The Georgian separatist region of Abkhazia fears that the work of mining enterprises might jeopardize the republic’s energy system in the high season of winter.

Too many miners

The State Energy Company of Abkhazia calls on the authorities of the partly recognized republic to develop industry regulation in order to avoid a power shortage in the upcoming winter. According to Chernomorenergo, crypto farms in Abkhazia most often located in abandoned factories of the Soviet era consume significant amounts of electricity. Chernomorenergo fears that the fragile energy system of the republic may not cope with peak loads.

“We have the so-called mining farms, set up on the premises of abandoned or partly abandoned factories. This puts additional load on our grid, the transmission lines and substations that are loaded to capacity even without it. If temperatures fall, there is a risk that electricity will not reach regular customers,” said Aslan Basaria, head of Chernomorenergo.

Chernomorenergo forecasts high risks of power outages during the peak consumption season due to cryptocurrency mining operations. Currently, most of the electricity consumed in Abkhazia comes from the Ingurges hydroelectric complex, which Abkhazia shares with Georgia. But the water level always falls in winter, while the level of consumption, on the contrary, increases. Taking into account the existing mining farms, the situation can get out of control and lead to massive outages.

Crypto winter

2018 was a real challenge for miners. After the encouraging growth in 2017, they faced a sharp increase in network complexity due to the emergence of new miners, and then, with a sharp decline in the price of cryptocurrency, their income fell almost to zero. By the end of this year, the number of mining enterprises began to decline. Bitcoin's hashrate fell by 31% since the beginning of November, BitMEX analysts found out.

The reason for shutting down mining farms is crypto miners' massive losses. According to BitMEX, the mining industry’s revenues fell from $13 million per day in early November to $6 million per day at the beginning of December.