EDL Ends Power Supply To Crypto Mining Businesses
Electricite du Laos (EDL) has recently announced a significant policy shift, revealing that it will no longer provide electricity to cryptocurrency mining operations within the country, citing adverse climatic conditions and mounting debts. The move, announced on August 24th through an official notice, has raised concerns about the future of cryptocurrency mining in Laos.
Electricite du Laos (EDL) has announced that it will no longer supply electricity to cryptocurrency mining operations in Laos. 95% of the nation’s electricity is generated by hydropower plants through its system. In September 2021, the government of Laos authorised six companies…
— Wu Blockchain (@WuBlockchain) August 28, 2023
Hydropower Struggles
The decision was prompted by the challenging environmental conditions that have gripped the nation during the initial half of 2023. Prolonged droughts and soaring temperatures have resulted in escalated electricity demand while hydropower facilities have struggled to maintain adequate energy output. Notably, approximately 95% of Laos’ electricity is generated by hydropower plants, a system particularly susceptible to variations in water supply.
EDL’s new strategy aims to prioritize local electricity supply and secure sizeable exports to the Electricity Generating Authority of Thailand (EGAT) to fulfill the needs of Thailand’s power grid during the impending dry spell in 2024. The Governor of EGAT warned that if the drought worsens, Laos’ hydropower capacity could plummet, diminishing their ability to export power to neighbouring Thailand.
Concerns in Laos
Furthermore, authorities in Laos have pointed out that cryptocurrency mining operations have been negligent in repaying their accrued debts. The government’s decision to allow six companies to partake in cryptocurrency trading and mining activities in 2021 was seen as a pioneering step, exploring the potential benefits of cryptocurrencies like Bitcoin, Ethereum, and Litecoin.
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Nevertheless, the latest turn of events has raised pertinent questions about the viability of cryptocurrency mining in Laos. The dependency on hydropower for energy generation exposes the country’s vulnerability to unpredictable climatic patterns, emphasizing the need for diversified power sources to guarantee a stable energy supply. As cryptocurrency mining requires substantial energy consumption, the EDL’s decision may prompt these operations to seek alternative locations with more reliable and cost-effective electricity sources. This, in turn, could impact the country’s economic landscape and the revenue streams associated with the cryptocurrency sector.
