Ethiopians question electricity demand, consumption despite crypto mining boom
Ethiopia is seeing an increase in electricity problems related to cryptocurrency mining as the country’s crypto industry grows. According to reports, the cryptocurrency mining and data center sector in Ethiopia is expected to consume a third of all electricity by 2025.
The forecast raises concerns about the distribution of energy resources in a country where approximately half the population still lacks access to reliable electricity.
According to the recently published Ethiopian Energy Outlook 2025, electricity demand from crypto centers will exceed eight terawatt hours (TWh) this year, accounting for about 30% of total national consumption. The report was prepared by state-owned companies and the country’s Petroleum and Energy Authority, which expressed doubt about the viability of such a use of resources.
Ethiopia's energy sector outlook in 2025 is alarming
While cryptocurrency mining operations have been seen as a way to exchange currency and build digital infrastructure, the significant energy footprint they leave has sparked debates about fairness and efficiency. At the same time, Ethiopia’s electrification efforts have been slowing down despite the country’s many goals and massive infrastructure projects.
“Given the tight supply-demand balance, the question remains whether electricity could be used more efficiently for export, general electrification or other productive purposes such as pumping water in the water and agricultural sectors, where diesel generators are widely used,” the report says.
According to the report, the National Electrification Framework (NEF) has connected around 2.2 million households to the grid over the past five years up to 2024. However, almost 50% of the population still does not have access to reliable electricity, and only 22% have a legal connection to the grid based on meter readings.
The report also highlights that slow growth in access to electricity has become one of the factors that has hampered economic development, reducing the potential benefits of reforms in other areas. “Addressing this challenge requires increased investment in infrastructure and creative solutions to expand energy access in underserved areas. Appropriate tariff and exchange rate reforms are expected to help address the lack of resources for electrification, which is one of the main obstacles to its progress,” the report says.
Although the 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. The introduction of cost-reflective tariffs will provide the EAEU with resources for new connections, making large-scale electrification more feasible,” the forecast notes.
Critics urge government to focus on essential services
The report also points out that while the electrification rate in Addis Ababa is around 93%, regions such as Afar and Somalia remain below 12%. There is also active discussion of increasing electricity tariffs by up to 400% by 2028 under the new cost-reflective pricing regime under NEP 3.0.
Analysts predict that rising prices will lead to a reduction in cryptocurrency mining activity, which currently benefits from low electricity rates and tax regulations.
While crypto mining offers opportunities for foreign direct investment and uses 98% of Ethiopia’s renewable energy, critics say its development amid the country’s electricity crisis could undermine broader development goals. Some 15 million households are still waiting for their first connection to the grid, according to the report.
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 farmers rely on diesel pumps for irrigation, needs to rethink energy distribution. They also urged policymakers to consider the trade-offs between developing digital infrastructure and providing essential services.
Source: cryptonews.net
