Iranian Power Plants to Auction Off Surplus Energy to Bitcoin Miners
Three power plants in Iran have been given the green light to provide their surplus energy to Bitcoin miners to ramp up their revenue and ease pressure on the national grid.
The head of Iran's Thermal Power Plant Holding Company (TPPH), Mohsen Tarztalab, announced the news yesterday, revealing that an auction will be held on the power plant's spare output.
"The necessary equipment has been installed in three power plants of Ramin, Neka, and Shahid Montazeri, and the auction documents will be uploaded on the SetadIran.ir website in the near future," Tarztalab told The Tehran Times.
As for why, Tarztalab explained that electricity price hikes and the need to provide stable rates have caused a gap between revenue and expenditure that needed to be patched. The resolution, offered by Iran's power plants, was to provide Bitcoin miners exclusive access to surplus energy.
Two Birds With One Stone
Iran is one of the latest countries to not only soften their stance on Bitcoin mining, but to actively embrace the industry. However, it wasn't just a lenient attitude propelling the move - the solution to sell surplus energy to miners came in a bid to counteract another problem.
In January, Iran's Ministry of Industry, Mine and Trade issued over 1,000 licenses to Bitcoin miners. The plan was to use mining revenue to bolster Iran's crippled economy and evade U.S. Sanctions; however, the move ended up putting an intense strain on Iran's power network.
"Cryptocurrency miners have put enormous pressure on the national power grid and the upward consumption trend has increased concerns among energy officials," an energy ministry spokesperson announced in June.
The Next Bitcoin Mining Hub?
While the use of surplus energy will go some way to quelling pressures on the national grid, it will also likely boost Iran's standing as a Bitcoin mining hub.
Mining firms tend to gravitate to Iran thanks to its economical power cost, which can reach as little as $0.01 per one kilowatt-hour (kWh) during low use periods.
In July - in yet another gambit to incentivize Bitcoin mining traffic - Iran licensed 14 mining farms, slashing their electricity bills by almost 50% during peak consumption periods. In the same month, the Iranian government authorized power plants to mine Bitcoin as well.
Per data from the University of Cambridge's Centre for Alternative Finance (CCAF), Iran accounts for as much as 3.82% of Bitcoin's global hash rate as of April this year. This places the country 6th, behind frontrunners China, the U.S., Russia, Kazakhstan, and Malaysia.
Global hash rate as of April 2020. Source: Cambridge Centre of Alternative Finance
Though, given the country's increased pace on Bitcoin mining reform and implementation, it is feasible that Iran's global hash rate ranks higher than estimated.