raised concerns worldwide over the sustainability of such operations. Abkhazia joins a growing list of jurisdictions that have limited or regulated cryptocurrency mining activities due to their high energy consumption. In November, Norway ceased subsidising Bitcoin (BTC) mining facilities. Lars Haltbrekken, parliamentary representative for the Socialist Left Party (SV), was quoted at the time stating “Norway cannot continue to provide huge tax incentives for the most dirty form of cryptocurrency output [...] [BTC] requires tons of energy and generates large greenhouse gas emissions globally.” Norway’s decision resulted in the immediate closure of a $116 million mining operation.

In contrast, some mining operations have turned to Iceland as a potential solution to the energy demands of Bitcoin mining. With over 80% of its energy produced by renewable sources such as hydroelectric power stations and natural cooling due to the cold Arctic climate, the island nation has become home to numerous new operations, with some experts expressing concerns crypto mining demands are on a path to exceed the modest local non-crypto energy consumption.

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