Ethiopian Electric Power (EEP) has ended its flat-rate electricity tariff for cryptocurrency mining. This move terminates Ethiopia's role as a low-cost hub for Bitcoin mining and forces the industry to reassess profitability. The new pricing structure takes effect on December 1, 2025.
Under the previous flat rate of 3.14 US cents per kilowatt-hour, Ethiopia attracted nearly 30 international mining firms, with an equal number awaiting licenses. The country became a major player in the global Bitcoin network, contributing an estimated 7% to 10% of the world's hashrate. Bitcoin miners now consume around 30% of Ethiopia's total electricity output.
Last year, EEP earned roughly $220 million from the mining sector, with projections of $312.5 million for the budget year ending June 2026. Some analysts forecast revenues could reach $500 million in the near future.
The new pricing replaces the flat rate with a two-tiered system: a Time-of-Use (TOU) Tariff and an Availability-Based Tariff (ABT). The baseline Daily Average rate starts at 4.00 US cents per kWh but jumps to 6.00 cents per kWh during peak hours (6:00 PM to 10:00 PM), a 91% increase from the old rate. The base rate will rise to 6.50 cents per kWh by year three, a total 107% increase. The ABT scheme ties charges to grid availability, offering discounts during curtailment but adding financial uncertainty.
Wondwosen Teshome, Director of Energy Trading and Marketing at EEP, described the overhaul as a “national necessity” driven by cost assessments, demands for financial sustainability, and grid reliability amid rising domestic consumption. He emphasized that subsidized power for miners is no longer viable.
The tariff change presents a major challenge for miners, as energy costs often comprise 80% of their expenses. Success will hinge on strategic energy use to avoid costly peak rates. While the government has not prioritized cryptocurrency investment, experts like Kal Kassa advocate for closer cooperation, including partnerships between EEP and miners on renewable energy projects. The first billing under the new tariff arrives in December 2025, marking a pivotal phase where only the most adaptable miners may thrive as Ethiopia expands its footprint in the Bitcoin network.