Ethiopia has cut electricity supplied to Bitcoin miners to just 23 percent of their contracted levels, after a drought driven by El Niño dropped reservoir inflows by 20 percent and strained the hydropower system that miners increasingly depend on.
By Michael Nguyen | September 24, 2026
According to Bloomberg, state-owned Ethiopian Electric Power reduced deliveries to mining operations while prioritizing households and manufacturers — a decision that shows exactly where crypto miners rank when the lights get scarce. For anyone tracking where Bitcoin’s computing power actually comes from, this is one of the most important energy stories of the quarter.
The Hook: From Full Power to 23 Percent
The cuts came in stages. EEP CEO Ashebir Balcha said the utility first lowered electricity deliveries to miners to 75 percent of their contracted amounts, then to 50 percent, and eventually to 23 percent. The utility plans to reassess reservoir and electricity conditions in October. If water levels do not improve, further cuts remain possible — and Ethiopia could even restrict electricity exports to neighboring countries if domestic supply comes under more pressure.
The trigger is El Niño, the climate pattern that has intensified dry conditions across East Africa. Ethiopia’s power grid runs mostly on hydropower, with wind and thermal generation making up the remainder. When the rains fail, the country’s generating capacity fails with them — and the newest, most flexible customers get trimmed first.
The Evidence: How Big Mining Became in Ethiopia
To understand why this matters, look at how quickly Ethiopia became a mining hub. Cheap hydropower attracted operators hunting for low-cost energy, and the industry grew to remarkable scale:
- Bitcoin miners now consume almost one-third of Ethiopia’s electricity output, according to Bloomberg.
- Mining generated 35 percent of EEP’s revenue during the previous fiscal year — a huge share for a single customer category.
- Roughly 600 megawatts of mining consumption as of October 2024, in a country with around 5,200 MW of installed generation capacity at the time, as crypto.news previously reported.
- Abu Dhabi-listed Phoenix Group expanded its Ethiopian mining capacity to 132 MW in April 2025 after adding a 52 MW facility.
Ethiopia’s rise even shows up in global energy data. Cambridge research covered by crypto.news in August found that hydropower overtook natural gas as the largest reported source of electricity for Bitcoin mining, with researcher Alexander Neumueller partly attributing the shift to better survey coverage in hydro-rich markets such as Ethiopia.
The Core Conflict: Cheap Power With Strings Attached
The mining industry’s migration to Ethiopia was an economics story: where power is cheapest, miners follow. But the same hydropower that made Ethiopia attractive also makes it seasonal. Hydro-dependent grids are at the mercy of rainfall in a way that grids running on natural gas or nuclear are not. When drought hits, miners hold interruptible contracts and get cut first — a risk that was cheap until the day it was not.
The timing is also brutal. The restrictions land while mining economics are already weakening. Economist Saifedean Ammous, author of The Bitcoin Standard, said in a post on X this week that worldwide Bitcoin mining electricity consumption and capital expenditure may have already peaked during 2024 and 2025. His argument: the April 2024 halving cut the block subsidy from 6.25 BTC to 3.125 BTC, and Bitcoin’s price would need to rise more than 18.92 percent annually just to keep the dollar value of newly mined coins growing — while Bitcoin has instead lost more than 35 percent over the past 12 months, according to Yahoo Finance data cited in the report.
“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.”
Market Implications: What This Means For Your Wallet
Hashrate — the total computing power securing Bitcoin — depends on miners staying online. When a major mining country cuts power to miners by more than three-quarters, some machines go dark or migrate. In the short term, that can ease the competition for the remaining miners elsewhere, slightly improving their economics. Over time, forced migration pushes the industry toward grids with firmer power contracts and diversified generation.
For Bitcoin holders, none of this threatens the network — Bitcoin has survived far larger shocks — but it is a reminder that mining is an industrial business exposed to weather, politics and electricity markets, not just coin prices. It also puts a spotlight on the environmental critique from a new angle: not carbon, but water. Drought-prone hydro grids and power-hungry data centers are an awkward pairing, and regulators in other hydro-rich countries will be watching how Ethiopia’s October reassessment plays out.
The Verdict
Ethiopia’s power cuts are a stress test the mining industry mostly expected but hoped to avoid. Miners built a third of the country’s electricity demand into being; now the rain decides how much of it runs. Watch the October reassessment, and watch whether other hydro-dependent mining destinations from Africa to Latin America quietly renegotiate their contracts. For investors, the lesson is portfolio thinking in energy terms: the miners best positioned for the next cycle are the ones whose power does not depend on the weather.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
23 percent of contracted power. ethiopian miners are finished, plain and simple. el nino never read the hosting agreements
Going 75 to 50 to 23 in stages is brutal, but at least Balcha gave them a ramp to unplug machines instead of a hard cutoff. Households first is the correct call.
relocated more than finished imo. those machines land in paraguay or the gulf within a quarter and global hashrate barely blips
ethiopia was supposed to be the great mining migration story and now operators get 23% of contracted power. the 75 to 50 to 23 slide is brutal
Miners eating almost a third of the national grid and people are surprised households got priority? El Nino just exposed an arrangement that was never stable to begin with.
those contracts had hydrology risk baked in the whole time, nobody read the force majeure section. cheap power was never free power
everyone cheered the cheap hydropower deals without asking what happens in a drought year. now we know. and the october reassessment could cut even deeper