Ethiopia Cuts Electricity Allocations to Bitcoin Miners Amid Water Shortages

Ethiopia has reduced electricity deliveries to bitcoin miners by 75% as El Niño-related weather conditions cut reservoir inflows by approximately 20%, placing pressure on the country’s hydropower system.

Miners Receive Only a Fraction of Contracted Power

Following the reduction, bitcoin mining operators are receiving about 23% of the electricity covered by their contracts, according to the reported figures. The cuts reflect concerns over lower water availability for hydropower generation, which supplies most of Ethiopia’s electricity.

The development threatens to disrupt mining operations that have expanded rapidly in Ethiopia because of the country’s comparatively low-cost electricity and abundant hydropower resources.

Mining Industry Became a Major Utility Customer

Bitcoin miners had become one of Ethiopian Electric Power’s largest customer groups. The industry reportedly consumed roughly one-third of the utility’s electricity while contributing approximately 35% of its revenue.

That dependence has created a difficult balance for the state-owned power provider. Mining revenues have supported the utility, but the sector’s substantial electricity demand has also increased its exposure to fluctuations in water availability and power generation.

Hydropower Constraints Put Expansion Under Pressure

The reduced reservoir inflows linked to El Niño have highlighted the risks facing energy-intensive industries that rely on Ethiopia’s hydropower network. Prolonged or recurring water shortages could limit the country’s ability to maintain current mining activity while meeting electricity needs elsewhere.

The extent and duration of the restrictions will depend on reservoir levels, future rainfall and the power system’s ability to balance industrial demand with broader electricity requirements.