- Miners cut to 23% of contracted power
- Reservoir inflows fell 20%
- Households and manufacturers get priority
- More cuts may come in October
Bloomberg reported on Tuesday that Ethiopian Electric Power, the state-owned utility known as EEP, has reduced electricity deliveries to Bitcoin miners in stages, first to 75%, then 50%, and now to 23% of contracted levels. EEP CEO Ashebir Balcha said the utility is choosing to protect domestic demand while hydropower conditions remain under pressure.
That means households and manufacturers come first. Miners, even when they are paying customers, do not.
The reason is simple. Reservoir inflows have dropped 20%, squeezing Ethiopia’s hydropower output. Hydropower depends on water entering reservoirs and moving through turbines. When inflows fall, output gets tighter and utilities have to ration somewhere. In this case, EEP is cutting the load that can be interrupted without leaving homes dark or factories idle.
Bitcoin miners were a big load. According to Bloomberg, they consumed almost one-third of Ethiopia’s electricity output and accounted for 35% of EEP’s revenue in the previous fiscal year. That is a serious line item for any utility, especially one built around hydropower, where power availability can swing with weather and reservoir conditions.
Ethiopia became attractive to miners for exactly that reason. Cheap hydropower, large generation projects like the Grand Ethiopian Renaissance Dam, and a state utility looking for revenue created a decent landing zone for hashpower. That setup can work when the grid has room. It works a lot less well when water levels tighten and the government has to decide who gets the electrons.
EEP plans to reassess reservoir and electricity conditions in October. If conditions do not improve, further cuts are possible. The utility could also limit electricity exports to neighboring countries if domestic supply worsens. That is the ugly part of energy economics that mining bulls like to hand-wave away: the grid is not a philosophy seminar. It has obligations, limits, and very little patience when the water gets scarce.
El Niño has added to the strain by worsening dry conditions in parts of East Africa. That does not mean Ethiopia’s power system is collapsing. It does mean hydropower-heavy countries are exposed to water risk in a way that Bitcoin miners, with all their talk of portable infrastructure and surplus energy, cannot pretend away.
The cut also lands at an awkward time for miners more broadly. Saifedean Ammous, author of The Bitcoin Standard, said in a Tuesday X post that worldwide Bitcoin mining electricity use and capital spending may have peaked in 2024 and 2025. His argument is tied to the April 2024 halving, which cut the block subsidy from 6.25 BTC to 3.125 BTC per block.
The block subsidy is the new bitcoin paid to miners for adding a block to the chain. Every halving reduces that issuance income by 50%, which is great for Bitcoin’s scarcity narrative and rough on miners unless the price of BTC or transaction fees rise enough to make up the difference. The network keeps ticking either way. The balance sheets are the part that start sweating.
“Given this decline in mining rewards, it would be expected that bitcoin mining would slow down, or even contract, ” Ammous said.
“Unless there is a major turnaround in this metric, this trend may continue indefinitely.”
He described that view as a testable hypothesis. That matters. A lot of people in crypto treat strong opinions like sacred text. Ammous is at least saying: check the numbers, then judge the thesis. If transaction fees rise materially or mining electricity consumption recovers above its previous peak, his argument takes a hit. If not, the pressure he is describing remains very real.
There is also a bigger shift running alongside all this: AI and high-performance computing are becoming an alternative use for mining infrastructure. The same land, power connections, cooling, and data center shells that support Bitcoin mining can sometimes be repurposed for AI workloads or rented out to companies that want compute capacity. That does not mean every mining site can magically become an AI campus. It does mean the best operators are no longer thinking about hash rate alone.
That pivot comes with its own pile of hype, of course. “AI infrastructure” has become the new buzzword for anything that needs a better story than “we bought a lot of power and hope the market cooperates.” Some projects will be legitimate. Others will be expensive costume changes. The market usually finds the difference eventually, even if the pitch decks are wearing a nice watch.
For Ethiopia, though, the issue is simpler and more immediate. When hydropower is plentiful, miners can look like a useful source of foreign revenue and a way to monetize spare capacity. When inflows fall, they become interruptible demand. That is not an insult. It is how power systems work.
Bitcoin mining thrives on surplus energy, stranded energy, and disciplined capital. It does not get to overrule hydrology, and it does not get special treatment when a state utility has to keep the lights on for its own citizens first. The lesson here is blunt, but fair: miners can move where power is cheap, but cheap power is never guaranteed, and it is never immune to politics or weather.
Key questions and takeaways
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Why did Ethiopia cut power to Bitcoin miners?
EEP said reservoir inflows fell 20%, putting pressure on hydropower output. The utility prioritized households and manufacturers over miners as supply tightened.
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How deep were the cuts?
EEP said miner power was reduced in stages from 75% to 50%, and then to 23% of contracted levels.
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Why were miners active in Ethiopia in the first place?
Cheap hydropower and large generation projects made Ethiopia attractive to miners. EEP also benefited from the extra revenue when there was surplus power to sell.
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How important were miners to Ethiopia’s utility?
According to Bloomberg, miners consumed almost one-third of Ethiopia’s electricity output and generated 35% of EEP’s revenue in the previous fiscal year.
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Could the situation get worse?
Yes. EEP plans to reassess conditions in October, and further cuts are possible if reservoir levels do not improve. The utility could also restrict electricity exports if domestic demand tightens further.
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What does this mean for Bitcoin mining more broadly?
Mining is highly exposed to energy prices, block rewards, and local power conditions. The April 2024 halving cut issuance income, and that pressure is now colliding with competition for the same infrastructure from AI and other compute-heavy uses.
Ethiopia’s move is a reminder that mining follows power, but power follows physics, politics, and water levels. When the grid is flush, miners are welcome. When it tightens, they are just another load that can be turned down.
Further reading
For the power, policy, and mining angles around Ethiopia, these add useful context.
- Ethiopia cuts power to Bitcoin miners as El Niño strains hydropower
- Ethiopia cuts Bitcoin miners’ power by 77% amid hydropower shortage
- Cambridge study on sustainable energy rising in Bitcoin mining
- CleanSpark reports third fiscal quarter 2026 results
- Environmental impact of bitcoin
- Ethiopia freezes new Bitcoin mining permits as power capacity hits limit
- Ethiopia’s Bitcoin mining push: state power play or risky crypto gamble
- Ethiopia harnesses renewable energy for Bitcoin mining amid regulatory hurdles
