Paraguayan miners fear industry will die after 16% increase in electricity rates

Paraguay’s cryptocurrency mining industry will have to pay higher costs to operate locally. With a new measure that raised the cost of electricity rates in dollars for the sector, with increases of up to 16% depending on the type of consumer.

The National Electricity Administration (ANDE) announced a tariff update for the so-called “special intensive consumption group”, which is the way in which users who process data and provide information storage services, including digital asset mining, tokens and data centers, are identified.

For the first time in almost two years, the agency issued Resolution No. 49238, which impacts the energy cost of the more than 50 digital asset companiesAs CriptoNoticias has been reporting, Paraguay’s official offensive seized more than 9,600 ASIC devices that were illegally and unauthorizedly stealing electricity.

With this Thursday’s decision, ANDE updated the rates in three groups of consumers: those of Very High Voltage (220 kV), High voltage (66 kV) and Medium voltage (23 kV). From now on, each user will have to pay higher prices in dollars to use the electricity supply.

To visualize the impact of the increase, a few examples suffice. For 220 KV users, the latest values ​​were USD/KW 4.64 per month for the “peak load reserved power” unit, which is the price used during a normal daily energy consumption schedule. That value rose to USD/KW 5.27 per month, around 13%.

Among the highest increases is the group of medium voltage users (23 kV). When there is a condition of “excess power reserved at peak load”, the rate to be paid went from being charged per unit of USD/KW 55.88 per month, to USD/KW 65.04 per month. The increase represents 16%.

In Paraguay, mining companies have to sign a special contract electricity supply agreements. These are the types of agreements that will be affected by the tariff update, which cannot exceed their deadline until December 31, 2027.

Unrest in the mining industry

In the run-up to this announcement, the brand new Paraguayan Chamber of Digital Asset Mining expressed, in a statement, its concern about the possible increase in rates, which was finally made official on Thursday.

The business entity, which formalized its launch this week, warned that an increase in energy rates “will have a significant negative impact, potentially leading to the disappearance of the sector in Paraguay”.

According to the chamber, the implementation of the increase would mean “Paraguay would be losing significant income,” among other factors such as “loss of employment, loss of confidence in the Government, having to once again give in to other countries at very low prices.” , the energy that is being sold to the sector at much higher prices, even up to 50% higher than other industries in Paraguay.”

The corporate entity highlighted that the Paraguayan government of Santiago Peña “promotes stability and a favorable environment for business,” but that with regard to the industry it is taking “actions that will affect, without justification, the continuity of a sector that provides much benefit to the country, altering the conditions under which investments in said sector were made and implemented.”

“This situation will only project a Negative image of the investment environment in Paraguay, significantly altering the legal security necessary for investment, both national and foreign,” the statement concluded.

This business representation is made up of 12 companies in the Bitcoin mining sector, such as Muiden, Antilia Sur, Archer, Richford, Bitfarms, Blockware, Penguin Infrastructure, Dolomiti, Velox Emprendimientos, Natural Environment, MCA de Cayo Maidana, and Digital Assets.