Ethiopia cuts Bitcoin mining power by 77% as hydropower shortage deepens
Miners lose power as dry weather hits Ethiopia's grids
Ethiopia has reduced the electricity supplied to Bitcoin miners to just 23% of their contracted amounts. The cut comes as the country faces a shortage of hydropower caused by lower water levels in its reservoirs.
The state-owned utility Ethiopian Electric Power (EEP) made the decision to prioritize power for households and manufacturers over mining operations. The cuts were part of a phased reduction that began at 75% of contracted levels and dropped to 50% before reaching the current 23%.
Key figures behind the cuts
- Bitcoin miners currently receive only 23% of the electricity they were contracted to get.
- Miners accounted for 35% of EEP's revenue in the last fiscal year.
- The sector consumes nearly one-third of Ethiopia's total electricity output.
- Water inflows into reservoirs have dropped by 20% due to El Niño dry conditions.
Official statement from utility CEO
Ashbir Balcha, CEO of Ethiopian Electric Power, confirmed that the cuts are necessary to protect domestic users. He stated that the company will reassess the situation in October. Depending on conditions, EEP could impose further reductions or restrict electricity exports to neighboring countries.
Global mining pressures mount
The Ethiopia cuts come as broader challenges face the Bitcoin mining industry. Economist and author Saifedean Ammous stated that global Bitcoin mining electricity consumption and spending may have peaked between 2024 and 2025.
Ammous noted that Bitcoin's price would need to rise more than 18.92% annually just to maintain the dollar value of mined coins, not accounting for inflation. Bitcoin's price is currently down more than 35% over the last 12 months. He added that competition from artificial intelligence data centers is also drawing away mining infrastructure.
Why this matters for the industry
Bitcoin mining relies on massive amounts of cheap electricity to remain profitable. Countries with excess energy, particularly from hydroelectric sources, have become attractive hubs for miners. Ethiopia has drawn international attention in this regard, with companies like Phoenix Group expanding their mining capacity there to 132 megawatts earlier this year.
What happens next
EEP plans to review the energy situation in October. At that time, officials may decide to lower power supplies further or limit exports.