A high-ranking official from the Russian Ministry of Energy said that there may be a twofold increase in the power consumption of the crypto-mining industry in the country this year.
The department has thrown its support behind a bill aimed at regulating the crypto-mining sector in Russia and it is expected that the legislation will be adopted in 2022, or the next year.
Energy consumption rising
Pavel Snikkars, the Deputy Energy Minister of Russia, said that the share of the crypto miners in the energy consumption of the country might reach 1.5% to 2% by the end of the year.
RBC, the business news portal, had organized a crypto conference, where the government official spoke. He disclosed that the number had stood at 1% in the previous year.
He also added that whether electrical power is available across the huge country would depend on how many users are interested in connecting to the grid in a specific location.
The deputy minister said that in certain regions of Russia, such as Murmansk, they are currently offering the crypto industry access to unused capacities for generating power.
Snikkars shed light on how such resources can be made available and it is related to the construction of new power plants.
It can take a long time to construct a power plant, almost a decade where nuclear stations are concerned.
As far as the decision to start building one is concerned, it is usually done when potential consumers in the area put in requests for it.
But, he also added that there are some projects that are not ready to launch yet, or at all, which means that they do not have fully loaded generating capacities.
The problems
In some places, there is also trouble in increasing consumption in some regions because there are individuals who are minting digital currencies.
These areas have low electricity rates, but the infrastructure there is not designed to handle the increased usage of power for mining cryptocurrencies, which is becoming a major problem.
He stated that measures should be taken by the energy industry for ensuring that other users can enjoy a reliable power supply and not have to face disruption because of others.
Regulation
Another topic that Pavel Snikkars discussed during the event was the efforts that have been made for regulating crypto mining in Russia as a business activity.
He stated that his department was in complete support of the draft legislation that had been submitted to the State Duma, the lower house of the Russian parliament, back in November.
The bill in question makes amendments to the existing law ‘On Digital Financial Assets’, but the Legal Department of the Duma has not given its approval as yet and the Central Bank of Russia has not reviewed it either.
Anatoly Aksakov, the head of the Financial Market Committee, also spoke at the forum and said that they believe the law would be passed by lawmakers by the end of 2022.
The statements from Aksakov and Snikkars come after a report showed that the last few months have seen the demand for crypto mining equipment rise in the country.
Not only has electricity consumption increased, but so has mining revenue in the last few years, before the crypto winter hit this year and Western sanctions slowed things down.