3 cents per kWh – Central Asia’s cheap electricity attracts Chinese Bitcoin miners

When tensions between the USA and Iran escalated in recent months, it was reported that Chinese miners wanted to settle in Central Asia and especially in Kazakhstan and Uzbekistan.

Last spring, Chinese Bitcoin miners in the oil-rich country poured into Iran at extremely low electricity prices ($0.006 per kilowatt hour). However, an alternative not so far away was found in Central Asia. Regional reports have revealed that Chinese Bitcoin Miners are considering migrating to Central Asia to take advantage of the low electricity prices there.

In April last year, some Chinese miners moved to Iran to take advantage of electricity prices of $0.006 per kilowatt-hour, but the Iranian authorities resisted. Although the Iranian leadership has legalised mining in the country, they also said that the miners must pay the export price for electricity consumption.

In November, officials from the Iranian power grid said that the cost of electricity to the miners would fluctuate. Prices can fluctuate between $0.04 per kWh (9,650 rials) and $0.16 per kWh during certain months. However, in Central Asia, electricity prices resulting from an abundance of gas and coal-fired power plants mean that Bitcoin Miners can operate for $0.03 per kWh or less in countries such as Kazakhstan and Uzbekistan. Columnist Lylian Teng discussed the issue with a Chinese miner, Wu Zheng, who describes that Chinese miners are attracted by prices in Central Asia.

Wu explained that Chinese miners are sending older models like the S9, E10 and M3 to regions where electricity costs are significantly lower.

“My mining farm (in Kazakhstan) uses Ebit E10 machines that deliver a hash rate of 18T at 1800W power consumption,”

Wu explained.

 

The miner also revealed that electricity prices in Kazakhstan can be as high as $0.001 per kWh if the miner can be connected to a powerful coal-fired power plant.

 

” In Kazakhstan, coal-fired electricity costs only $0.001 per kilowatt-hour because of the abundance of coal there, private electricity generation is allowed in the country, and the electricity we consume comes from a private power plant.”

noted Wu.

 

Because the Bitcoin Difficulty has increased significantly, older miners are making less profit. The miners are increasingly replacing old machines like Bitmain’s Antminer S7 and S9 with newer models, said Jason Wu, co-founder of Definer. Chinese miner Wu Zheng emphasized, however, that favorable electricity prices in Central Asia are making older machines profitable again.

Last September, author Ana Alexandre spoke to Alan Dorjiyev, head of the Blockchain & Data Center Industry Development Association in Kazakhstan, about Bitcoin miners from China that may be moving to the region.

 

Uzbekistan is generally positive about mining,” Dorjiyev told Alexandre.

“However, the mining industry is centralized in a single controlling body. It causes a lot of corruption when the government agency decides which miner to give electricity to. The only challenge at the moment is to build a low-voltage infrastructure so that the miners can be connected to the grid more easily,”

continues Dorjiyev.

 

“The miners are currently investing in the electrical infrastructure to reduce the voltage from 110kv to 0.4kv.”

 

Dorjiyev also noted that Kyrgyzstan is an attractive country for Bitcoin mining. In addition, Uzbek President Shavkat Mirziyoyev set up a fund on September 2, which is dedicated to the development of the government’s Blockchain. The Uzbek leadership has allowed Bitcoin mining and trade and has created extremely lenient tax laws in the country, which also allow crypto payments. Despite cheap electricity and crypto-friendly states, Central Asia has a long, controversial history with China.

When the Soviet Union controlled Central Asia, the borders were closed, and only recently Chinese migrant workers migrated to the area to work. Citizens from Kazakhstan, Kyrgyzstan and Tajikistan were angry and protested when China renegotiated the post-Soviet borders. The conflicts in this matter have been raging for years and could lead mining companies to reconsider settling in these countries.