Rebel Transnistria to boost power capacities to supply blockchain miners

Rebel Transnistria to boost power capacities to supply blockchain miners
By Iulian Ernst in Bucharest June 29, 2018

The pro-Russian separatist region of Transnistria in Moldova is preparing to bring the old Cuciurgan gas-fired power plant (GRES) controlled by Russia’s Inter RAO closer to its massive capacity. 

Designed in the Soviet era to deliver power to Moldova, Romania and Ukraine, this time around Cuciurgan GRES will supply local blockchain mining operations, Mold Street reported. Transnistria inherited most of Moldova’s electricity generation capacities developed during the Soviet period.

The growth of such businesses in Transnistria would have major political implications, providing the separatists with resources at a time when the central authorities in Chisinau, helped by Ukraine, are isolating the rebel unrecognised territory.

The Cuciurgan plant is used at its current maximum capacity of 200MW, but only one of the 12 units developed during the communist regime is working. It was not disclosed how many of the other units would be refurbished, but probably this depends on the volume of investors in mining operations. A new lot of equipment for such operations has just arrived in the territory, the Transnistrian authorities announced.

The first mining capacity has already started working, and the government has received its first revenues, Prime Minister of the separatist region Alexandr Martynov told the daily. There are multiple sources of revenues: the taxes charged to companies carrying out blockchain mining operations, but also the price of the gas used by the Cuciurgan plant. 

In signs of further interest in blockchain mining in the separatist republic, Chinese investors visited Transnistria in May to evaluate plans for developing mining farms related to blockchain technology, reported. Russian investors announced similar plans last September.

Transnistria receives gas from Russia but never pays for it. Tariffs paid by businesses and households in Transnistria are directed to the government’s budget, while Tiraspol leaves the bill for gas imports to be added to the massive arrears of Gazprom-controlled Moldovagaz in Chisinau — in effect gas delivered by Gazprom is seen as a Russian subsidy for the separatists. This allows the Transnistrian authorities to charge a very low price for the gas delivered. 

This is good for bitcoin miners, as the technology is energy-intensive. Cryptocurrency mining is a validation of transactions by adding transaction records to Bitcoin's public ledger of past transactions or blockchain, rewarded in cryptocurrency. It might be profitable in Transnistria due to the “very low” electricity price in the region, commented.

It will also provide Transnistria with an alternative market for its electricity, should Moldova decide to switch to alternative suppliers in an attempt to turn the screws on the rebel government.