Electricity theft by Bitcoin miners is racking up costs worth hundreds of millions of dollars, but one company is looking to change that. Tenaga Nasional Berhad (TNB), Malaysia’s national utility regulator, has a few ideas on how to tackle this problem – namely, to impose special tariffs upon BTC mining operators to counter the increasingly costly electricity theft.
The regulatory body also proposed that miners in the country should apply for a legal electricity supply license, which may better help track and regulate activity by miners. Let’s explore this crisis along with everything else TNB is doing to curb said crisis.
Illegal crypto-mining steals electricity
Bitcoin mining is an extremely energy-intensive process that is typically regarded as environmentally unfriendly (although more renewable solutions are slowly being developed). Despite this, mining isn’t inherently illegal in Malaysia. Rather, the problem the nation faces lies with miners that are tampering with meter installations, bypassing the meter completely, or leveraging illegal electricity connections to circumvent the heavy energy costs inherent in the Bitcoin creation process.
The exponential growth of Bitcoin over the past few years has led to a correlative increase in this kind of illegal mining. The Malaysian Anti-Corruption Commission (MACC) reports that these cases have surged from 610 in 2018, to 7,209 in 2021, resulting in a loss of $550 million ($755 million AUD).
However, these illicit operations have consequences that extend far past the bottom line of energy companies, and in fact, impact Malaysia’s general public. Speaking on this crisis is TNB’s President and Chief Executive Officer Baharin Din:
“The irresponsible perpetrators are doing it at the expense of the security and reliability of supply for the public at large. Unauthorized electricity connections can also be fire hazards… In addition, the (electricity) volume these illegal miners have been tapping was also way too high and detrimental to everyone.”
What is Tenaga doing about this?
Tenaga has been working with several state agencies in order to apprehend power thieves, including Malaysia’s anti-graft body, the police, the Energy Commission, and local councils. This team-up has led to the confiscation of illegal Bitcoin mining equipment worth RM54 million ($17M AUD) along with 18 individuals arrested.
Paul Lim Pay Chuan, managing director of Malaysian electrical power company Pestech International Bhd, believes that technology can be a valuable solution for this crisis.
“Implementation of the likes of smart metering, meter data management systems, analytic software and digital power quality products will greatly enhance the availability of critical power demand and supply information,” he said. “That may give the utility such up-to-date data for greater monitoring, planning, and control over the entire eco-system — which includes prevention of power theft.”
These countermeasures saw success during the latest crackdown on March 1-2. This was a joint effort between Tenaga and the Klang Municipal Council, in which Tenaga’s meter readers detected the abnormalities in electricity readings, allowing the local authorities to move in faster. South Klang OCPD Asst Commissioner Cha Hoong Fong said: “We carried out raids on three premises in Bandar Puteri and Bayu Perdana, arrested 12 men, and seized RM65000 worth of cryptocurrency machines.”
Tenaga has announced that going forward, anybody involved in the theft of electricity could be fined up to RM100,000 ($33,000 AUD), or imprisoned for up to ten years.