Alert: Bitcoin Mining Could Collapse Paraguay's Power Grid by 2029

The Paraguayan Industrial Union (UIP) stated that if demand continues to rise due to the growth of bitcoin mining activities, Paraguay’s power grid could collapse as early as 2029. The union proposed diversifying the nation’s energy sources and reducing dependence on hydroelectricity.

Bitcoin Mining Demand Might Spur Energy Collapse in Paraguay by 2029

Paraguay, a country that has faced an intense influx of cryptocurrency mining companies seeking to take advantage of cheap hydroelectricity, might be facing difficulties due to the increase in these activities.

According to the Paraguayan Industrial Union (UIP), if the demand keeps increasing and there is no increase in power generation, the collapse might be slated to happen as early as 2029. Julio Fernández, head of the Center for Economic Studies of the UIP, raised the alarm about how the demand has grown exponentially over the last years.

Fernandez stated:

Itaipu and Yacyreta are no longer enough. We’re consuming more than one Itaipu turbine per year.

Paraguay’s electricity is generated almost entirely by the Itaipu dam, which produced 83.879 TWh in 2023. Nonetheless, the dam was constructed on the border between Brazil and Paraguay, and is operated jointly with the former, which also purchases electricity from Paraguay’s operation.

Even with this giant power source, the UIP believes a breaking point is coming fast. “We’re very short on time. If we don’t act now, a blackout is coming,” Fernandez assessed, alerting authorities to take measures before this happens.

One of UIP’s proposals to avoid this collapse is to take advantage of the Argentine natural gas export deal with Brazil to provide passage and build power infrastructure designed to take advantage of this power source.

“Paraguay could earn $400 million annually from tolls alone. A thermoelectric plant would also supply the country and sell surpluses to Brazil,” Fernandez concluded.

Even with its hostile mining policies, hiking energy prices for bitcoin mining, the Paraguayan government has attracted companies like Hive Digital, which expects to increase its capacity by 400% after finalizing its 200 MW site.

Read more: Hive Digital Doubles Down on Paraguay Bitcoin Mining Expansion