Country turns to nuclear as crypto mining causes electricity shortage

Authorities in Kazakhstan are considering building a nuclear power plant following the rapid growth of cryptocurrency mining, which has seen the Central Asian country suffer from serious electricity shortages.

Speaking on Tuesday, Minister of Energy Magzum Myrzagaliev revealed that the government is currently considering two locations for a thermal power station that could help close the capacity gap. As things stand, around 70% of the country’s plants run on coal.

Kazakhstan is the world’s largest uranium miner and has considered building a nuclear plant for more than a decade.

The country began to suffer from power shortages in the summer of 2021, immediately after the Chinese government officially outlawed cryptocurrency mining. Miners opted to bring their hardware to Kazakhstan, where electricity is cheap. This caused significant energy issues for Nur-Sultan, which was forced to buy electricity from Russia to fill the gap.

Cryptocurrency mining uses electricity and high-powered computers to solve computational math problems. The solutions are so complex that they are impossible to be solved by hand and would even be difficult for regular computers to successfully complete. Once a problem is solved, the computer owner is rewarded with a cryptocurrency coin, such as bitcoin.

According to the energy minister, the need to build a nuclear power plant is “clear”.

“We have to understand that the construction of any plant, especially a nuclear power plant, is not a quick matter. On average, it takes up to 10 years,” Myrzagaliev explained, according to TASS. The government is now in talks with Russia’s Rosatom, which has experience building plants abroad, such as in China, India, and Belarus. Construction would also help Kazakhstan reach its goal of becoming carbon neutral by 2060.

Earlier this year, Kazakh President Kassym-Jomart Tokayev signed a law to force cryptocurrency miners to pay additional fees for their electricity. The surcharge of one Kazakhstani tenge ($0.0023) per kilowatt-hour will be added to any crypto mining operation.

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