The Energy Secretary of Argentina eliminated power subsidies for cryptocurrency miners, raising the cost of energy to almost 4x what the miners were paying before. The measure affects customers of the wholesale power market in the Tierra del Fuego province, one of the provinces more notably occupied by miners in the country due to its specific climate characteristics.
Argentina eliminates subsidies for cryptocurrency mining
The Argentinian government has removed subsidies that applied to energy used by cryptocurrency miners. This is the decision that the country’s energy secretary has made regarding cryptocurrency mining, and according to the new resolution 40/2022, published and formalized on February 1, miners will now pay almost four times that they were paying before.
The new price of energy for miners in Ushuaia and the Rio Grande will be 5,000 ARS (or $47.50) per MW/H. Before this resolution was published, these same miners were paying around 1,764 ARS (or $16.76) per MW/h. The reason behind the change is explained in the resolution, which declares:
Due to the availability of payment and the profitability of the activity, it is considered appropriate that these users be faced with the payment of the price of energy equivalent to the cost of supply, being unfair that they pay the price of a residential or other user.
The resolution affects miners located in the Tierra del Fuego province, where most miners are located in Argentina due to the cold climate that allows the establishment of mining farms without intensive cooling capabilities.
Cammesa faces a challenge
Cammesa, which is Argentina’s energy wholesaler company, faces a challenge in trying to identify which sources are using the supplied energy for cryptocurrency mining purposes. During investigations last year, the company managed to identify two cryptocurrency mining facilities in the area. About the discovery, a source familiar with the matter told local newspaper La Nacion:
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.
Although 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 due to the low cost of energy which is approximately 70% subsidized by the State.
