Georgia is preparing a large-scale electricity metering operation across Mestia municipality, the high-mountain seat of medieval Upper Svaneti, to choke off the illegal crypto mining that has been draining its power grid. Deputy Prime Minister Mamuka Mdinaradze, who also serves as state minister for law enforcement coordination, announced the plan at a June 1 briefing and pointed to a consumption gap that is hard to explain any other way: Mestia burned through 133 million kilowatt-hours in 2025, while comparable municipalities stay under 10 million.
The numbers describe a problem the state helped build. Mestia’s electricity is free, a subsidy meant to keep an isolated region populated, and that free power is precisely what made the town worth wiring with mining rigs.
The Consumption Gap Behind the Meter Order
The headline figure does most of the arguing. A municipality of fewer than 10,000 residents, tucked under the Caucasus peaks and reachable by one winding road, somehow drew more than 13 times the electricity of similar-sized districts last year. Tbilisi says there is no legal economy in Svaneti large enough to account for that, and it has concluded the difference is being shoveled into computers solving hashes for bitcoin and other coins.
Officials plan to install meters at both the household level and across whole villages and settlements, so they can trace where the load actually disappears. Law enforcement agencies have been told to back the rollout and to act on cases of illegal use.
- 133 million kWh – Mestia’s electricity consumption in 2025
- Under 10 million kWh – the typical draw of comparable Georgian municipalities
- GEL 20-25 million (about $7 million to $9 million) – the annual damage to the system that the government attributes to the load
- About GEL 1.5 – the extra amount every electricity subscriber in Georgia is said to pay because of it
Why Mestia’s Grid Keeps Going Dark
The pressure is not theoretical. The distribution company Energo-Pro Georgia has warned that Svaneti is heading toward an energy collapse, and its own data is blunt: in April, Mestia alone consumed as much electricity as 15 Georgian municipalities combined. Consumption across the region rose about 7% in 2025 over the prior year, overloading lines and lengthening the emergency shutdowns that hit homes and hotels at the worst time of year.
By the company’s estimate, the network would need consumption cut by 10 to 12 times to run stably. That is the size of the hole illegal mining has opened in a grid that was never built for industrial load. Winter is when it bites hardest, because the natural gas network does not reach these altitudes and electricity is the only practical way to heat a house.
Mdinaradze framed the operation as non-negotiable and warned that anyone blocking the meters would face consequences. A separate government review elsewhere has reached the same general conclusion about mining loads, and a government study of crypto mining and the electricity sector documents how concentrated rigs can swamp local distribution faster than utilities can respond.
We call on everyone to respect this process. Any obstruction and violation of the law will be followed by strict legal action.
That was the deputy prime minister at the June 1 briefing, signaling that the metering drive comes with police backing rather than a polite request.
The Free Power That Wired the Mines
Here is the part the crackdown talk skips over. Upper Svaneti gets its electricity for nothing, a benefit the government has fully covered to slow depopulation in a remote corner of the country and to give its roughly 9,000 residents a reason to stay and build a tourism economy. Other high-mountain regions get half their tariff paid. The rest of Georgia pays full freight.
Free, unlimited power in a cold climate is a gift to a household. It is also an irresistible input cost for anyone running machines that do nothing but consume electricity. When the marginal cost of running another rig is zero, the only ceiling is how many you can plug in before the line trips.
Georgia made itself attractive to miners long before Svaneti did. Through the mid-2010s the country became a global hub for the business, drawing large operators such as BitFury and Bitforx with easy registration rules and cheap hydropower. The mountains offered something even those firms could not match anywhere else: a tariff of zero. To grasp why that matters, it helps to look at the global scale of bitcoin mining’s electricity demand, which runs to tens of terawatt-hours a year and chases the lowest power price on earth.
A Crackdown Georgia Has Run Before
The state has marched up this hill at least twice. Each time the mining came back, because the incentive never moved. The pattern is worth laying out in order, because the 2026 meters are the third act of a story the same villages have already lived.
- Mid-2010s: Georgia turns into a worldwide mining destination, and Svaneti’s free electricity pulls in smaller operators that the big commercial farms cannot beat on cost.
- 2019: Energo-Pro and police go house to house disconnecting illegal miners and take offline equipment worth about 5 million lari. Managers at the Enguri facility, which feeds the region, report supply jumping to 27 megawatts from 7 megawatts within a few months.
- December 2021: Around 200 residents gather in the medieval St George church in Mestia to swear on the saint’s ancient icon that they will never mine cryptocurrency. One of the priests present later admits he had been mining too, and asks for forgiveness.
The Enguri dam is no small player to be straining. With an installed capacity near 1,300 megawatts, it supplies more than 40% of Georgia’s electricity, and a slice of an entire municipality’s draw vanishing into rigs is the kind of distortion that shows up at national scale.
Who Pays for the Hidden Load
Start with the obvious victims. Residents lose power in midwinter, and the guesthouses that Svaneti’s tourism push was supposed to nurture lose guests when the lights and heating cut out. The subsidy was meant to keep people on the mountain; the mining it enabled is now one of the reasons life there gets harder each cold season.
Then there is the bill that lands far from Mestia. Tbilisi puts the damage to the system at GEL 20-25 million a year and says the cost is socialized across the country, with each subscriber paying about GEL 1.5 more than they otherwise would. A household in a flat in Batumi is, in effect, helping fund the cheap power feeding someone else’s rigs in the highlands.
That spreading of cost is the quiet mechanic of the whole episode, and it is not unique to Georgia. Utilities elsewhere have run into the same problem, where a cluster of miners chasing subsidized or stranded power leaves ordinary ratepayers covering the strain. The pattern of how mining loads strain regional power systems repeats wherever electricity is priced below its true cost.
The mayor of Mestia has backed the meters, arguing the region cannot develop while its own grid keeps failing under a load nobody officially admits to running. For a local leader, supporting a crackdown on free power is not a small thing to say out loud.
What the New Threshold Changes
The fix is not to cancel the subsidy. It is to cap it. Residents will keep getting electricity free up to a set ceiling, and anything drawn above that line gets billed at the regular tariff. The meters are what make the ceiling enforceable, because without measurement, an unlimited free allowance and a capped one look identical on paper.
| Region | Subsidy until now | Under the new approach |
|---|---|---|
| Upper Svaneti (incl. Mestia) | 100% covered, no usage cap | Free up to a threshold, tariff above it |
| Other high-mountain regions | 50% of tariff covered | Subsidy retained, metering tightened |
| Rest of Georgia | Full tariff paid | No change |
The design quietly fixes the original flaw. A free allowance sized to heat a home and run appliances is generous for a family and useless for a mining operation that needs steady industrial draw around the clock. Push past the threshold and the economics that made Svaneti attractive disappear, because the rigs would suddenly be paying full price like everyone else.
Whether it holds depends on enforcement, and Georgia has watched this load come back before. If the meters go in, the threshold sticks, and police follow through on the cases they find, Mestia’s winters get more reliable and the country stops subsidizing other people’s hash rate. If the political will fades once the cameras leave, the mountain has already shown what happens next.
