As early as January 2020, the shutdown of the Enguri HPP due to rehabilitation works plunged Abkhazia into a deep energy crisis. The situation could not be improved even after the completion of the works. The system of importing electricity from the Russian Federation failed and the energy crisis remains an unresolved challenge for the de facto authorities.
What creates the electricity shortage in the Abkhazian power system? The simplest explanation for this problem is the Bitcoin mining farms. The free supply of electricity to Abkhazia from the Georgian power system, in particular from the "shared" Enguri HPP, has prospered this sector of the shadow economy and turned it into a real disaster for the region. In addition to the fact that the amount of electricity consumed by mining farms causes a supply collapse and imposes an immeasurably large social burden on ordinary consumers, it also hinders the production and expansion of other types of economic activities.
The de facto authorities of Abkhazia offer the public nothing but shutting down the Bitcoin mining farms to address this challenge. However, the above does not seem to be successful. The population of Abkhazia is still supplied with electricity on schedule and even the proper observance of the schedule is problematic. It seems that this issue cannot be remedied by police methods. It is easy to move the infrastructure and equipment needed for Bitcoin mining from one place to another. The ban in this regard, even if effective in a particular case, is generally not effective. No matter how many mining farms the de facto law enforcement agencies of Abkhazia close, the actors involved in this shadow sector can always set up alternative farms.
The given situation exposes the corrupt side of the energy crisis. On the one hand, the power institutions are unable to regulate the illegal business of bitcoin production due to the flexibility of this sector, and on the other hand, the corrupt factors of such flexibility become impossible to be addressed for the de facto authorities. Due to the scale of corruption, the proceeds from the bitcoin production are divided between the owners of this illegal business and representatives of the de facto authorities and its law enforcement agencies.
In addition, this situation highlights the varied role of the Russian Federation in the energy crisis. On the one hand, Russia undertakes to assist its protégé de facto government in securing Abkhazia's energy supply and there is the principle of energy co-financing for this. Due to the failure to manage the energy system, Abkhazia is not able to fulfill its share of responsibility, in particular, it is not able to ensure that the consumed electricity is paid off, nor does the Russian Federation undertake to allocate money from its budget. In addition, privatization of the power supply network is on the agenda, which seems to be in Russia's interests, but is delayed by the de facto government of Abkhazia. Currently, the Abkhazian power system is managed by the so-called “Chernomorenergo” - a closed state-owned joint-stock company, which is reportedly planned to be bought by Russia. However, before that, the de facto authorities of Abkhazia, plunged into an energy crisis, are unlikely to find a solution or get a promised full gasification project that would alleviate the social cost of the crisis.