Warning: Bitcoin Mining Could Cause Paraguay's Power Grid to Collapse by 2029

Paraguay's Industrial Union (UIP) has warned that if consumption continues to increase as a result of rising bitcoin production, the country's energy system could face disruptions as early as 2029. The union has proposed diversifying energy sources and reducing reliance on hydroelectric power.

Increased demand for Bitcoin mining could cause an energy crisis in Paraguay by 2029

Paraguay, which is facing a surge in cryptocurrency mining companies looking to take advantage of its available hydroelectric power, could face serious problems as the activity grows.

According to the Paraguayan Industrial Union (UIP), if consumption continues to grow and electricity generation does not increase, a crisis could occur as early as 2029. Julio Fernandez, head of the UIP's Center for Economic Research, expressed concern about how rapidly demand has increased in recent years.

Fernandez noted:

Itaipu and Yacyreta are no longer sufficient. We consume more than one Itaipu turbine per year.

Paraguay's electricity is almost entirely generated by the Itaipu Dam, which generated 83.879 TWh in 2023. However, the dam is located on the border between Brazil and Paraguay and is managed jointly with Brazil, which also buys electricity from Paraguay.

Despite this huge source of energy, UIP believes that the critical moment is approaching quickly. “We have very little time. If we do not act now, there will be a blackout,” Fernandez warned, calling on authorities to take action before that happens.

One of the UIP's proposals to prevent this crisis is to use the natural gas supply agreement between Argentina and Brazil to ensure transportation and build energy infrastructure designed to use this energy source.

“Paraguay could earn $400 million a year from road tolls alone. The thermal power plant could also supply the country and sell the surplus to Brazil,” Fernandez concluded.

Despite its negative policies towards mining and rising electricity prices for Bitcoin miners, the Paraguayan government has attracted companies like Hive Digital, which plans to increase its capacity by 400% after completing its 200 MW facility.

Read more: Hive Digital Doubles Down on Bitcoin Mining Expansion in Paraguay

Source: cryptonews.net