Widespread blackouts threaten economy, disrupt life in Iran
The government of President Hassan Rouhani appears to blame an increase in illegal cryptocurrency mining as a major contributor to the electricity shortage that has led to extensive blackouts, especially in major cities.
The Energy Minister, at a cabinet meeting chaired by the President on Sunday, urged the Ministry of Intelligence, Justice and Economic Security Police to help identify illegal cryptocurrency miners as a crucial step in combating the summer peak in electricity consumption. The minister’s report said electricity consumption increased by 20% in the past two months compared to the same period last year due to various factors, including crypto-mining.
A recent study from blockchain analytics firm Elliptic quoted by Reuters As of May 21, Iran is responsible for about 4.5% of the world’s energy-intensive bitcoin mining, or nearly $ 1 billion annually.
Iran used bitcoin – and other cryptocurrencies not included in the study – to pay for imports without the United States being able to identify and sanction the supplier. The elliptical estimates are based on data collected from bitcoin miners by the Cambridge Center for Alternative Finance through April 2020, and on statements by the Iranian national power generation company in January that up to 600 MW of electricity were consumed by the miners.
Outages for which schedules have been announced – but not implemented in some cases in recent days – are disrupting people’s day-to-day activities and activities. “Blackout means parking gates and security roller shutters that won’t open, food in the freezer that’s wasted, dangers [to lives of] patients in hospitals and at home, people trapped in elevators, going up and down stairs [in multi-storied] buildings to open the door, the water does not rise [in the pipes to upper] stories. It means the misery of the people, it means double suffering, “said a tweet from May 23. On Sunday, in the town of Tabriz, in the north-west of the country, only the firefighters had to rescue 100 people trapped in elevators in residential and commercial buildings, the Mehr news agency reported.
Conspiracy theories on the role of Revolutionary Guards (IRGCs) in cryptocurrency mining and power outages can be easily found on social media, and many people blame the Chinese. “Logically, the reason for the blackouts is bitcoin mining in cooperation with the Chinese. What happens to the money? Much of it is used to fund Hamas and Hezbollah missiles,” a tweet on Sunday said while another Twitter user said the shortage could be overcome if “the Revolutionary Guard’s bitcoin farms are dismantled.”
Iran is subsidizing electricity, which is even cheaper in special economic zones where many Chinese entities involved in crypto-mining have established themselves. Government officials also blamed the unusually warm spring climate and lack of rain for the shortage of power generation. The cabinet was informed on Sunday that the capacity of dams to generate electricity fell by 57% between March 2020 and March 2021 compared to 2019-20.
Southwestern Electricity Industries official Kiyumars Zamani said on Sunday that situations were critical in the province and high consumption levels could trigger power plant security systems to shut them down, leading to extensive blackouts.
Such blackouts could seriously damage the economy of Khuzestan province, which includes the Imam Khomeini port and is a center of oil and petrochemical production. Zamani said some of the problems were caused by delays in repairs to power plants.
Domestic consumption in the southern provinces, including Khuzestan, normally increases significantly at this time of year due to air conditioning. Temperatures have now exceeded 40 ° C (100 ° F) and are expected to rise further in the coming days.