Former Binance CEO Qiao Changpeng (CZ) just lately stated that the UAE generates surplus electrical energy to satisfy “three days” of excessive demand annually, making Bitcoin the final purchaser of power that might go unused.
Stripping away the main points, the logic holds that mining turns curtailed or pent-up energy into income when different off-takers don’t desire it.
The query in 2026 is just not whether or not the excess might be mined, however whether or not that surplus is structural sufficient to shrink, and whether or not miners can keep their place as AI and high-performance computing drive up the clearing value of agency provide.
Economics is simple. In keeping with the Cambridge Digital Mining Business Report, electrical energy accounts for greater than 80% of miners’ money working bills.
The report notes that the median electricity-only value is about $45 per megawatt-hour, and notes that surveyed miners shed 888 gigawatt-hours of load in 2023, which equates to about 101 megawatts of common pendency capability.
This discount determine helps the versatile load principle. Which means miners can flip off energy if the grid wants reduction or costs spike, serving to energy firms handle intermittency and congestion.
Geography tells the remainder. Although an imperfect methodology, Cambridge’s Bitcoin Energy Consumption Index Mining Map tracks the place hashrate is concentrated, however there are caveats to the info, together with a one- to three-month lag in predictions and the potential for VPNs and proxy routing to drive up the share of nations corresponding to Germany and Eire.
Nation attribution is dependent upon the geolocation of the IP deal with. This can be a methodology that’s delicate to routing habits and topic to different inference limitations.
Inside these constraints, this map reveals mining distributed throughout jurisdictions, however with one factor in widespread: It is entry to low-cost energy, stranded energy, or each.
Pakistan turns extra capability into coverage
Pakistan made the obvious guess. The federal government has introduced plans to allocate 2,000 megawatts within the first section of a nationwide initiative to be cut up into Bitcoin mining and AI knowledge facilities, and CZ has been appointed as strategic advisor to the Pakistan Crypto Council.
The Treasury framed this as a strategy to monetize surplus technology in energy-surplus areas and switch underutilized capability into tradable belongings.
Steady operation of two,000 megawatts produces 17.52 terawatt-hours of electrical energy per 12 months. Fashionable mining fleets function at 15 to 25 joules per terahash, and their energy can theoretically help hashrates of 80 to 133 exahashes per second earlier than contemplating reductions, energy utilization effectivity, or downtime.
Dimension is just not as essential as construction.
What kind of contracts will miners signal, interruptible baseload or fastened baseload? Which areas will probably be chosen and the way lengthy will the coverage final if tariffs rise or IMF stress will increase?
Pakistan’s imaginative and prescient means that “surplus electrons” may turn into a nationwide export, however whether or not the two,000 megawatts materializes as a hub or only a headline is dependent upon execution.
Surplus by design, not by probability
The UAE’s alternatives usually are not without end in surplus, however they’re in surplus by design.
Dubai’s peak demand reached 10.76 GW in 2024, a rise of three.4% year-on-year, concentrated in the summertime months when cooling accounts for a lot of the load.
The Worldwide Vitality Company (IEA) predicts that cooling and desalination will account for practically 40% of electrical energy demand progress within the Center East and North Africa by 2035, explicitly naming knowledge facilities as one other rising supply of load.
This creates particular alternatives for miners. Utilities are constructing programs to deal with summer season peaks, however require year-round monetization, normalization, and off-peak grid stability.
Miners win after they can provide extra flexibility than AI and HPC patrons, corresponding to curtailment-aware hundreds that take up energy that others can not settle for resulting from location, congestion, or dispatch constraints.
Whereas Bitcoin miners might be switched off immediately, knowledge facilities require steady operation, making discount and grid administration far more tough.
The area’s ramp-up tendencies favor baseload capability above seasonal demand, however the IEA’s similar outlook marking knowledge facilities as demand drivers means miners face direct competitors for the electrons they want.
The case for hubs will depend upon whether or not there’s sufficient worth for utilities to cost dispatchable hundreds at a beautiful value, or whether or not a agency offtake settlement with an AI purchaser will shut out mining altogether.
If a battle for surplus happens
Paraguay reveals what occurs when surplus electrical energy attracts miners, inflicting a backlash.
The nation’s hydropower capability attracted operators searching for low-cost electrical energy, however fee adjustments have come at a price. Miners are actually reportedly paying between $44.34 and $59.76 per megawatt hour in taxes, and native trade sources say 35 firms have ceased operations after the worth hike.
Legislation No. 7300 strengthened penalties for energy theft associated to unlawful cryptocurrency mining, growing the utmost penalty to 10 years and authorizing the confiscation of kit.
Regardless of this, actual capital continues to move. HIVE has accomplished Section 1 infrastructure of a 100-megawatt facility backed by a totally powered 200-megawatt substation, demonstrating that some operators are contemplating sturdy economics even after repricing.
The stress within the relationship is obvious. Hydropower surpluses generate preliminary buyer attraction, however as mining firms scale up and understand that they’re intensive, taxable off-takers, or when native grid constraints or noise externalities enhance political stress, states reprice electrical energy.
Paraguay’s trajectory reveals how hubs flip when their social license expires, making coverage sturdiness the first variable within the web site choice mannequin.
What truly makes the hub
Mining hub viability in 2026 will come all the way down to the components: supply value per megawatt hour x contract flexibility x coverage sturdiness, measured in opposition to what AI and HPC patrons are keen to pay, grid deficiencies, and overseas trade and import frictions.
Three situations are developed concerning these variables.
