Kazakhstan’s Energy Grid Crisis and the Crypto Mining Ban Explained

When you hear that Kazakhstan is grappling with rolling blackouts and a sudden clampdown on crypto mining, you might wonder how the two are linked. The short answer: a crumbling power network and soaring electricity demand from mining farms forced the government to act. Below we break down the grid’s condition, the ban’s specifics, and what’s being done to keep the lights on.

What’s wrong with the Kazakhstan energy grid?

By early 2024 the national grid operator KEGOC reported that more than one‑third of the country’s power plants were operating at 70‑90% wear and tear. The Unified Power System (UPS) - a network of 220 active plants - can generate about 20.4 GW of usable power, but the installed capacity sits at 24.6 GW. That gap shows how much capacity is tied up in aging equipment that can’t reliably feed electricity into the system.

Technical losses - why every fifth kilowatt disappears

Regional transmission losses average 17.42% in the worst zones, far above the 10‑12% benchmark for developed markets. In the city of Oral, losses peaked at 18%, meaning one out of every five kilowatt‑hours never reaches consumers. The Ministry of Energy attributes most of this waste to outdated transformers, overloaded lines, and poor maintenance practices.

Impact on households and businesses

• Frequent voltage drops trigger appliance failures.
• Industrial users, especially those running energy‑intensive processes, face production stoppages.
• Tariffs jumped 50% by April 2025 as the single‑buyer model tried to cover rising procurement costs.

These pressures created an urgent need for the government to cut consumption wherever possible - and crypto mining became a convenient target.

The crypto mining ban - who, what, and why

In March 2025 Kazakhstan’s Ministry of Digital Development announced a temporary ban on large‑scale crypto mining operations. The order applies to farms that consume more than 10 MW of continuous power and those that do not hold a special energy‑efficiency permit from KEGOC. Violators face fines up to $200,000 per day of non‑compliance and possible confiscation of equipment.

The rationale is straightforward: mining farms were siphoning up to 15% of the nation’s marginal electricity during peak hours, aggravating already‑high losses. By restricting the most power‑hungry players, authorities hope to shave several hundred megawatts off the grid’s peak load.

Renewable energy - the long‑term solution

Renewables currently contribute just 6% of Kazakhstan’s electricity generation, but the government plans to install three 1‑GW wind farms by 2027 and double solar capacity within five years. Investment commitments total $2.6 billion, though they lag behind regional rivals like Uzbekistan.

Smart‑grid technologies are also on the agenda. Implementing advanced metering infrastructure could help detect real‑time losses and reroute power more efficiently, potentially cutting technical losses by 3‑5% points.

Infrastructure upgrades in the pipeline

KEGOC’s 2023‑2032 development plan outlines three flagship projects:

1. Completion of the Western Zone integration by 2040, unifying the nation’s UPS into a single, more resilient network.
2. Construction of the North‑South HVDC Line (2024‑2029), adding 2 000 MW of transmission capacity and linking Kazakhstan to the CASA‑1000 regional project.
3. Deployment of smart‑grid pilots in the Almaty and East Kazakhstan regions to trial demand‑response programs.

These upgrades aim to reduce bottlenecks, improve cross‑border power flows, and create a flexible backbone capable of absorbing more solar and wind power.

Regulatory landscape - who’s in charge?

The Ministry of Energy oversees the power sector, while the Ministry of Digital Development handles crypto‑related regulations. The Eurasian Economic Union (EEU) is also pushing for a Common Electricity Market slated for launch in 2025, meaning Kazakhstan must align its grid standards with neighboring countries like Russia and Belarus.

The single‑buyer model remains a choke point; the state utility purchases all generation and sells to distributors. This structure limits price competition and makes it harder for small renewable producers to enter the market.

What does the future look like?

Analysts warn that without accelerating renewable deployment and completing the HVDC line, Kazakhstan could face electricity shortages by 2030. The ban on large crypto farms is expected to be lifted once the grid’s capacity improves, but only for operators that meet strict efficiency criteria.

In the meantime, smaller mining outfits are shifting to off‑peak hours or moving operations to countries with cheaper energy, such as Iran or Mongolia, to stay viable.

Practical checklist for stakeholders

• Investors: Prioritize projects that align with the government’s 2025‑2030 renewable targets.
• Mining operators: Apply for KEGOC’s energy‑efficiency permit and consider co‑locating with renewable farms to secure stable power.
• Policy makers: Accelerate smart‑grid rollouts and revise the single‑buyer model to enable more market competition.

Key takeaways

• The grid’s aging infrastructure causes technical losses up to 18% in some regions.
• Crypto mining bans target farms using >10 MW without efficiency certification.
• Renewable projects and HVDC line construction are central to solving the shortage.
• Regulatory reform and smart‑grid tech are needed to meet the 2030 demand forecast.