Buryatia's Thermal Power Plant Set to Boost Energy Supply for Bitcoin Mining Operations

Buryatia's Thermal Power Plant Set to Boost Energy Supply for Bitcoin Mining Operations

The Russian region of Buryatia is preparing to enhance its energy capabilities with a new thermal power plant scheduled to begin operations before the end of 2029. This upgrade aims to provide both electricity and heat, addressing the increasing demands on the power grid attributed to the rising popularity of Bitcoin mining in the area.

According to the state-run news agency TASS, the revamped plant will help Buryatia establish a power reserve, particularly benefiting Ulan-Ude, the region's capital, which has experienced a surge in energy consumption. The local government has acknowledged that the spike in cryptocurrency mining activities has strained the existing power infrastructure, with President Vladimir Putin noting the impact of Bitcoin mining on the local power supply.

Currently, Buryatia relies on the Gusinoozerskaya Thermal Power Plant, which was constructed during the Soviet era and completed in the late 1970s. This plant has faced challenges, including a transformer failure and a fire in June 2022 that resulted in power outages for several days. In light of these issues, the local government plans to add two more power units at Gusinoozerskaya to create an additional reserve of electricity.

Yevgeny Lukovnikov, the Deputy Chairman of the Buryatia Local Government, expressed confidence in the new plant's capacity, claiming it would provide 300 MW of power to neighboring Mongolia. The local power provider is reportedly investing over $418 million in the modernization project, which dates back to the late Soviet era when initial construction efforts began in the 1980s. Despite a steam boiler being brought online in 1991, the project has remained incomplete, although this boiler still accounts for 30% of Ulan-Ude's heating capacity.

The TASS report highlighted that the rise of crypto mining in Irkutsk has partially contributed to energy deficits in the region, affecting the reliability of power supply in Buryatia. The Russian Ministry of Energy has identified various power supply issues linked to the expansion of mining activities, particularly in the Irkutsk-Cheremkhovo district and southern Buryatia.

Putin has expressed concerns about the potential consequences of mining on local enterprises and essential services. Despite Buryatia's status as a Bitcoin mining hotspot, Lukovnikov indicated that most mining operations in the region are illegal, with only two recognized enterprises engaged in crypto mining under regulated power consumption limits.

In response to the growing mining industry, the Irkutsk government has implemented crackdowns on illegal operations while attempting to attract legal miners to the region. The Russian government is also poised to introduce taxes on industrial cryptocurrency mining, a move that some analysts believe could enable Russia to establish Bitcoin reserves for international trade.

Experts in the Russian crypto sector estimate that over 90% of mining efforts within the country are focused on Bitcoin. As Buryatia prepares to enhance its energy infrastructure, the region aims to balance the demands of the mining industry with the need for reliable power supply to local communities.