What Is Behind Iran’s Blackouts?
From the start of the summer season, Iranians faced extended unannounced blackouts in several cities, not knowing what is behind Iran’s blackouts. Iranian officials have stated the blackouts will continue for at least a month. Many think the causes of the blackouts are bitcoin miners or high consumption of energy in the summer months.
However, according to Iranian officials and experts, the blackouts are caused mainly by the lack of investment in Iran’s infrastructure and deterioration of the electricity distribution networks, in addition to bitcoin miners.
Experts say Iran has a 10,000-megawatt deficit in electricity production. They say the state was supposed to add 5,000 megawatts a year to the electricity production, but in the past two years, only half of this was added.
According to a 10-year plan, Iran should have invested two billion dollars a year for the renovation of the electricity infrastructure, but it was not carried out, causing a four-billion-dollar loss annually.
In a report by the state-run YJC News Agency, Hamidreza Salehi, Iran’s Head of the Energy Commission in the Chamber of Commerce, said the 10,000-megawatt electricity shortage is due to the lack of investment in this industry.
Mohammad Hassan Motevalizadeh, the CEO of Tavanir (Iran’s Power Generation, Transmission and Distribution Management Company) said in a press conference on July 4 that cryptocurrency extraction is consuming 2000 megawatts, and there has been a 20% increase in electricity consumption.
Mohammad-Javad Azari Jahromi, Iran’s Minister of Information and Communications Technology said in a tweet on July 7 that 13,000 small and large bitcoin farms were identified and 300 were “dealt” with.
In the past days, angry Iranians have protested outside municipality and energy company buildings, blaming Khamenei, the regime’s unelected Supreme Leader, and other officials.
In January, Iranians experienced unannounced blackouts in the capital Tehran and in other cities. There were contradictory remarks on the reason behind the blackouts at that time as well.
In May, Iran’s blackouts disrupted the daily lives of millions. Despite blackout timetables announced by officials in Tehran, the neighboring Alborz Province, and Khorasan Razavi in northeastern Iran, unannounced blackouts occurred across the country for two days.
The state-run ISNA News Agency said the CEO of Tavanir blamed Iran’s blackouts on drought impacting hydropower generation, and surging electricity demand due to crypto-currency mining and the increase in temperatures.
In February, the Chairman of the Iran-China Chamber of commerce said in addition to Chinese companies, Polish and Indian companies had official permits for bitcoin mining in Iran.
Foreign companies with bitcoin farms are consuming a lot of the available electricity and energy in Iran.
On January 28, Coindesk, a news website specializing in bitcoin and other digital currencies, wrote “Iran is trying to make crypto mining a source of income for the state while cracking down on miners.”
The regime, seeing crypto mining as a way to generate state income and compensate for the crumbling economy, has been requiring miners to register with the country’s Ministry of Industry, Mines, and Trade and pay a higher tariff on electricity than retail or industrial users last year.