Paraguay's Industrial Union (UIP) has warned that if demand for electricity continues to increase due to the rise of bitcoin mining, the country's energy system could be at risk as early as 2029. The union has suggested considering diversifying the country's energy sources and reducing its reliance on hydroelectric power.

Rising Bitcoin Mining Demand Could Cause Energy Crisis in Paraguay by 2029

Paraguay, which has seen a surge in cryptocurrency mining companies looking to take advantage of available hydroelectric energy, could face problems as the activity grows.

According to the Paraguayan Industrial Union (UIP), if consumption continues to grow and electricity production 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 the sharp increase in demand in recent years.

Fernandez noted:

Itaipu and Yacyreta are no longer able to cover our needs. We consume more than one Itaipu turbine per year.

Paraguay's energy is mainly generated by the Itaipu hydroelectric power plant, which produced 83.879 TWh in 2023. However, this plant is located on the border between Brazil and Paraguay and operates jointly with the former, which also receives electricity from Paraguay.

Even with such a powerful energy source, UIP believes that the critical moment is approaching quickly. “We have very little time. If we do not act now, we will face power outages,” Fernandez estimated, 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 export agreement between Argentina and Brazil to ensure transit and build energy infrastructure designed to exploit this resource.

“Paraguay could earn $400 million a year in 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 raising electricity rates 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