An electricity executive in Kyrgyzstan has been detained after he illegally connected a home cryptocurrency mining farm to the national grid, ignoring a power deficit in the Central Asian nation, security services said.
With their cheap electricity, Central Asian countries have become popular destinations for cryptocurrency miners, but the power-hungry operations have burdened ageing grids.
Kyrgyzstan’s state committee said a man arrested on suspicion of “organising a mining firm to obtain cryptocurrencies” was head of a provincial power station close to the lakeside resort town of Cholpon-Ata.
“Using his official position, he stole electricity, dealing a blow to Kyrgyzstan’s energy security,” the statement said.
The committee had said in July that it was shutting down cryptocurrency mines in accordance with the national grid’s decision to withhold authorisation for cryptocurrency miners in 2019.
Mines “continue to operate underground even when there is a shortage of electricity for the entire population of the country”, the committee complained at the time.
Resource-poor, mountainous Kyrgyzstan relies on a single hydroelectric plant in Jalal-Abad province to power the national grid and has gone into winter on the back of its worst drought in more than a decade.
China Ban Affects Kazakhstan
The country’s energy-rich neighbour Kazakhstan has also complained of electricity shortages after cryptocurrency mining boomed due to high prices for bitcoin and a ban on the practice in China – once the world’s largest producer – that saw some companies shift equipment ‘next door’.
Kyrgyzstan this year signed deals to import electricity from Kazakhstan, Turkmenistan and Uzbekistan, but the country has been unable to pay for the power.
Now all three of those countries recently stopped sending electricity.
A severe drought has also badly hurt the primary domestic source of energy for Kyrgyzstan, which is hydropower.
Kyrgyzstan will allow some water through its massive Toktogul hydropower plant but although the water is in a Kyrgyz reservoir, Uzbekistan and Kazakhstan also depend on the supply.
When it was a constituent republic of the Soviet Union, Kyrgyzstan was a main hub for uranium mining.
The country has never established a nuclear power capability although it is still dealing with the legacy of nuclear waste from uranium processing.
“Although Kyrgyzstan has not expressed its plans to construct a nuclear power plant or develop nuclear energy, uranium mining became a point of contention,” Aliya Tskhay, a Kyrgyz academic at the University of St Andrews in Scotland, said.
- AFP with additional editing by George Russell