Former Binance CEO, Changpeng Zhao (CZ), not too long ago acknowledged that the UAE generates surplus energy in an effort to cowl “three days” of excessive demand every year, making Bitcoin a purchaser of final resort for vitality that will in any other case go unused.
Stripping away the specifics, the logic holds: mining turns curtailed or stranded electrical energy into income when no different offtaker desires it.
The query for 2026 is not whether or not surplus might be mined, however whether or not that surplus is structural sufficient to contract, and whether or not miners can maintain their place as AI and high-performance computing push up the clearing worth for agency provide.
The economics are easy. Electrical energy accounts for greater than 80% of miners’ money working bills, in keeping with Cambridge’s Digital Mining Trade Report.
The identical report cites a median electricity-only price of round $45 per megawatt-hour and notes that surveyed miners curtailed 888 gigawatt-hours of load in 2023, roughly 101 megawatts of common withheld capability.
That curtailment determine helps the flexible-load thesis: miners can swap off when grids want aid or when costs spike, making them helpful to utilities managing intermittency or congestion.
Geography tells the remainder of the story. Whereas imperfect in methodology, the Cambridge Bitcoin Electrical energy Consumption Index Mining Map tracks the place hashrate concentrates, although the information carries caveats, reminiscent of estimates lagging by one to a few months, and VPN or proxy routing can inflate shares in nations like Germany and Eire.
Nation attribution depends on geolocating IP addresses, a way that’s delicate to routing habits and topic to different inference limitations.
Inside these constraints, the map reveals mining distributed throughout jurisdictions with one factor in frequent: entry to energy that is both low cost, stranded, or each.
Pakistan turns overcapacity into coverage
Pakistan made essentially the most specific guess. The federal government introduced plans to allocate 2,000 megawatts within the first part of a nationwide initiative cut up between Bitcoin mining and AI knowledge facilities, with CZ named strategic adviser to the Pakistan Crypto Council.
The Finance Ministry framed it as a method to monetize surplus technology in areas with extra vitality, turning underutilized capability right into a tradable asset.
Two thousand megawatts operating repeatedly would generate 17.52 terawatt-hours yearly. With trendy mining fleets working at 15 to 25 joules per terahash, that energy might theoretically assist 80 to 133 exahashes per second of hashrate earlier than accounting for curtailment, energy utilization effectiveness, or downtime.
The dimensions issues lower than the construction.
What sort of contracts will miners signal, interruptible or agency baseload? Which areas get chosen, and the way sturdy is the coverage if tariffs rise or IMF stress intensifies?
Pakistan’s initiative alerts that “further electrons” can develop into a nationwide export, however execution will decide whether or not 2,000 megawatts materializes as a hub or only a headline.
Surplus by design, not accident
The UAE’s alternative is not perpetual surplus, but it surely’s surplus-by-design.
Peak demand in Dubai reached 10.76 gigawatts in 2024, up 3.4% year-over-year, concentrated in summer time months when cooling dominates load.
The Worldwide Power Company (IEA) tasks that cooling and desalination will account for near 40% of electrical energy demand development within the Center East and North Africa by way of 2035, with knowledge facilities explicitly named as one other rising load supply.
That creates a selected opening for miners: utilities construct programs to deal with excessive summer time peaks however want year-round monetization, normalization, and grid stability throughout off-peak durations.
Miners win the place they will provide extra flexibility than AI or HPC patrons, reminiscent of curtailment-ready hundreds that soak up energy others cannot take due to location, congestion, or dispatch constraints.
Bitcoin miners can swap off right away, whereas datacenters require steady operation, making curtailment and grid administration way more tough.
The area’s buildout developments favor baseload capability that outpaces seasonal demand, however the identical IEA outlook that flags knowledge facilities as a driver of demand means miners face direct competitors for the electrons they want.
The hub case relies on whether or not utilities worth dispatchable load sufficient to cost it attractively, or whether or not agency offtake contracts with AI patrons crowd out mining altogether.
When surplus turns into contested
Paraguay illustrates what occurs when surplus energy attracts miners, solely to set off a backlash.
The nation’s hydro capability attracted operators in search of low cost electrical energy, however tariff modifications repriced that benefit. Miners now reportedly pay between $44.34 and $59.76 per megawatt-hour plus taxes, and native business sources cited 35 corporations ceasing operations after the rise.
