Paraguay has become a popular place for bitcoin mining. The country runs on nearly 100 percent renewable electricity, mostly from hydroelectric plants. That clean and cheap energy brought in miners. But it has also raised serious questions about how much the grid can handle.
Heavy Demand on Itaipu
At the Accelerating Bitcoin conference earlier this month, energy researcher Victorio Oxilia shared new figures. He said bitcoin mining operations in Paraguay consume about as much electricity as one and a half turbines at the Itaipu dam can generate. Itaipu is one of the largest hydroelectric dams in the world. Oxilia also estimated that mining now accounts for about 30 percent of all electricity consumed in the country.
The demand is hard to ignore, and not just because of today. Oxilia warned that if mining keeps growing, Paraguay could face a real energy crisis by 2029, assuming hydrological conditions stay normal. The uncertainty is made worse by the fact that current energy contracts with mining companies expire in 2027. Nobody seems sure yet whether they will be extended.
Stagnant Generation, Rising Demand
This warning is not entirely new. Julio Fernández, who heads the Center for Economic Studies at the Paraguayan Industrial Union, gave a similar warning last year. He said that if nothing changed, blackouts could be on the way.
The concern is easy to understand. Energy demand keeps increasing, but new generation capacity has basically stalled. The only major infrastructure project underway is Aña Cuá, and it will only add 135 megawatts. That is not nearly enough to cover rising demand. Analyst Cecilia Llamosas has said Paraguay would need to invest between $11 billion and $15 billion over the next 13 years to meet future demand. She also pointed out that the country has made almost no major energy investments in the last 50 years.
A Demand That Can Be Managed?
Still, Llamosas made an interesting distinction. Bitcoin mining demand is not like residential demand. Miners can turn their operations on and off depending on how strained the grid is at any given moment. That makes mining demand more flexible, at least in theory. Residential demand, on the other hand, follows a daily rhythm. People wake up, cook, use appliances, and the load rises in predictable ways. That kind of demand cannot simply be paused when the system is under stress.
So there is a possible path forward. If mining operators are willing to adjust their usage, they could actually help balance the grid, rather than break it. But that depends on how contracts are written and how much control regulators have.
Authorities Push Back
In the meantime, the government has been cracking down on illegal mining connections. There have been convictions for energy theft tied to bitcoin mining. That suggests officials are paying attention. But legal mining is still growing, and the long-term picture remains unclear.
Paraguay has an energy advantage that few countries can match. Whether it can survive the mining boom remains unclear.
