Key facts
- Ethiopia has reduced electricity delivered to Bitcoin miners to 23% of contracted levels.
- Water inflows into Ethiopia's hydroelectric reservoirs have dropped by 20% due to intensified dry conditions.
- EEP CEO Ashebir Balcha stated the company is prioritizing households and manufacturers.
- Bitcoin miners accounted for 35% of EEP's revenue in the last fiscal year.
- Miners consume nearly one-third of Ethiopia's electricity output.
- EEP will reassess conditions in October and may impose further reductions or restrict electricity exports.
Ethiopia has significantly reduced the electricity supply to Bitcoin miners, cutting it to just 23% of contracted levels due to a severe hydropower shortage. The country's reservoirs have seen a 20% decrease in water inflows, exacerbated by intensified dry conditions attributed to El Niño, according to a Bloomberg report.
Ashebir Balcha, CEO of Ethiopian Electric Power (EEP), stated that the utility is prioritizing electricity for households and manufacturers over Bitcoin miners. This decision comes as miners, who accounted for 35% of EEP's revenue in the last fiscal year and consume nearly one-third of Ethiopia's electricity output, face reduced supply. EEP initially cut deliveries to 75% of contracted levels, then to 50%, and finally to 23%. The company plans to reassess the situation in October and may implement further reductions or halt electricity exports to neighboring countries.
Meanwhile, economist Saifedean Ammous suggested that global Bitcoin mining electricity consumption and capital expenditure might have peaked between 2024 and 2025. He noted that Bitcoin's price would need to increase significantly annually to offset declining mining rewards due to the halving mechanism. Ammous also pointed to competition from artificial intelligence data centers as a factor encouraging miners to redirect their electricity connections and infrastructure. He posited this trend could continue indefinitely unless key metrics improve substantially.