The primary is that the oversupply attributable to restraint will persist. Which means renewable power is added quicker than the grid can take up it, curtailment will increase, and miners revenue from versatile demand. Hubs are most probably to be jurisdictions with weak transmission, hydropower or seasonal surpluses, corresponding to Paraguay, or nations that explicitly monetize extra capability, corresponding to Pakistan.
Within the second, AI competes for energy with companies over miners. Information facilities require long-term, secure provide, leaving miners susceptible to interruptions, congestion, and stranded conditions. Hubs will emerge the place miners can entry interruptible pricing and “non-exportable” power, moderately than the capabilities of main firms.
Within the third, political retribution and backlash change the sport. As miners broaden in dimension or create shortages or noise at house, governments increase charges. Paraguay is the template. The hub is turned the other way up when the economics that attracted the miners are recalibrated by the identical state that constructed them.
The IEA framework is essential right here. World electrical energy demand is anticipated to develop at roughly 4% yearly till 2027, pushed by industrial manufacturing, air con, electrification, and knowledge facilities.
Renewable power capability additions are accelerating, however grid integration has been gradual. This delay creates throttling and congestion that miners can monetize, however it additionally signifies that surplus is a shifting goal.
The hubs that survive till 2026 is not going to solely be in jurisdictions the place energy is reasonable, but additionally the place energy cuts and congestion are prone to persist, the place rules permit mining as a dispatchable load, and the place miners can compete with or complement AI and HPC for electrons.
guidelines
Six variables decide whether or not a jurisdiction turns into a mining hub or only a headliner.
The excess kind is the primary. Is it hydro seasonality, stranded gasoline, flaring mitigation, or off-peak nuclear baseload? Every has totally different persistence and shrinkage.
Supply value and contract construction observe because the second variables. What’s the whole value per megawatt hour? Additionally, is the contract breakable? Who bears the congestion danger and is there any compensation for congestion?
Subsequent, ASIC import and logistics are essential, corresponding to customs duties, transportation lanes, spare elements availability, and capital administration, all of which affect speed-to-market and operational danger.
Coverage sturdiness is the fourth variable. Charge revision danger, licensing necessities, shock bans, and theft crackdowns will decide whether or not a hub stays a hub.
Local weather, cooling and water additionally play a task. Air cooling limitations, immersion feasibility, and warmth and noise externalities restrict the place large-scale operations might be carried out with out scary native opposition.
The ultimate variable is offtake competitors. Development in demand for AI and HPC is now clearly mirrored in energy demand forecasts. Hubs have to anticipate competitors not just for low-cost electrons but additionally for “good electrons.”
Pakistan’s 2,000 MW plan is the clearest indication that the federal government sees surplus electrical energy as an exportable asset class and mining as one technique of monetizing it.
| jurisdiction | 1) Surplus/suppression kind | 2) Supply quantity/MWh + contract construction | 3) ASIC import/logistics +FX | 4) Coverage sturdiness | 5) Local weather/cooling + water | 6) Offtake competitors (AI/HPC) |
|---|---|---|---|---|---|---|
| Pakistan | ⚠️ Extra manufacturing capability established as a coverage (“areas of power surplus”), however persistence and seasonality haven’t but been confirmed. | ⚠️ Worth and situations to be decided (Headline MW ≠ $Delivered/MWh; key’s Interruptible vs Confirmed + Discount Compensation) | ❌ Chance of overseas trade/import friction (capital controls, transportation/customs uncertainties) | ⚠️/❌ execution danger (Tariff coverage and IMF oversight may drive repricing or delay deployment) | ⚠️/❌ scorching local weather → Excessive cooling load/PUE except put in in a cool area | ❌ direct competitors (This initiative explicitly consists of AI knowledge facilities and will put company energy in its bidding.) |
| UAE (Dubai/GCC Lens) | ⚠️ “Design surplus” (System constructed for summer season peak → Chance of monetization throughout off-peak hours) | ❌/⚠️ Revealed costs are excessive;Mining requires particular contracts/reduction-friendly pricing for it to work | ✅ Greatest-in-class logistics (ports, spares, finance, low friction scaling) | ✅ Typically secure The surroundings is in place (nevertheless, power costs are a variable variable) | ❌ intense warmth Let cooling be the first constraint. Water/warmth externalities matter | ❌ fierce competitors (Information heart growth, miners prone to be pushed into interruptible/constrained pockets) |
| paraguay | ✅ hydro surplus draw (The richness of the Itaipu type is the core “hub” set off) | ⚠️ Nonetheless aggressive, however costs have been decreased (Obligation enhance + taxes. Financial scenario is dependent upon contract particulars) | ⚠️ Inland/Logistics Provides time/value. Manageable however not “plug and play” | ❌ Sturdiness danger (Tariff re-pricing + enforcement stress = hub might “flip”) | ✅ extra forgiving local weather than GCC. Simpler cooling profile | ✅ Reducing AI/HPC bidding stress Comparability with main metro markets (presently) |
Whether or not that path results in the subsequent main hub in 2026 will depend upon execution, together with contract phrases, web site choice, and whether or not political agreements maintain as miners start consuming gigawatt hours at scale.
CZ’s principle about Bitcoin as the customer of final resort is appropriate in precept. The apply is much more troubling, counting on energy grids that may’t take up renewable power quick sufficient, states that permit versatile hundreds, and miners that may stay aggressive as knowledge facilities drive up the worth of secure energy.
The websites that emerge will probably be people who have had these situations in place lengthy sufficient to construct infrastructure and enter into contracts that can survive the primary fee adjustments and the primary summer season energy outages.
