Argentina’s Energy Secretary eliminated power subsidies for cryptocurrency miners, raising the cost of energy to nearly four times what miners were paying previously. The measure affects wholesale power market customers in Tierra del Fuego, one of the provinces with the highest concentration of miners in the country due to its unique climate.
Argentina discontinues cryptocurrency mining subsidies.
Argentina’s government has eliminated subsidies for power used by cryptocurrency miners. This is the decision made by the country’s Energy Secretary regarding cryptocurrency mining, and according to the new 40/2022 resolution, which was published and made official on February 1st, miners will now pay nearly four times what they did previously.
Energy costs 5,000 ARS (or $47.50) per MW/H for miners in Ushuaia and the Rio Grande. Prior to the publication of this resolution, these same miners were paying around 1,764 ARS (or $16.76) per MW/h. The reason for the change is stated in the resolution, which states:
Due to the availability of payment and the profitability of the activity, it is considered opportune that these users face the payment of the price of energy equivalent to the cost of supply, being inequitable that they pay the price of a residential user or another.
The resolution affects miners in Tierra del Fuego province, where the majority of miners in Argentina are located due to the cold climate that allows the establishment of mining farms without intensive cooling capabilities.
Cammesa is up against a challenge.
Cammesa, Argentina’s energy wholesaler, is having difficulty determining which sources are using the energy supplied for cryptocurrency mining. During last year’s investigations, the company discovered two cryptocurrency mining facilities in the area. A source familiar with the situation told local newspaper La Nacion about this discovery:
Monitoring is being done at the national level. These are the first that we detect with relevant power. Those that use a home connection are much smaller and very difficult to identify.
While there is no official data on the subject, local energy companies all seem to agree on one thing: more and more people and businesses are mining cryptocurrencies because of the low cost of energy, which is subsidized by the state at approximately 70%.
National monitoring is being conducted to detect the mining source of power consumption. Cammesa, an Argentine wholesaler, has been tasked with determining which sources are using the energy supplied for cryptocurrency mining. During its investigations last year, the company discovered two cryptocurrency mining facilities in the area. Miners who use a home connection are rare and difficult to identify.
Local energy companies agreed that people are increasingly mining cryptocurrency due to Argentina’s low energy costs, which are subsidized by the state to the tune of 70%.