Ethiopia Cuts Bitcoin Mining Power by 77% Amid Drought-Driven Hydropower Shortages

The Ethiopian Electric Power (EEP) has drastically reduced electricity deliveries to Bitcoin mining operations in response to drought conditions. The state-owned utility, EEP, has cut power supply to just 23% of contracted levels, a significant reduction from previous curtailments.

The drought, driven by the El Niño weather pattern, has led to a 20% drop in reservoir inflows. This has forced EEP to redirect scarce electricity toward households and industrial users. The company's CEO, Ashebir Balcha, confirmed that they have no choice but to prioritize other customers.

Bitcoin miners accounted for 35% of EEP's revenue in the last fiscal year and consume close to one-third of Ethiopia's total electricity output. This concentration of mining activity has made the industry vulnerable to changes in local energy availability.

Economist Saifedean Ammous argues that global Bitcoin mining electricity consumption may have peaked, citing the halving mechanism as a key factor. According to Ammous, Bitcoin mining will continue to grow only if the expected increase in Bitcoin's market value exceeds 18.92% annually.