Electricity prices have risen in Russia. How has this affected Bitcoin mining?
2025-07-03 13:57
Electricity is one of the most significant expenses for digital asset miners, as cryptocurrency mining equipment consumes significant amounts of power. A single latest-generation device can consume approximately 3.5 kWh, or about 2.5 MW per month, and industrial digital asset facilities have thousands of such machines.
Electricity prices in Russia have increased since July 1. According to the Russian Federation's socioeconomic development forecast for 2025–2027, this year's electricity transmission tariffs will increase by 11.5% across the Unified National Electric Grid, and by 11.6% for grid companies.
Industry experts spoke to RBC-Crypto about how tariff increases are impacting businesses, what companies are doing to minimize difficulties, and who will be hit the hardest.
"Safety margin"
Leading market players use an internal risk management system, and electricity price increases are factored into it, says Oleg Ogienko, an independent expert on blockchain, energy, and digital finance. He notes that the annual scheduled indexation of electricity tariffs doesn't have a dramatic impact on energy-intensive businesses, but it still sends a negative signal.
"The most advanced companies initially focus on staying at the bottom of the electricity price curve, connecting to the grid and consuming energy as efficiently as possible. This provides a certain safety margin," Ogienko explained.
At the same time, he noted that such outpacing inflation in energy prices is, of course, reducing the competitiveness of Russian industrial digital asset mining overall. The expert noted that clients and investors, especially foreign ones, are beginning to choose other countries, such as the United States, where a real digital asset mining boom is currently underway.
Expanding cooperation with the fuel and energy sector
Under the current economic conditions, the construction of new digital asset data centers in Russia is declining, especially in regions with high electricity prices, according to GIS Mining. Miners are choosing energy-surplus areas with affordable electricity or regions where they can control prices through in-house generation. There is strong interest in joint projects with oil and gas companies that propose using associated petroleum gas for electricity generation.
Currently, the digital asset miner is primarily seeking partners among vertically integrated oil, gas, and power generation companies and establishing new partnerships, said Vasily Girya, owner and CEO of GIS Mining. He added that the company is intensively analyzing opportunities for collaboration with energy companies that use gas to generate electricity and heat, and plans to expand the construction of data centers using gas-fired power by early next year.
For reference: the life cycle of energy-intensive computing equipment (digital asset mining) at industrial facilities has two stages, during which electricity is used differently.
The first stage involves purchasing the latest equipment and operating it at full capacity, ensuring the target profitability. This stage is tied to Bitcoin mining and accumulation. After three to four years of use, the equipment becomes obsolete.
The second stage involves transporting the equipment to other sites using the so-called night rate. Uptime (uninterrupted operation) is reduced to 65–70%, and electricity rates are reduced by approximately 30%. Third-party software is often installed on the equipment. This equipment typically remains operational for another eighteen months to three years.
Against the backdrop of a significant decline in Russian gas exports to Western European countries, Russian fuel and energy companies are expanding their collaboration with industrial digital asset mining, says Girya. He emphasized that this allows them to generate revenue in dollars and bitcoins without political and operational risks.
The expert also noted that, in addition to Russia's energy-surplus regions, several other countries also appear strategically attractive for the industry. Girya cited Kazakhstan, Ethiopia, and Belarus among these countries.
"Profitability remains attractive"
The tariff increase effective July 1st wasn't unexpected, says Maxim Simutkin, Intelion's Director of Development, Energy, and Construction. He explained that all changes were approved back in December of last year, and the company had anticipated the corresponding adjustments to project economics.
However, in addition to rising tariffs, digital asset mining profitability is currently being impacted by the strengthening ruble, Simutkin noted. He added that the ruble has actually strengthened by more than 20%, which has impacted profits.
"Nevertheless, even under these conditions, digital asset mining continues to generate high returns—according to current estimates, for new devices, it exceeds 60% and remains attractive, despite both rising costs and the temporary strengthening of the national currency," Simutkin said.
Who will be affected
Starting this year, digital asset mining is restricted in some parts of Russia. In the North Caucasus republics, the LPR, DPR, the Zaporizhzhia and Kherson regions, and in the southern Irkutsk region, digital asset mining is prohibited until March 15, 2031. In Buryatia and the Zabaykalsk region, digital asset mining is prohibited during the heating season. The restrictions are due to local energy shortages.
According to the Federal Tax Service as of April 1, 2025, the largest number of legal digital asset miners are currently registered in Krasnoyarsk region, Irkutsk region, and Tatarstan. The latter region alone is home to over 5,000 digital asset mining data centers, according to the Tatarstan Ministry of Digital Development, Communications, and Mass Media.
Oleg Ogienko believes that the current rise in electricity prices will hit data centers in the European part of Russia and other regions where the digital asset mining business is already teetering on the brink of profitability. He also believes that the "legal" segment of the business will also face a tough time overall with rising costs, while the shadow sector has more room to maneuver.
According to Vasily Giri, market players continuing to operate in the northern districts of the Irkutsk region will face challenges, as differentiated electricity tariffs are now in effect there. The expert also noted that the negative consequences will significantly impact owners of older equipment, much of which is already operating at a loss, and the tariff increase will make things even more difficult for them.