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Paraguay says it prefers to sell energy to Bitcoin miners than to Brazil

Written by Valdemar Medeiros
Published 13/06/2024 às 08:10
Paraguay says it prefers to sell energy to Bitcoin miners than to Brazil
Photo: Bitcoin Miners/Midjourney

Brazil has already shown interest in buying surplus energy, but Paraguay prefers to sell energy to Bitcoin miners.

The government of Paraguay recently made an announcement about the government's plans to sell its surplus electrical energy, giving sales priority to Bitcoin miners, even though Brazil has already shown interest. According to Javier Giménez, Minister of Industry and Commerce of Paraguay, Brazil is entirely focused on taking advantage of Paraguay's surplus energy only in a strategic and profitable way and, therefore, Paraguay prefers to sell energy to Bitcoin miners.

Why does Paraguay prefer to sell energy to Bitcoin miners than to Brazil?

Also according to minister Javier Giménez, it is much more profitable for Paraguay to sell its surplus energy to Bitcoin miners, because they pay up to 3 times more than the amount that could be paid by Brazil. However, the proposal prepared by Brazil emphasizes that the price paid for energy generated in the binational hydroelectric plant is much cheaper.

The Federal Government of Brazil is seeking to review the agreement made in Itaipu Hydroelectric Power Plant, which was built through a binational agreement between Paraguay and Brazil in 1973, in the Foz do Iguaçu region. The agreement itself provides for a review of all terms after 50 years of signing.

The review of the terms of the agreement must be discussed with Paraguay by September and the Brazilian government has assumed that it intends to balance these agreed terms so that they suit both countries. This would mean lowering the price of energy supplied to Brazil.

Giménez explains more about selling surplus energy to Bitcoin miners

The Itaipu plant is strategic for both Brazil and Paraguay, as the plant has twenty generating units and 14.000 MW of installed power. Thus, the Itaipu binational plant supplies around 8,7% of the energy consumed in Brazil and 86,4% in Paraguay. Even so, Paraguay prefers to sell energy to Bitcoin miners than to Brazil.

Giménez highlighted during a conversation at the Paraguay-Brazil Chamber of Commerce that his country has a large amount of surplus energy and that to make full use of this energy, it would be necessary to build more than 10 thousand new industries, something that is not easy to achieve in shortly.

“We are rushing to attract industries, but how great would it be if in the meantime we did the smart thing and gave the power to cryptominers, where there is demand, so they can use it in the meantime”, said Javier Giménez.

Bitcoin mining is common in Paraguay

Minister Javier Giménez reported that Bitcoin mining farms are Paraguay's only profitable industry. According to Giménez, many of these farms are responsible for protecting the country's electrical system by turning off their machines at times of peak local demand, as requested by the National Electricity Administration, ANDE.

Currently, Paraguay is home to more than 50 Bitcoin mining companies operating legally, paying ANDE energy contracts and regularized by it. However, Paraguay also faces challenges with illegal Bitcoin mining farms.

Since the beginning of 2024, the National Electricity Administration (ANDE), together with the Public Ministry and other institutions, intensified the protest against an illegal mining farm.

An operation revealed that Bitcoin miners had a clandestine farm near ANDE's headquarters, where around 3.000 Bitcoin mining equipment were seized by police. Even with the legalization of Bitcoin mining in the country, illegal activity has been spreading, which requires a more aggressive regulatory framework for the country.

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Valdemar Medeiros

Journalist in training, specialist in creating content with a focus on SEO actions. Writes about the Automotive Industry, Renewable Energy and Science and Technology

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