Electricity

The miners pay the power bill, and the rains decide for how long

Warri albuudaa kaffaltii humnaa kaffalu; hammam akka itti fufu roobatu murteessa

Posted 8 Tikimt 2019 E.C. · 08:00 EAT (2:00 Ethiopian time) · Published by Ensight (Mo Creatives)

In the year to 7 July data mining companies paid Ethiopian Electric Power ETB 50.37 billion, more than the ETB 46 billion it earned from the domestic supplier. In dollars, data centers and miners brought in US$335.5 million against US$140 million from cross-border sales. Now falling hydrological inflows have cut miners from 98% of contracted supply to 23%. With hydropower about 96% of generation, the utility’s best-paying customer is also the first one the weather takes away.

The claim

Selling power to data miners has made Ethiopian Electric Power less dependent on the domestic market.

The figure that tests it

In the year to 7 July the miners paid the utility ETB 50.37 billion, more than the ETB 46 billion it earned from the domestic supplier (the cut). In foreign currency the difference is sharper: data centers and miners brought in US$335.5 million, against US$140 million from all cross-border sales (Kenya). On last year’s figures the claim holds. The miners were the utility’s largest paying customer, and they paid in dollars.

What the cut changes

Falling hydrological inflows have led the utility to cut miners from 98% of contracted supply to 23%, a reduction of 75 percentage points. Hydropower is about 96% of Ethiopian generation, so when the rivers are low there is little else to run. If billing follows supply, a large share of that ETB 50.37 billion is at risk for as long as the cut lasts; the utility has not said how much.

What it means, and for whom

For the utility, its best-paying customer is also its most interruptible, and the one the weather removes first. For the miners, supply at 23% of contract is a business running at under a quarter of its plan. For Kenya the timing runs the other way: peak exports rise from 200 MW to 400 MW from December, and off-peak from 65 MW to 150 MW, over the 1,045 kilometer interconnector.

What would change the view

The October reassessment of supply to miners; a published split of tariffs and volumes, so readers can see what the cut costs in birr; and new generation that is not hydro, which would make the miners’ supply less hostage to rainfall.

Source: Ensight, from Ethiopian Electric Power figures

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