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Paraguay is the only country in the world where 100% of electricity is generated from renewable sources. The state holds another disputable record – the generated kilowatts are practically not consumed by business and the population, the share of energy exports reaches 85%.
The legislators decided to use the situation in the global mining industry to increase domestic electricity consumption by attracting large miners.
Bitcoin miners were forced to look for new locations in 2021, after the persecution of this type of activity in China. The deputies of Paraguay have developed a law on the regulation of mining and cryptocurrencies for a year, which, in particular, prohibits the increase in tariffs above the rate of 15%.
It was this rule that caused a sharp protest from the National Electricity Administration of Paraguay (ANDE). All of the country’s power plants are wholly owned by local companies, which will suffer losses from tariff cuts.
ANDE predicts a sharp decline in the share of exports and an increase in domestic consumption, which will bring the national currency instead of dollars. High inflation has been depressing the Paraguayan Guarani for 5 years.
The increase in Fed rates will only accelerate this fall, and ANDE is demanding that miners be given equal payment terms with exporters. Miners have to pay for kilowatts in dollars in advance. ANDE does not want to lose the Latin American market, where Paraguay leads in energy supplies, to supply an industry whose prospects are in doubt.
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