Ethiopians question electricity demand, consumption despite crypto mining boom
Ethiopia is seeing an increase in power problems caused by cryptocurrency mining activity amid the growth of the cryptocurrency industry in the country. According to reports, cryptocurrency mining and data centers in the country are expected to consume up to one-third of the total electricity in 2025.
The forecast raised important questions about electricity distribution in a country where half the population still lacks access to reliable power.
According to the recently published Ethiopian Energy Outlook 2025, crypto data centers’ electricity consumption will exceed eight terawatt hours (TWh) this year, accounting for about 30% of the country’s total demand. The report was prepared by government agencies and the country’s Petroleum and Energy Authority, which questioned the wisdom of such a use of resources.
Ethiopia's 2025 Energy Outlook Raises Concerns
While cryptocurrency mining operations have been embraced as a way to exchange currencies and build digital infrastructure, the significant energy footprint they leave has sparked debate about the fairness and efficiency of such activities. Progress in electrification in Ethiopia has also been slow, despite the many goals and large-scale infrastructure projects underway in the country.
“Given the tight supply-demand balance, there is a need to find more efficient ways to use electricity for export, general electrification or other productive uses such as pumping water for the water and agricultural sectors, where diesel generators are widely used,” the report says.
According to data, under the National Electrification Framework (NEF), about 2.2 million households have been connected to the electricity grid in the last five years until 2024. However, almost 50% of the population still does not have access to reliable electricity, and only 22% have a formal connection to the grid, according to meter readings.
The report also highlights that the slow expansion of electricity access has become a factor holding back economic development, reducing the potential benefits of reforms in other areas. “Addressing this challenge requires increased investment in infrastructure and innovative solutions to expand energy access in underserved areas. Appropriate tariff and exchange rate reforms are expected to help mitigate the shortage of inputs for electrification, which is a major obstacle to its progress,” the report says.
While current distribution covers only 25% of Ethiopia’s land area, approximately 68% of the population lives less than five kilometers from the grid. “This highlights the potential to triple the number of household connections within the existing network. Introducing cost-reflective tariffs will provide the EAEU with resources for new connections, making mass electrification more feasible,” the forecast states.
Critics urge government to focus on essential services
The report also mentions that while the electrification rate in Addis Ababa is around 93%, regions like Afar and Somalia remain below 12%. Plans to increase electricity tariffs by up to 400% by 2028 under the new cost-reflective pricing regime in line with NEP 3.0 are also discussed.
Analysts expect rising prices to curb cryptocurrency mining activity, which currently benefits from below-market electricity rates and tax regulations.
While crypto mining offers opportunities for foreign direct investment and uses 98% of Ethiopia’s renewable energy, critics argue that its expansion amid the country’s electricity crisis could undermine broader development goals. According to the report, some 15 million households are still waiting for their first connection to the grid.
Ethiopia began mining bitcoin after the National Bank of Ethiopia (NBE) banned cryptocurrency trading in 2022. The following year, the government began secretly registering mining companies through its cybersecurity agency INSA, a move to monetize digital infrastructure.
Critics say the country, which struggles to provide clinics with reliable electricity and where farmers rely on diesel pumps for irrigation, needs to rethink its power distribution. They also urged policymakers to consider the trade-offs between developing digital infrastructure and basic services.
Source: cryptonews.net
