Blackout Fears as Russia’s Dagestan Energy Provider Begs Crypto Miners to Turn off Rigs

The state-run power provider in the Russian republic of Dagestan has asked crypto miners to turn off their rigs this winter to avoid power outages and blackouts.

In a Telegram post politely addressed to operators of “mining farms,” Dagenergo asked miners in Dagestan to power down their rigs. The provider wrote:

“We kindly ask you to think about your loved ones and neighbors – Dagestanis like you. Please turn off mining [equipment]. [Mining rigs] can overload the electrical network and cause technological disruption.”

The firm added that “during the cold season,” a “particularly difficult situation” was now unfolding in “several parts of Makhachkala.”

Makhachkala, previously known as Port-Petrovsk, is the capital of Dagestan. It is home to around a million people.

Dagestan Battling with Crypto Mining Issues?

The provider claimed that its analysis of the “dynamics of the network load” showed “sharp rises in short periods.”

This, Dagenergo said, means the firm “can conclude that the load is caused by mining farms.”

The energy company said its “specialists” were “actively working to identify” the farms. It noted that it had “dismantled” 13 crypto mining centers in 2023.

However, Dagenergo conceded that the “development of mining technology” was now so advanced that “it is not always possible to identify them quickly.” The firm pleaded:

“Therefore, we kindly ask miners throughout Dagestan to turn off their [rigs], at least during cold weather periods. Electricity provides not only light, but also heat in the homes of our fellow countryfolk.”

The company said it “thanked” crypto miners for their “understanding” in the matter.

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Dagestan, a Russian republic in the North Caucasus region. (Source: Danloud [CC BY-SA 3.0])

In August last year, the Northern Caucasus branch of the Russian state-run power firm PAO Rosseti said it had shut down 36 “illegal” crypto mining farms in the Republic of Dagestan in 2022 and the first half of 2023.

Rosseti said the farm owners were using illegal grid connections and incurred “total damages” worth 157.95 million rubles (currently around $1.8 million).

One of the largest farms, a 1MW center, was discovered in Kaspiysk, the power firm said. Rosseti wrote:

“This level of power usage is comparable to the electricity supply of a residential complex with 300 apartments.”

Illegal crypto mining has also caused years of energy-related misery in the de facto South Caucasian republic of Abkhazia.

Local government bodies have recreantly begun carrying out unannounced raids on industrial facilities and private households as they crack down on illegal crypto miners.