Ethiopia Cuts Bitcoin Miners’ Power by 77% Amid Hydropower Shortage
Ethiopia has reduced electricity supplied to Bitcoin miners to just 23% of contracted levels amid a hydropower shortage caused by reduced water inflows into reservoirs. Ethiopian Electric Power (EEP) has progressively cut power deliveries—from 75% to 50%, then down to 23%—prioritizing households and manufacturers due to intensified dry conditions attributed to El Niño. The company plans to reassess the situation in October and may further reduce supply or restrict electricity exports to neighboring countries.
Reasons for Power Cuts to Miners
According to Bloomberg, intensified dry conditions due to El Niño in East Africa have decreased water inflows to Ethiopia’s hydroelectric reservoirs by 20%. This has forced Ethiopian Electric Power (EEP) to limit electricity deliveries to Bitcoin mining firms in order to prioritize supply for households and industrial users.
EEP CEO Ashebir Balcha explained that power supplied to miners was initially reduced to 75% of contracted levels, then progressively cut further to 50% and finally down to 23%. The company plans to reassess the situation in October, with potential for additional cuts or restrictions on electricity exports to neighboring countries.
Bitcoin Mining’s Role in Ethiopia’s Energy Consumption and Economy
Bitcoin miners accounted for approximately 35% of EEP’s revenue in the last fiscal year, while consuming nearly one-third of Ethiopia’s total electricity output.
The country’s inexpensive hydropower has attracted international mining groups including Phoenix Group, which expanded its Ethiopian mining capacity to 132 megawatts as of April 2025.
Global Bitcoin Mining Trends: Impact of Halvings and AI
Economist and author Saifedean Ammous, in a post on X, stated that global Bitcoin mining electricity consumption and capital expenditure might have peaked in 2024 to 2025.
He detailed that Bitcoin’s price needs to rise more than 18.92% annually just to maintain growth in the dollar value of newly mined coins, considering Bitcoin’s built-in halving mechanism which reduces mining rewards by half about every four years.
With Bitcoin’s price down more than 35% over the past year and growing competition from artificial intelligence data centers, Bitcoin mining is expected to slow or contract. Miner Weekly, citing VanEck data, estimated in June that public miners may require roughly $50 billion to build planned AI infrastructure, diverting capacity from cryptocurrency mining.
Outlook and Potential Changes
Ammous emphasized that his conclusion is a testable hypothesis; a significant increase in Bitcoin transaction fees or a sustained recovery of mining electricity consumption above previous peaks could invalidate his outlook.
Why it matters
This news highlights the impact of climatic and economic factors on Bitcoin mining in a developing African country reliant on inexpensive hydropower. Power restrictions for miners are driven by drought conditions and the need to prioritize electricity supply for households and industry, illustrating mining’s vulnerability to external resource constraints. Moreover, the economist’s insights point to broader global trends of decelerating mining growth due to halving events and increasing competition from artificial intelligence infrastructure. It reflects a complex transition in the industry where technological and environmental challenges shape the economic viability of Bitcoin mining.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
Open original source ↗