Ethiopia halts new crypto mining power permits to protect the grid, prioritizing domestic energy access over foreign mining expansion.
Ethiopia has announced it will stop giving new electric power permits to cryptocurrency mining companies. This decision was made by Ethiopian Electric Power (EEP). This shift is prompted by the increasing alarm over the power grid system and the energy sustainability of the country.
Crypto Mining Consumes 27% of Ethiopia’s Electricity
cheap electricity that mostly comes as a result of hydropower generation facilities such as the Grand Ethiopian Renaissance Dam (GERD), which attracted many companies. In Ethiopia, 25 Bitcoin mining firms have established operations in the country. Almost 20 additional were awaiting permits before the announcement of the freeze.
EEP previously tried to attract crypto miners to buy surplus power, called stranded power, which is unused during low demand. They sold this energy in foreign currency to increase national income.
Reports show that crypto mining currently consumes about 27 percent of the total amount of electricity in Ethiopia. This is too much, according to many critics. They argue that although it is improving the fortunes of foreign firms, millions of Ethiopians, particularly in the rural setting, continue to lack access to electricity on a regular basis.
This moratorium on new mining licenses brings out a greater problem in Africa. Nations that have strong renewable energy tend to have trouble fulfilling the local demand. In the case of Ethiopia, although hydropower is on the rise, the national grid continues to experience difficulties at peak hours and in dry seasons. EEP responded, “The challenge is how to use renewable energy to bring about a constant supply that is affordable to all.”
Ethiopia Halts New Crypto Mining Permits to Protect Power Grid
Other African countries, such as Kenya and Ghana, where crypto mining is also growing, are following the decision on the front pages. This experience of Ethiopia can make other countries more careful in striking a balance between economic gains and energy demands of the people.
Related Reading: Ethiopia Uses Grand Renaissance Dam to Boost Bitcoin Mining | Live Bitcoin News
While the government will not issue new crypto mining permits for now, it will allow existing operations to continue. This pause gives officials time to redesign how the country distributes its electricity and who should get priority.
Meanwhile, Ethiopian Electric Power (EEP) released its latest performance report. Last year, the company earned 75.4 billion birr, mainly from electricity sales. The distribution of electricity was as follows: households received 60%, crypto miners used 27%, industries took 6%, and 7% was exported to neighboring countries. Additionally, Ethiopia earned $118 million from electricity exports to Kenya, Djibouti, and Sudan.
The GERD project is likely to assist even more. By the time it is in full operation, it will contribute more than 5,000 megawatts to the grid. Soon, Ethiopia will also start exporting power to Somalia and South Sudan.
But the electricity coverage is just reaching one-half of the population after such improvements. According to the government, there is a need to invest more in transmission lines to access a larger number of people.
Ultimately, the actions of Ethiopia to ban crypto mining licenses indicate its priority of attention and energy equity at the national level. Because the country is expanding its power capacity, there is an effort to have all the citizens benefit, not just the corporations, in relation to the country’s power.
