Energy regulators are becoming increasingly concerned about illegal cryptocurrency mining in Paraguay.
The National Electricity Administration, (ANDE), has determined that this illegal activity accounts for the majority of electrical losses which now exceed 28%.
Unregulated mining methods that exhaust critical energy sources are becoming more prevalent as the popularity of cryptocurrency grows.
Electricity losses: their scope
The CEARE-BID consultant’s latest figures for October 2024 show the impact that illegal mining has on the energy system.
These operations are likely to involve significant thefts of electricity that contribute significantly to an increase in energy losses.
Ande data shows that these losses increased in just a short time from 26,2% to an astonishing 28.5%.
The alarming increase in energy loss, especially those caused by illegal mine activities, forced the Paraguayan Government to create a management strategy that addresses the issue.
The “Master Plan for the management and control of electrical losses in distribution” established by the government establishes an overall strategic framework for the years 2025-2034.
This paper distills substantial research on technical and operational issues into strategies and concrete actions to address both the technical and non-technical loss in the Sistema Interconectado Nacional.
Take a closer look at data
This analysis reveals a worrying trend in Paraguay’s statistics on energy losses. The overall loss was consistent up to 2020 at around 26%.
But since 2021 there have been large increases, with a maximum of 28,5% in 2023.
Six departments have been severely affected by these losses: Canindeyu Central Alto Parana Itapua San Pedro and Caaguazu.
According to research by Ergon and the World Bank in February 2024, these locations will be crucial for the short-term government measures to combat non-technical loss.
The research shows that technical transmission losses are responsible for 5.1% total losses in electricity.
Distribution losses make up the remaining 23,4%, and are equally divided into technical and non-technical loss.
It is estimated that 11,7% of the total losses will be commercial. This can be controlled by appropriate governance and regulations.
Responses of industry to tariff increases
The Mining and Crypto Assets Chamber of Paraguay has expressed concern about potential increases in electricity prices.
The cryptocurrency mining industry is already under pressure, and any rise in electricity costs could be detrimental.
A report in Spanish by Cointelegraph shows that the mining industry has concerns and is advocating for a balance approach which recognizes the need for regulation as well as the benefits to the economy of cryptocurrency.
In order to improve the effectiveness of its energy management system, Paraguay’s government is not only looking into energy theft methods but also reviewing energy consumption and distribution patterns.
It is not clear how the new measures will impact cryptocurrency mining in Paraguay and its participants.
What lies ahead for Paraguay
The proposed plans are crucial to Paraguay’s future energy as it navigates through the complex world of energy management and the challenges posed by the illegal mining of cryptocurrency.
To balance the increasing demand for reliable, clean energy and the changing demands of the digital economy, creative regulation measures will be required, as well as collaborative participation among the government, industry and local communities.
Paraguay faces a crucial moment where it is necessary to take proactive steps in order to protect valuable resources and create a stable environment that will benefit both the traditional sector and cryptocurrency users.
Future years will have a profound impact on the energy landscape in Paraguay, as the country strives to take back control over its electrical network and make sure that all sectors thrive within the limits of efficiency and legality.
The post Paraguay fights illegal crypto-mining to reduce energy loss may change as new information becomes available.
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