A report issued by a public electricity distribution center Électricité du Laos (EDL) revealed plans to suspend the supply of electricity to crypto mining sites. In a blog post dated August 25, the EDL admitted that the station has been unable to generate sufficient power for the crypto mining site due to ongoing drought. In the admission, the EDL stated that during Q1 of 2023, the country was struck by a severe drought that undermined the operation of many enterprises and power generation projects.
Laos Cuts Off Electricity Supply for Crypto Mining
The drought lowered the Mekong water flow, which played a critical role in hydroelectric power generation. The People’s Democratic Republic of Laos experienced extreme heat conditions that spurred the electricity demand for cooling purposes.
Earlier, the EDL lamented that the power generated from the hydropower plants was insufficient to meet the growing energy demand. The EDL has supported 95% of power generated from the hydropower plant for years.
The energy generated from the plants has been commonly used for local purposes, though the EDL will export the energy to Thailand next year. However, if the drought continues, the EDL regrets that Laos will have to limit energy to be exported in volumes.
Factors Contributing to Decline in Energy Production
Currently, Laos ranked among the top largest exporter of hydroelectric energy in Asia. Despite exporting energy to Thailand, Laos has supplied power to Vietnam, Myanmar, Malaysia, and Singapore. The geographical location of Laos has supported the country to generate power in volumes.
Presently, Laos has installed hydropower plants generating 26000 megawatts. The Laos authority plans to double the supply of renewable energy in future since the country is well-situated near multiple rivers and mountain terrains that will support power production.
Also, the existence of Nam Theun Dam will increase energy production for local and export purposes. The authority plans on supporting the Luang Prabang dam to increase its energy supply to over 1460 megawatts.
Laos Crypto Mining Unabled to Settle Bills
In a wide-ranging interview with the Laotian Times, the EDL official explained why the authority agreed to suspend crypto mining activities in the country. The EDL executive lamented that most crypto-mining sites could not settle their outstanding electricity bills and external debts.
In a recent report, the Bank of Laos suspended its loan services to crypto miners to strengthen the bank’s financial stability and reduce potential risk.He admitted that Laos has been seeking to tap into the endless benefits garnered from crypto mining activities.
Additionally, the Laos government plans to seize viable opportunities in Southern Asia following restrictions on crypto mining in its neighboring country, China. The crackdown on crypto mining in China has encouraged investors to seek suitable markets in other countries in Asia.
A few days ago, the Chinese authority charged crypto investor Xiao Yi for illegally operating a $329 Bitcoin mining facility and misuse of power. Guided by the new provision of crypto mining, the Intermediate People’s Court of Hangzhou sentenced the Chinese official to life imprisonment.
Laos to Support Crypto Mining
The attempt to gain dominance in the crypto industry inspired Laos to launch a public-private pilot program for mining and trading digital assets in 2021. After the project’s launch, the Laos authority allowed six crypto-mining companies to engage in mining activities. The program has also supported the reshaping of the crypto mining landscape in Laos to attract foreign investors to the country.
Interestingly, while Laos seeks to minimize crypto mining activities, the Sultanate of Oman authority is exploring a way to increase Bitcoin mining operations. In mid-August, the efforts to digitize the Oman economy, which relies on oil export, resulted in the launching of a $370 million crypto-mining facility.
The new mining site was launched in Salalah Free Zone, a special economic zone in Oman. Months before the launch of the Salalah mining site, the Oman authority had opened a $389 million mining facility. The newly launched mining facility will be operated by Exahertz and Moonwalk systems.