Ethiopia Slashes Power to Bitcoin Miners by 75% Amid Water Shortage

Key Facts

In a move highlighting the climate risks facing cryptocurrency infrastructure, Ethiopia has reduced electricity deliveries to bitcoin mining companies by 75%. According to reports, miners are left with only 23% of their contracted capacity after the El Niño weather pattern reduced reservoir inflows by approximately 20%. These measures come as the state utility prioritizes domestic needs over industrial mining operations.

This decision reflects a significant financial challenge for Ethiopian Electric Power, as miners currently consume roughly one-third of the country's total electricity and contribute about 35% of the utility's revenue. Despite this high financial contribution, falling water levels in dams—including the Grand Ethiopian Renaissance Dam—have cut generation by as much as 50 megawatts per unit. Per market data, this disruption impacts a growing mining hub that has attracted major players like Phoenix Group and Bitdeer.

From a global network perspective, Ethiopia represents a low single-digit share of total computing power (hashrate), limiting the likelihood of a systemic Bitcoin network crisis. However, investors should watch the sustainability of mining operations in regions solely dependent on hydroelectric power. In the absence of updated instrument price data, focus remains on the duration of El Niño and its future impact on electricity export revenues, which have already seen their forecasts slashed.