ISLAMABAD: Pakistan is working on special electricity tariffs to attract crypto mining and blockchain-based data centres, aiming to utilise surplus power at marginal costs while fostering growth in the digital asset industry.
Sources told Dawn that the power division had been consulting various stakeholders to develop an attractive electricity tariff for emerging industries and sectors without involving any subsidy that could help absorb surplus power and somehow reduce capacity payments.
Some estimates suggest that bitcoin miners at present spend up to 60-70 per cent of their total earnings on electricity costs. This places Pakistan in an attractive position with surplus electricity but will require more focus on its stable supply.
Globally, bitcoin mining is a highly energy-intensive process. Estimates suggest that it consumes over 130 terawatt-hours (TWh) of electricity annually — more than the entire power consumption of countries like Argentina or the Netherlands.
Power division consulting stakeholders to develop attractive power tariff for emerging industries
Due to this high demand, several countries have introduced specific electricity tariffs for crypto mining or have cracked down on it. For instance, once the hub for bitcoin mining, China banned the industry in 2021, citing environmental concerns and power shortages.
Iran offers subsidised electricity for mining but frequently shuts down operations during peak consumption periods. In October and November last year, Tehran and outlying provinces faced rolling power blackouts for weeks, with some suspecting cryptocurrency mining playing a role in the outages, according to the Associated Press.
Kazakhstan initially embraced crypto mining but later imposed higher electricity tariffs and taxes due to rising energy shortages.
El Salvador, the first country to adopt bitcoin as legal tender, provides low-cost geothermal energy from volcanoes for mining.
