When enabling world regeneration the server performance is really bad (lots of lag mining ore blocks) and the heap usages grows until MC is unplayable.

Using Mekanism 1.7.10-7.0.0.70

Firstly...thanks so much for actually trying, that is still really helpful. Can you confirm that the memory doesn't rise if it isn't enabled? I'm going to run some tests of my own.

Yes, I started the game 3 times with this option enabled, each time I had to close it after ~30 minutes as it became unplayable. With this disabled (EnableWorldRegeneration=false) I had the game open for over 8 hours (I kept it running as a test) without any signs of a memory leak.

Just fixed it - there was an issue with the regen versioning system. Will be in next version :)

Mind running something like Opis or VisualVM to give me some readings of the issue?

I tried to get VisualVM running, but it didn't worked - Opis doesn't seem available for 1.7.10 yet.

The only thing I did was:
B:EnableWorldRegeneration=true
I:WorldRegenVersion=1

I allocated 3.5 GB of heap space to Minecraft, you could see the memory rising really fast.
I'm using Bevo's Techpack and removed IC2 (that is also the reason I needed the regen as I forgot to enable copper and tin before making the world).

I'll try VisualVM again tomorrow.