Kazakhstan might build nuclear plant to keep Bitcoin mining migrants

Kazakhstan's citizenry is skeptical of nuclear power after years of atomic weapons testing under the Soviets. Bitcoin could force the issue.

Kazakhstan’s president Kassym-Jomart Tokayev has suggested the construction of a nuclear power plant to keep up with Bitcoin mining migrants, reports Nikkei Asia.

“Looking into the future, we will have to make an unpopular decision about the construction of a nuclear power plant,” Tokayev told bankers at a meeting in the nation’s largest city Atla last Friday.

Kazakhstan’s only nuclear power plant closed in 1999.

Despite the country’s status as a leading producer of uranium (41% of the world’s 2020 supply) citizens remain uneasy after years of atomic weapons testing under the Soviet Union.

Kazakh health authorities estimate 1.5 million citizens were exposed to nuclear fallout from 110 tests between 1949 and 1963.

But 1,200-megawatts worth of fresh demand — pegged to be the result of incoming Bitcoin miners from neighbouring China — have resulted in several power cuts across the once energy-rich country.

Kazakhstan now major Bitcoin mining hotspot

Kazakhstan’s hashrate quadrupled to over 18% after welcoming Bitcoin miners ousted from China earlier this year.

The Central Asian nation was rated the second-largest Bitcoin miner globally as of August.

According to the Cambridge Bitcoin Electricity Consumption Index’s IP data, Kazakhstan trailed only the US, which controlled over 35% of the world’s Bitcoin mining power.

To fuel the Bitcoin mining influx, demand on the country’s energy supply increased around eight times more than its usual 1-2% annual growth.

In October, the country’s largest coal-fired power plant (Ekibastuz-1) was one of three to go offline. The Kazakhstan Electricity Grid Operating Company (KEOC) partially blamed Bitcoin miners for the outage.

The rise of Kazakhstan in Bitcoin mining.

A month earlier, KEOC limited power to some data centers. KEOC completely cut off some miners in the south of the country, far away from the power plants in the north.

At press conference earlier this month, Kazakhstan’s deputy energy minister Murat Zhurebekov said the country had no choice but to rely on Russian produced power in an attempt to bridge the gap.

It hasn’t.

Kazakhstan already produces nuclear fuel

On November 10, national nuclear energy firm Kazatomprom officially opened a new plant making uranium fuel rods.

However, the expected 200 tones of nuclear fuel is intended for Chinese power plants.

Despite unease from citizens, President Tokayev is keen on a nuclear solution. He suggested a referendum on the issue two years ago.

“I myself believe that it’s time to substantially consider this issue, since Kazakhstan needs a nuclear power plant,” Tokayev said at a Russian business forum in September (via Eurasianet).

In the same speech, he called Kazakhstan’s nuclear phobia “inappropriate.”

Kazakhstan neighbours China, once home to more Bitcoin hashrate than anywhere else in the world.

Read more: [Bitcoin miners overload Kazakhstan’s electricity grid, forcing rations]

And while he’s yet to sell the idea of nuclear energy to the public, local Bitcoin miners will be expected to pay a premium for power from January 2022.

A new tax law will add one Kazakhstani tenge ($0.0023) per kilowatt hour consumed by cryptocurrency miners.

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