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Russian electricity distribution companies have begun to recognize improvised mining farm in residential buildings as a result of rising energy consumption and higher loads at substations. This was revealed by Pavel Snikkars, Deputy Ministry of Energy.

The government official stated to that authorities are looking into the cases of ‘illegal miners’. Although crypto mining is not yet regulated, such activities are not prohibited at the moment. However, utilities can show in courts that they are not using electricity for domestic purposes.

According to lawyers interviewed by the newspaper, at least 10 cases have so far seen home-miners being obliged to pay the difference between the preferential rates for the general public and the higher rates businesses must pay.

Snikkars explained that utilities will send an inspector to inspect power consumption and issue a new invoice. This is based on commercial electricity prices. They could eventually prove their claims in court.

Irkutskenergosbyt was the first to address the issue in 2021. He is the electricity distributor in the energy-rich region Irkutsk, which has been called the “mining capital of Russia”. A report from August this year shows that crypto miners in Siberian Oblast have already paid almost $1.7 million in fines (or 100 million rubles) in penalties. Rural rates in Siberian districts start at $0.01 per kWh.

Home Crypto Mining is blamed for some problems with electricity supplies in certain regions

Last week, Pavel Snikkars revealed that Russia anticipates a significant increase in cryptocurrency miners’ share in its total electrical power consumption. He stressed that at-home mining can be a problem in areas where the infrastructure cannot handle the load. Therefore, energy companies have taken steps to ensure reliable supply for all users.

According to Oleg Ogienko (director for government relations at Bitriver), one of Russia’s largest miner farms, Russian crypto mining requires approximately 1.7 GW electricity. Between 50 and 60% of this is used in the industrial segment.

The Russian government is looking to legalize and regulate mining to capitalize on the country’s unique competitive advantages in the sector, such as its cheap energy resources and mild climate.

A group of lawmakers filed a bill in November with the lower house. It was designed to regulate the production of digital currencies such as bitcoin by amending the existing law “On Digital Financial Assets”. The Bank of Russia backed the legislation and it is expected that it will be approved by the end of this year.