Pakistan Plans to Redirect 2,000 MW of Idle Electricity to Bitcoin Mining to Ease $7.4B in Annual Energy Losses.

Rapid solar adoption and unused power capacity push government to explore crypto mining as a new revenue stream.

Pakistan is considering allocating up to 2,000 megawatts (MW) of electricity to bitcoin mining and AI data centers, merging the government's initiative to reduce massive annual energy losses with the nation's rising interest in cryptocurrency.

This move, which is still in the planning stages and has no set timeframe, could become a crucial part of Pakistan's broader strategy to manage its long-standing energy crisis.

The South Asian nation has an installed electricity capacity of 46,600 MW but consumes an average of only 25,000 MW, with winter lows falling to 12,000 MW.

Despite this unused capacity, for which many of these plants continue receiving capacity payments, rendering them a major drain on the national budget.

These payments, which are fixed and paid whether electricity is generated or not, have now reached around $7.4 billion a year, heavily burdening the national budget and increasing electricity costs for citizens.

At the same time, Pakistan has seen a rapid influx of solar energy. In 2024 alone, net-metered solar capacity surged from 1.3 GW to nearly 4.9 GW, fueled by an influx of over 17 GW of low-cost Chinese solar panels.

While a cleaner energy alternative, this solar energy has brought new issues like grid instability and unbalanced cost distribution, non-solar users now pay higher energy rates, and poorer households struggle to access affordable energy solutions.

To address this growing imbalance, the government has floated the idea of using idle power for bitcoin mining.

This proposal suggests that crypto mining could absorb excess electricity during off-peak times, reducing pressure on the grid and generating digital revenue. This revenue could help offset the huge losses from capacity payments and offer a new income stream for the state.

However, the plan has faced criticism over its potential impact on the environment and the distribution of wealth.

Running old, inefficient power plants just to mine bitcoin could increase air pollution and carbon emissions, going against global efforts to combat climate change and potentially creating local environmental concerns.

Additionally, some worry that the money made will not truly benefit ordinary citizens and could instead end up in the hands of private companies securing bitcoin mining licenses.

If Pakistan can pull this off, it could become a rare example of using crypto mining to solve a real economic problem.

The success of the plan will depend on how it is managed and whether the benefits are shared fairly.

If not, then this could turn into a large-scale fiasco, squandering public funds and setting back the country economically and environmentally.