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A prominent Russian mining firm, “Algorithm,” has urged the Ministry of Energy to abandon the “take-or-pay” principle concerning cryptocurrency mining. This payment method involves miners paying not for the actual electricity consumed but for nearly the entire capacity of their maximum potential consumption.
“Algorithm” is aware of a draft government resolution that would allow energy providers, starting in 2027, to charge data centers and miners with capacities exceeding 670 kW based not on actual usage but on 90% of the maximum declared capacity.
“For instance, if you have reserved 100 MW, your bill will reflect a consistent consumption of about 90 MW monthly, regardless of actual load,” the company explained to Bits.media.
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This arrangement does not take into account the unique nature of mining as a specific type of energy consumption and effectively establishes a discriminatory regime for it compared to traditional data centers and other consumers with stable, predictable load profiles, as stated in a letter to the ministry signed by “Algorithm’s” managing director, Pavel Gudimov.
The letter includes findings from the company’s own research (materials are available to Bits.media), indicating that expectations for growth in mining energy consumption at full load are overstated, and that electricity tariff increases in Russia are outpacing those in “key foreign jurisdictions.”
The management of “Algorithm” proposes an alternative to the authorities: to view miners not as a threat to the energy sector but as “energy-balancing consumers”—those who utilize power plant capacities during periods of low demand (primarily at night). The company suggests allowing miners to connect directly to electricity-generating facilities, bypassing the grid.
“We are willing to pay the networks even without actual connection to them, but we are not prepared to pay competitive prices for electricity during daytime hours when we are not operational; this is unjust,” representatives of “Algorithm” stated in a conversation with Bits.media.
Additionally, the company has proposed to the ministry to exempt miners from the requirement to install mechanical emergency shutdown systems that allow for “the miner to be disconnected at any moment.” “Algorithm” asserts that on-off switching can be managed through specialized software.
Company representatives informed Bits.media that the letter was sent on March 18, but they have yet to receive a response from the ministry.
The proposal for the government to charge miners for electricity under the “take-or-pay” scheme was made by Deputy Prime Minister Alexander Novak. The Ministry of Energy stated that the aim of the initiative was to “reduce the construction of unnecessary energy infrastructure” and to curb tariff increases.
Recently, the Russian government submitted a bill to the State Duma proposing criminal liability for illegal mining. Penalties for mining cryptocurrency without voluntary registration in the state registry for miners could include fines up to 2.5 million rubles or equivalent to three years of income, or even actual prison sentences of up to five years.
