Iran is currently grappling with frequent electrical outages due to the intense summer heat and a significant shortfall in power generation. A high-ranking official from Tavanir, the national electricity company, recently stated that digital currency creation, often called crypto mining, is responsible for a considerable portion, between 15 and 20 percent, of the nation’s existing power scarcity. This information was released on July 29th.
According to the Tavanir representative, Mohammad Allahdad, the energy consumed by crypto mining operations within the country is nearing 2,000 megawatts. This is the energy equivalent to the entire electricity output generated by two reactors at the Bushehr nuclear power facility, one of Iran’s major energy-producing atomic centers.
While the contribution of crypto mining to the overall electricity usage in Iran is around 5%, Allahdad described its impact on the power deficit as “substantial and concerning.” He cautioned that these mining activities pose a risk of triggering voltage fluctuations, blown fuses, and even potential fire hazards. He stated, “Devices used for crypto mining generate a lot of heat. We have received numerous reports from fire departments regarding fires that started from mining equipment, with some spreading to nearby residences.” Allahdad explained.
Crypto Mining During Iran’s Summer Exacerbates Power Issues
The strain on the electricity network has intensified as Iran endures one of the hottest summers in recent memory. Record-high demand from air conditioning, agriculture, and industrial sectors has pushed the nation’s electricity usage to over 70,000 megawatts. Widespread blackouts and service interruptions have become commonplace, causing significant discontent among the public. Allahdad commented, “Utilizing electricity for crypto mining during periods of peak demand is not only against the law and ethically wrong, but it is also detrimental to the overall system.”
A recent nationwide internet disruption, which authorities attributed to the tensions with Israel, shed light on the scale of unlawful mining operations. It was reported that during the outage, power consumption saw a drop of approximately 2,400 MW. Tavanir attributed this significant decrease to the abrupt cessation of over 900,000 unauthorized mining devices.
Illegal Crypto Mining Now Considered National Security Threat
Government officials report that illicit mining farms often operate out of deserted homes, vacant commercial spaces, and industrial sites. Locating these clandestine operations is proving to be a challenge, particularly within large industrial zones, as pointed out by Allahdad. He emphasized that tips from the public have been vital in locating these illegal setups. Tavanir is offering rewards of up to 200 million tomans (around $2,300 USD) for information that helps to shut down these operations.
The clampdown on cryptocurrency mining in Iran has intensified since the previous year. Authorities have confiscated over 240,000 mining machines across various provinces, including Tehran, Isfahan, and Kerman, during operations in March.
Mostafa Rajabi Mashhadi, the CEO of Tavanir, emphasized that Iran offers some of the most heavily subsidized electricity rates globally. He asserted, “With energy consumption reaching unprecedented levels, we cannot overlook this issue. Every illegal miner disconnected from the grid frees up energy that can be used by our citizens.”
The statements made by Tavanir’s leadership come at a time when the energy sector is struggling to balance rising domestic energy requirements with the destabilizing influence of unauthorized crypto mining. This problem was further complicated after recent conflict between Iran and Israel, resulting in a cyberattack on Nobitex, Iran’s largest cryptocurrency exchange. These infrastructure attacks and subsequent supply disruptions have further highlighted the fragility of the network and amplified the stress caused by illicit crypto mining operations throughout the country.
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