Authorities in Abkhazia have cut off 15 mining facilities from the territory’s electrical grid. The short-term measure is meant to alleviate power shortages during the cold winter months. The operators of the farms have fully cooperated with the local electric utility.

Also read: Two Mining Companies Among Georgia’s Major Electricity Consumers

8,950 kWt of Mining Hardware Unplugged

Chernomorenergo, the state-owned company responsible for the electricity distribution in the breakaway republic, said it disconnected all mining farms it managed to locate. The utility announced on its Facebook page that the shut down facilities had a total power capacity of 8,950 kWt. Their consumption is equal to that of 1,800 households, or the administrative region around Abkhazia’s capital, Sukhumi.

The move follows a decision by the government of the partially recognized entity in northwestern Georgia to temporarily halt cryptocurrency mining with locally produced electricity. The Abkhazian authorities explained the measure, which was approved at the end of last year, was necessary to guarantee the electricity supply for homes, social institutions and important production facilities.

The country’s electric power system has been over stressed by rising consumption due to the low winter temperatures. Chernomorenergo said the miners have complied with the recently issued government decree to limit their consumption. In summer months, however, the bitcoin farms help utilize excess electrical energy produced by a large hydro-power complex located on the de facto border and shared with Georgia.

Abkhazia Temporarily Shuts Down 15 Mining Farms
The Enguri hydroelectric power station.

The Enguri hydroelectric station, along with the smaller Vardnili plant, satisfies most of Abkhazia’s needs for electricity. According to an analysis published by The Financial last year, the total electricity consumption of Georgia reached 1,116 million kWh in March 2018. Around 19 percent of the electrical energy, or 207 million kWh, was consumed by Abkhazia.

Emerging Mining Destination

Much like neighboring Georgia and other countries in the Transcaucasian region such as Armenia, Abkhazia has seen a rapid development of the cryptocurrency mining industry. That’s largely due to the lack of strict regulations and the low operating costs, including cheap electricity which is a major expense in the energy-intensive process of minting digital coins.

The executive power in Sukhumi has recognized the need to regulate the activities of a growing number of mining businesses. The president of Abkhazia, Raul Khajimba, recently scheduled a government meeting to discuss the drafting of a new law that is expected to legalize the sector and place it under state oversight.

Cryptocurrency miners in Abkhazia have so far played a positive role. Their farms are often located on the premises of abandoned factories from Soviet times. Like several other countries and entities in the post-Soviet space such as Transnistria, for example, the self-proclaimed republic now has a chance to attract fresh foreign investments and increase its budget receipts by inviting more miners and other crypto companies.

Do you expect Abkhazia to become a crypto mining destination like other countries in the Transcaucasian region? Tell us in the comments section below.

Images courtesy of Shutterstock, Chernomorenergo.

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