Bitcoin Mining’s Impact on Paraguay’s Power Grid
Operators involved in Bitcoin mining are causing less disruption to Paraguay’s power grid than originally anticipated, according to the nation’s power supplier.
The remarks were made by Félix Sosa, the President of the National Electricity Administration (ANDE), as reported by the Spanish-language news outlet Criptonoticias.
At a recent conference focused on blockchain technology, Sosa stated that crypto mining activities in Paraguay do not hinder the electricity supply for local residents.
Sosa detailed that the energy consumption from BTC and crypto miners in Paraguay amounts to just over 700 MW.
He indicated that miners are required to operate within designated zones across the country to prevent overloading areas that might face power shortages.
According to Sosa, the projected electricity usage from crypto mining by 2025 is expected to be equivalent to the output of just one and a half turbines from the Itaipú Dam.
The Itaipú Dam is recognized as one of the largest hydroelectric power facilities worldwide, boasting 20 turbines. The most powerful turbines, operating at 60 Hz, primarily provide energy for Brazil.
Located on the river that divides the two Latin American nations, the Itaipú Dam generates surplus power for Paraguay, despite Brazil receiving the majority of the dam’s energy output.
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In recent years, ANDE has permitted Bitcoin miners to utilize a significant portion of this surplus energy, promoting it as “abundant, renewable, and affordable energy.”
Additionally, the power provider claims to offer miners competitive rates for clean electricity.
According to Paraguayan law, miners are required to pay differentiated fees depending on their electrical voltage demands.
- The lowest rates are for the sub-23 kV (medium voltage) category.
- The next tier is sub-66 kV (high voltage).
- The highest category consists of users over 220 kV (very high voltage).
Sosa remarked, “Our priority is to ensure responsible energy use, consistent with the capacity of the Paraguayan system.”
While miners are currently consuming just over 700 MW, ANDE aims to increase this capacity to 1,000 MW by the end of 2025.
The projected capacity expansion is anticipated to generate revenue of approximately $240 million for ANDE.
However, Criptonoticias quoted engineer Axel Benítez, who criticized Sosa’s statements. Benítez pointed out that, according to data from 2024, the actual energy consumption billed to crypto mining companies was only 255.5 MW. He stated:
“If they are planning to go from 700 to 1,000 MW by the end of 2025 and ANDE is set to collect $240 million, a simple math calculation results in a rate of $80 per megawatt hour. That is almost double the current rate for [crypto miners]. So, that means that either a rate hike is coming, or ANDE does not know how to use a calculator.”
The media outlet also reported that some residents of Paraguay have voiced concerns regarding the growth of Bitcoin mining in the country.
Residents in the Santa Lucía District of Villarrica have complained about “constant noise from fans and mining equipment,” asserting that the noise negatively impacts families’ mental health, sleep, and overall quality of life. This issue is especially troubling for children with special needs, according to the locals.
While ANDE has adopted a supportive approach towards legal crypto miners, it has also been actively combating illegal operations.
Last year, the agency acknowledged that it loses approximately one third of all the energy it generates, with illegal miners being accountable for part of these losses.
They have confiscated over 10,000 Bitcoin mining rigs and, last year, a group of 14 senators urged the government to temporarily suspend crypto mining throughout the country.
