Ethiopia Cuts Bitcoin Mining Power by 75 Percent

Ethiopian Electric Power (EEP) has cut electricity deliveries to Bitcoin miners by 75%, leaving operators with just 23% of their contracted power supply following a severe drought [1, 3]. The move forces a major pivot for the nation’s mining sector, which had grown to consume roughly one-third of the country’s total electricity production while serving as the utility's largest revenue source [1, 2].

The shift from surplus to scarcity

Ethiopia’s emergence as a Bitcoin mining hub was built on the availability of inexpensive hydropower, which accounts for roughly 95% of the nation’s electricity generation [1, 2]. Miners were attracted by rates of approximately 3.2 cents per kilowatt-hour and the ability to pay in foreign currency, a deal that helped EEP record its first profitable year [1, 3]. However, the El Niño weather phenomenon has reduced inflows into the country’s 21 dams by at least 20%, straining a system where the Grand Ethiopian Renaissance Dam alone provides roughly 52% of national power [1, 3].

With about half of Ethiopia’s population still lacking basic electricity access, the government has prioritized domestic households and strategic industries over crypto operations [2, 3]. EEP CEO Ashebir Balcha confirmed the cuts were a deliberate, pre-emptive measure to manage the energy deficit [3]. While miners previously held contracts guaranteeing at least 98% of their agreed power, they are now receiving less than a quarter of that volume [1, 3].

Financial and operational impact

The scale of the energy consumption involved is significant; mining a single Bitcoin in Ethiopia requires an estimated 6.4 million kilowatt-hours, equivalent to the annual electricity usage of nearly 15,000 average local households [2, 3]. Last year, mining companies paid 50.37 billion birr to EEP, outperforming all other customer segments [3]. The sudden reduction in power availability threatens the viability of the 31 mining companies currently operating in the country, including major entities like Phoenix Group, Canaan, and Bitdeer [1, 2].

While Ethiopia represents only about 2.4% of the global Bitcoin hashrate—roughly 23 exahash per second—the policy shift highlights the vulnerability of mining operations that rely on sovereign hydro-subsidies [1]. EEP has already lowered its electricity-export revenue forecast by 40% to $279 million as it struggles to balance commercial mining revenue against domestic energy needs [1].

What to watch

• October reassessment: EEP is scheduled to review reservoir levels and power allocation in October, which will determine if further cuts to miners or restrictions on electricity exports are necessary [1, 3].
• Hydrological recovery: Monitoring inflows into the Grand Ethiopian Renaissance Dam and other key reservoirs will be the primary indicator for whether miners regain access to their full contracted power [1, 2].

The current situation underscores the fragility of using sovereign hydropower as a structural base for energy-intensive industries. Whether Ethiopia’s mining sector remains a viable destination depends entirely on whether the upcoming rainy season can replenish the reservoirs that sustain the national grid.