The government of Sichuan, China, which has long served as a major mining center due to the abundance of hydropower, has ordered the closure of local mining farms until June 20.
The Energy Regulatory Authority and the Sichuan Provincial Development and Reform Commission have called on state-owned energy companies and power plants to stop supplying electricity to mining farms. The agency recently held a meeting to discuss how many mining farms are supplied with electricity and how their shutdown could affect hydropower consumption.
The order of the local authorities will directly affect 26 registered mining enterprises that have tried to cooperate with the government, and were created in certain industrial zones. These industrial parks were set up by local authorities in an attempt to attract mining farms that would consume excessive amounts of hydropower during the summer rainy season, otherwise this energy would be wasted.
Since 2020, dozens of bitcoin miners have been granted permits to operate in these industrial parks and have paid the necessary fees to get power from the government grid. However, by June 20, even registered farms will be disconnected from the electricity grid. Perhaps it was because of their registration with local regulators that they became the first victims to “fall under the hand.”
As for miners privately receiving power from small power plants, they will be much more difficult to detect. These miners are supplied with energy directly, bypassing the state grid operator, which acts as an intermediary for the distribution of electricity. Therefore, local authorities will closely monitor the supply of electricity to private miners and immediately disconnect them from the network in case of detection. A detailed report on the results of the work performed will be drawn up by June 25.
Note that the Chinese provinces began to implement such harsh measures after the May meeting of the Committee on Financial Stability and Development of China, which called for a ban on mining and trading in bitcoin.
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