Ethiopia cuts Bitcoin miners’ power by 77% amid hydropower shortage: Report
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Ethiopia has cut electricity supplied to Bitcoin miners to 23% of their contracted amounts due to a hydropower shortage caused by a 20% reduction in reservoir inflows, attributed to El Niño. Ethiopian Electric Power (EEP) CEO Ashebir Balcha said power was first reduced to 75%, then 50%, before reaching 23%, prioritizing households and manufacturers over miners. Bitcoin mining accounts for about one-third of Ethiopia’s electricity consumption and contributed 35% of EEP’s revenue last fiscal year.
Why it matters
The power cut shows the vulnerability of Bitcoin mining operations to local energy supply issues, especially in regions dependent on hydropower. It impacts the miners’ operations and could affect electricity exports to neighboring countries. The development reflects broader challenges in Bitcoin mining economics amid changing environmental and market conditions.
Key context
Ethiopia relies heavily on hydropower, which has been strained by dry conditions intensified by El Niño. The country’s cheap hydropower has attracted international Bitcoin miners such as Phoenix Group, which recently expanded capacity to 132 megawatts. Bitcoin mining global electricity consumption and capital expenditure may have peaked around 2024-2025, influenced by Bitcoin’s halving mechanism and declining prices. Economist Saifedean Ammous highlighted that Bitcoin mining faces economic pressure due to rewards halving and competition from AI data centers for electricity infrastructure use.
Key numbers and entities
Ethiopian Electric Power (EEP), CEO Ashebir Balcha, Phoenix Group miner with 132 MW capacity in Ethiopia, Bitcoin mining accounts for 35% of EEP revenue, and almost one-third of Ethiopia’s electricity output. Bitcoin’s market price declined over 35% in the last 12 months. Ammous referenced VanEck data estimating $50 billion in AI infrastructure development costs for public miners.
What remains unclear
The source does not specify which Bitcoin mining operations outside Phoenix Group are affected or the exact timing and terms of future reassessments by EEP. It is unclear how the power reductions will influence Bitcoin mining output or the local economy long term, and whether mining companies will shift operations internationally or diversify energy sources. Also, the potential impact on electricity exports to neighboring countries is not detailed.