• Argentina has raised electricity tariffs for crypto miners, now set at 17,240 Argentine pesos per MWh.
• This rate is higher than that of commercial enterprises and puts crypto mining in the same energy price bracket as heavy industries.
• The rise could put pressure on miners as the rate is higher than when they lost access to subsidized electricity earlier this year.
Miners Under Pressure
Argentina has published a revised list of electricity rates which sets miners a new rate of 17,240 Argentine pesos (around $63.30) per megawatt-hour (MWh). This rate is significantly higher than the rates given to households which are heavily subsidized by up to 70%. Residential rates start at just under $11.30 per MWh. These revised rates come into effect on August 1 and will run until October 31st 2023 after which they may change again.
Crypto Mining in Argentina
Differentiated electricity rates for crypto miners are a relatively new phenomenon in Argentina and their onset has cause upheaval among miners who have been struggling with spiraling energy costs for over a year. In early 2021, the ministry removed miners’ access to subsidized electricity, sending power prices up from almost $17/MWh to close to $48/MWh – making them now face an even steeper increase with the new rise above $63/MWh potentially hindering local miner activities.
Government Definition of Mining
At the end of January 31, 2022, the Argentine government published an official definition of mining and announced a new mining policy noting that “the consumption of electricity by the cryptocurrency mining sector [is] characterized by its intensity and consistency, both hourly and seasonally” posing challenges to their existing grids infrastructure. Power companies have been trying to monitor crypto miners at a national level and have successfully shut down large-scale illegal crypto mining farms but admit smaller “home connection” miners are much harder to identify.
Impact on Miners
The increased cost of electricity may put pressure on local miners who will no longer be able to benefit from subsidies while having increased energy costs yet may still not be able to easily identify smaller-scale “home connection” miners operating more discreetly within their grid system.
The Ministry’s publication of revised electricity rates could potentially hinder local miner activities with an even steeper increase in energy costs putting extra pressure on those who operate within Argentina’s grid system while larger scale illegal operations face heightened monitoring from power companies attempting to curb their activities nationally .