Paraguay's Energy Grid Threatened by Bitcoin Mining Boom

Paraguay's energy grid is facing a potential crisis due to the increasing demand from bitcoin mining operations. The country has become a popular destination for miners, thanks to its 100% renewable energy blueprint from hydroelectric sources.

According to Victorio Oxilia, an energy researcher, bitcoin mining consumes around 30% of Paraguay's total energy consumption. This is equivalent to the generation of one and a half turbines at the Itaipu dam, one of the largest in the world.

Oxilia warned that if hydrological conditions remain favorable, this trend could develop into a crisis by 2029. The energy contracts with mining companies expire in 2027, leaving their extension uncertain.

Julio Fernández, head of the Center for Economic Studies of the Paraguayan Industrial Union (UIP), echoed similar concerns last year, stating that if nothing is done, a blackout could occur. Cecilia Llamosas, another analyst, emphasized that bitcoin mining demand is controllable, as operators can switch their consumption on and off depending on grid load.

The Paraguayan authorities have been cracking down on energy theft for bitcoin mining, registering convictions for these crimes.