Laos state-owned electricity distribution company, Électricité du Laos (EDL), has announced the suspension of electricity supply to crypto mining operations within the country. The decision, attributed to multiple factors including power generation challenges due to drought conditions, has sent ripples through the crypto community.
According to an official statement released by EDL, the nation faced a prolonged period of drought during the first half of 2023. This unfortunate circumstance exacerbated the demand for electricity as extreme heat conditions prevailed, leading to an uphill battle for the hydropower plants to meet the electricity requirements.
The power supply suspension announcement comes at a time when the country’s hydropower plants contribute a significant 95% share of the overall power generation capacity. Furthermore, authorities at EDL have set ambitious targets for the year 2024, intending to provide electricity to local consumers while also earmarking substantial volumes for export to Thailand. However, these aspirations may face setbacks due to the escalating severity of conditions, potentially affecting the country’s ability to fulfill its export commitments.
Crypto Mining and the Financial Struggles in Laos
In a conversation with the local media outlet, the Laotian Times, an EDL representative pointed out another critical reason for the suspension – the failure of crypto mining projects to settle their outstanding payment balances. This financial discrepancy adds an additional layer of complexity to the situation, indicating a broader challenge for crypto miners in meeting their financial obligations to the electricity provider.
The backdrop of this decision harks back to September 11, 2021, when the Laotian government embarked on a public-private partnership initiative aimed at exploring opportunities in crypto mining and trading. This strategic maneuver was triggered by China’s clampdown on mining activities, which led several industrial-scale miners to seek alternative locations for their operations. At the inception of the initiative, six select companies were granted permission to undertake mining endeavors in Laos, signaling the nation’s attempt to harness the potential benefits of crypto-related activities.
The suspension of electricity supply to crypto mining operations underscores the intricate interplay between environmental factors, power generation challenges, and financial considerations. As the crypto landscape navigates through these complexities, stakeholders remain vigilant to see how the situation evolves, potentially shaping the future trajectory of both crypto mining and energy consumption in Laos.