Ethiopia Cuts Bitcoin Miners’ Power Supply to 23% as Hydropower Comes Under Pressure

Ethiopian Electric Power (EEP) has reduced electricity supplied to Bitcoin and data-mining companies to just 23 percent of their contracted volumes, as declining water inflows into the country’s hydropower reservoirs put pressure on electricity generation.

The state-owned utility initially reduced supply to mining operators to 75 percent as the dry season approached, followed by a cut to 50 percent when reservoir conditions failed to improve. The allocation has now fallen to 23 percent, according to EEP Chief Executive Officer Ashebir Balcha.

The reductions come after water inflows into Ethiopia’s major hydroelectric reservoirs declined by approximately 20 percent, according to EEP. The utility has said it is prioritising electricity supplies for households and strategic industrial activities as available generation capacity comes under pressure.

Further Cuts Remain Possible

EEP Communication Director Moges Mekonnen told Capital that the utility is reassessing its electricity allocations to data-mining operators and could take further measures if the hydrological situation deteriorates.

Moges said Ethiopia could reconsider its electricity sales relationship with data-mining companies, including the possibility of terminating supply arrangements if the impact of the dry conditions intensifies.

EEP is expected to conduct a further assessment of reservoir conditions in October, which will help determine future power allocations to mining operators.

The decision places one of Ethiopia’s fastest-growing electricity-consuming industries under greater pressure while the utility manages constrained hydropower availability.

Mining Became a Major EEP Revenue Source

The power reductions are significant because data-mining companies have become an important commercial customer for EEP.

According to figures presented by EEP, data-mining operations generated Birr 50.37 billion in revenue for the utility during the past financial year, making the sector a major source of EEP’s income.

Ethiopia has attracted large-scale mining operations partly because of its relatively low-cost electricity and substantial hydropower resources. EEP has agreements with 39 data-mining companies, of which 31 are currently operational, according to recent reporting.

The sector’s rapid expansion, however, has increased competition for electricity at a time when the country’s generation system remains heavily dependent on hydrological conditions.

Hydropower Dependence Exposes the Risk

Ethiopia’s electricity system is particularly sensitive to rainfall and reservoir levels because hydropower accounts for the overwhelming majority of its generation capacity.

The latest weather outlook has added to those concerns. FEWS NET reported that El Niño conditions were expected to suppress June-to-September rainfall across parts of Ethiopia, with significant rainfall deficits affecting several areas. Its July update reported rainfall deficits of roughly 40 to 70 percent of typical levels across parts of northern, eastern and central Ethiopia during June and July.

FEWS NET also noted that El Niño conditions were expected to persist into 2027, although rainfall impacts vary considerably by region and season.

For EEP, lower water availability creates a direct constraint on the amount of electricity that can be generated from the country’s hydroelectric plants.

Domestic Demand Takes Priority

EEP’s current approach effectively places data mining below households and strategic productive sectors in the allocation of constrained electricity.

The move highlights a policy tension created by Ethiopia’s emergence as a destination for energy-intensive digital operations. Mining companies have provided a significant commercial revenue stream for the power utility, but their electricity demand must now be weighed against household consumption and industrial requirements during a period of tighter hydropower availability.

EEP has also indicated that its regional electricity commitments remain a priority. Moges told Capital that the current approach is to reduce electricity allocated to data miners rather than reduce volumes supplied under existing cross-border power arrangements.

The outcome of the October reservoir assessment will therefore be important for both mining operators and the broader electricity market. If water inflows and reservoir levels remain weak, further restrictions on data-mining power consumption could follow.

Source: Ethiopian Electric Power and Capital