Ethiopia Slashes Bitcoin Miner Power to 23% Amid Hydropower Crisis

Ethiopia's state-owned power utility has cut electricity delivered to Bitcoin miners to just 23% of contracted levels as severe drought conditions strain the country's hydroelectric capacity. Ethiopian Electric Power (EEP) CEO Ashebir Balcha told Bloomberg on Tuesday that deliveries were first reduced to 75%, then eased to 50%, before falling to the current 23%. The cuts come after El Niño intensified dry conditions in east Africa, reducing water inflows into Ethiopian reservoirs by 20%. EEP said it is prioritizing households and manufacturers, and could impose further reductions or restrict electricity exports to neighboring countries when conditions are reassessed in October.

Despite the supply constraints, Bitcoin mining remains a significant revenue driver for EEP. Miners accounted for 35% of the utility's revenue last fiscal year and consume nearly one-third of Ethiopia's total electricity output. The country's inexpensive hydropower has attracted major international operators, including Phoenix Group, which expanded its Ethiopian mining capacity to 132 megawatts in April 2025. Ethiopia's situation illustrates the growing tension between energy-hungry crypto mining operations and national infrastructure priorities as climate volatility affects power generation.

The broader economics of Bitcoin mining are also under mounting pressure. Economist Saifedean Ammous, author of 'The Bitcoin Standard,' noted in a Tuesday X post that global Bitcoin mining electricity consumption and capital expenditure may have peaked in 2024 to 2025. With Bitcoin down more than 35% over the past 12 months and halvings continually cutting miner rewards, Ammous argued that prices would need to climb roughly 18.92% annually just to maintain the dollar value of newly mined coins. Public miners, facing weaker mining economics, are increasingly pivoting toward artificial intelligence data centers as an alternative way to monetize their power and infrastructure investments. Citing VanEck data, Miner Weekly estimated in June that public miners could require around $50 billion to develop their planned AI infrastructure.