Ethiopians question demand and power consumption despite crypto mining boom

Ethiopia has seen a rise in power concerns attributed to crypto mining activities amid the boom in the country’s cryptocurrency industry. According to reports, the crypto mining and data center industry in the country is expected to consume a third of the country’s electricity supply in 2025.

This forecast has raised issues about the allocation of energy in a country where half of the population still lacks access to reliable power supply.

According to the newly released Ethiopian Energy Outlook 2025, electricity demands from crypto-related data centers will exceed eight terawatt hours (TWh) this year, which is equivalent to about 30% of the total national demand. The report was created by the state-owned firms and the Petroleum and Energy Authority in the country, questioning whether such usage is appropriate.

Ethiopia’s energy outlook for 2025 report raises concerns

While crypto mining operations have been seen as a means of foreign exchange and digital infrastructure, the massive energy footprint they generate has sparked debates over equity and efficiency. There has also been slower progress in electrifying Ethiopia despite the numerous targets and large-scale infrastructure programs carried out in the country.

“Since the demand and supply balance is tight, it remains an open question whether the power could be better used for export, general electrification or other productive uses, like pumping of water in the water and agriculture sector, where diesel generators are used to a wide extent,” it reads.

According to the report, under the National Electrification Program (NEF), about 2.2 million households were connected to the grid in the last five years, leading up to 2024. But still, nearly 50% of the population does not have access to reliable electricity, with only 22% having legal metered grid connections.

The report also warns that the slow expansion of electricity access has been one of the factors hindering economic development, reducing the potential benefits of other sector reforms. ”Addressing this issue requires increased infrastructure investment and innovative solutions to extend energy access to underserved areas. The respective tariff and exchange rate reforms are expected to alleviate the lack of materials for electrification, one of the main barriers to its progress,” the report said.

While the current distribution only covers 25% of Ethiopia’s land area, about 68% of the population resides less than five kilometers from the grid. “This highlights the potential to triple the number of household connections within the footprint of the existing grid. Implementing cost-reflective tariffs will provide EEU with resources for new connections, making widespread electrification more feasible,” the outlook reads.

Critics urge the government to consider essential services

The report also mentioned that while Addis Ababa enjoys an electrification rate of about 93%, regions like Afar and Somali remain below 12%. There have also been talks of increasing electricity tariffs by up to 400% by 2028 under the new cost-reflective pricing regime under the NEP 3.0.

Analysts expect the price increase to reduce crypto mining activities, which currently benefit from below-market power rates and tax regulations.

While crypto mining offers direct foreign investment opportunities and taps into Ethiopia’s 98% renewable energy, critics have argued that its expansion during the national electrification crisis could affect broader development goals. According to the report, about 15 million households are still waiting for their first grid connections.

Ethiopia made a shift to embrace Bitcoin mining after the National Bank of Ethiopia (NBE) banned crypto trading in 2022. The following year, the government started registering mining firms quietly through its cyber security agency INSA, showing a move towards monetizing digital infrastructure.

According to critics, a country that struggles to provide clinics with reliable electricity and farmers dependent on diesel pumps for irrigation should reassess energy allocation. They also urged policymakers to consider trade-offs between digital infrastructure growth and essential services.