Ethiopia is experiencing rising concerns regarding energy distribution amid the booming cryptocurrency industry. By 2025, energy demands from crypto operations may reach one-third of the country's electricity supply.
Projected Energy Consumption in 2025
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 aligns with approximately 30% of the total national demand. This raises questions about the appropriateness of such energy use in a country where half the population still lacks access to reliable electricity.
Electrification and Access to Electricity
Despite efforts for electrification, such as the National Electrification Program (NEF), only 25% of the country's area is covered by electricity, and about 68% of the population lives less than five kilometers from the grid. In the last five years, 2.2 million households have been connected, but nearly 50% of the population still does not have access to reliable electricity.
Criticism and Necessity for Reevaluation
Critics urge the government to reassess energy distribution, as regions like Afar and Somali have electrification rates of less than 12%. There are plans to increase electricity tariffs by up to 400% by 2028, which may curb crypto mining activities that currently benefit from below-market rates. Experts emphasize the need to balance digital infrastructure growth with the provision of essential services.
In conclusion, Ethiopia is at a critical juncture between fostering the cryptocurrency industry and ensuring reliable electricity access for its citizens. This conflict of interest calls for careful consideration and further discussion.
