Russian Bitcoin Mining Hub of Buryatia Set for Energy Upgrade

Buryatia, a notable Bitcoin mining hotspot in Russia, is poised to enhance its energy infrastructure with the introduction of a revamped thermal power plant scheduled to come online before the end of 2029. According to the state-run news agency TASS, this new facility will generate both electricity and heat, helping the region to establish a power reserve to accommodate the growing energy demands of Ulan-Ude, the capital of Buryatia.

Rising Energy Demands and Mining Impact

The local government has attributed the increasing load on the power grid to a surge in cryptocurrency mining activities. President Vladimir Putin has acknowledged the strain that Bitcoin mining has placed on the region’s energy resources. Currently, Buryatia relies on the Gusinoozerskaya Thermal Power Plant, a Soviet-era facility built in the late 1970s. This plant has faced challenges, including a transformer failure and fire in June 2022, which led to several days of power outages.

Confident in the upcoming plant's potential, the Buryatia government has claimed it will be capable of supplying 300 MW of power to neighboring Mongolia. The local power provider is reportedly investing over $418 million in this modernization project.

A Long-Delayed Project

The plans for the “TPP-2” station date back to the Soviet era, with project work initiated in the 1980s. Although a steam boiler was brought online in 1991, the project has remained incomplete, with this boiler currently supplying about 30% of Ulan-Ude’s heating capacity.

Miners and Energy Challenges

TASS noted that cryptocurrency miners in nearby Irkutsk have contributed to the region's energy deficit, complicating the reliability of power supply in Buryatia. The Russian Ministry of Energy has reported similar issues in Irkutsk, which has traditionally been a prominent Bitcoin mining area.

Putin has voiced concerns that mining activities could have serious consequences for local enterprises and communal services. Yevgeny Lukovnikov, the Deputy Chairman of the Buryatia Local Government, indicated that most Bitcoin mining operations in the region are illegal, stating that only two enterprises are authorized for such activities, with their power consumption carefully regulated.

A Complex Relationship with Miners

Despite his remarks about illegal operations, Buryatia, similar to Irkutsk, has adopted a nuanced stance toward miners. While Irkutsk's government has attempted to rein in mining activities, it has also sought to attract miners to the region.

In a broader context, Moscow plans to implement taxes on industrial crypto mining, which some believe could enable Russia to create Bitcoin reserves for international trade with foreign firms. This initiative has prompted various regions, previously overlooked by miners, to announce ambitious projects for state-of-the-art data centers.

Russian crypto experts estimate that over 90% of the nation’s miners focus primarily on Bitcoin, underscoring the cryptocurrency's significance within the country’s digital economy.