Regulation No. 7300 tightened penalties for electrical energy theft linked to unauthorized crypto mining, elevating most sentences to 10 years and permitting the confiscation of apparatus.
Nonetheless, actual capital nonetheless flows in. HIVE accomplished Part 1 infrastructure at a 100 megawatt facility backed by a totally energized 200 megawatt substation, signaling that some operators see sturdy economics even after repricing.
The strain is obvious: hydro surplus creates the preliminary draw, however as soon as miners scale, the state re-prices energy when it realizes they seem to be a concentrated, taxable offtaker, or native grid constraints and noise externalities construct political stress.
Paraguay’s trajectory reveals how a hub can flip if social license breaks, making coverage sturdiness a first-order variable in any site-selection mannequin.
What really makes a hub
Mining hub viability in 2026 comes all the way down to a method: delivered price per megawatt-hour occasions contract flexibility occasions coverage sturdiness, measured in opposition to what AI and HPC patrons are keen to pay, grid shortage, and foreign-exchange or import friction.
Three eventualities play out throughout these variables.
Within the first, curtailment gluts persist: renewables add quicker than grids can soak up, curtailment rises, and miners win as versatile offtake. Hydro- or seasonal-surplus jurisdictions with weak transmission, reminiscent of Paraguay, or nations explicitly monetizing overcapacity, reminiscent of Pakistan, are the likeliest hubs.
Within the second, AI outbids miners for agency energy. Knowledge facilities search long-term agency provide, pushing miners into interruptible, congestion-prone, or stranded pockets. Hubs emerge the place miners can entry interruptible pricing or “can’t-export” vitality reasonably than prime agency capability.
Within the third, political repricing or backlash reshapes the panorama. Governments increase tariffs as soon as miners scale or when households see shortages or noise. Paraguay turns into the template: a hub flips when the economics that attracted miners get recalibrated by the identical state that constructed them.
The IEA’s framing issues right here. International electrical energy demand is forecast to develop at a roughly 4% annual fee by way of 2027, pushed by industrial output, air con, electrification, and knowledge facilities.
Renewable capability additions are accelerating, however grid integration lags. That lag creates the curtailment and congestion that miners can monetize, but it surely additionally means surplus is a shifting goal.
The hubs that survive 2026 aren’t simply cheap-power jurisdictions, but in addition locations the place curtailment or congestion is prone to persist, regulation tolerates mining as dispatchable load, and miners can compete with or complement AI and HPC for electrons.
The guidelines
Six variables decide whether or not a jurisdiction turns into a mining hub or only a headline.
Surplus sort is the primary. Is it hydro seasonality, stranded fuel, flare mitigation, or nuclear baseload off-peak? Every has totally different persistence and contractability.
The delivered price and contract construction comply with because the second variable. What is the all-in worth per megawatt-hour, and is the contract interruptible? Who bears congestion threat, and is there compensation for curtailment?
Then comes the ASIC import and logistics, reminiscent of customs duties, transport lanes, spare elements availability, and capital controls, all of which have an effect on speed-to-market and operational threat.
Coverage sturdiness is the fourth variable: tariff repricing threat, licensing necessities, sudden bans, and theft enforcement decide whether or not a hub stays a hub.
Local weather, cooling, and water additionally play an element. Air-cooling limits, immersion feasibility, and warmth or noise externalities constrain the place large-scale operations can function with out triggering native opposition.
The final variable is offtake competitors: AI and HPC demand development is now explicitly mirrored in electrical energy demand forecasts. Hubs should assume competitors for “good electrons,” not simply low cost ones.
Pakistan’s 2,000 megawatt plan is the clearest sign that governments see surplus electrical energy as an exportable asset class, with mining as one monetization path.
Jurisdiction1) Surplus / curtailment type2) Delivered $/MWh + contract structure3) ASIC import/logistics + FX4) Coverage durability5) Local weather/cooling + water6) Offtake competitors (AI/HPC)Pakistan⚠️ Overcapacity framed as coverage (“areas with extra vitality”), however persistence/seasonality not but confirmed⚠️ Worth & phrases TBD (headline MW ≠ delivered $/MWh; key’s interruptible vs agency + curtailment comp)❌ FX/import friction doubtless (capital controls, transport/customs uncertainty)⚠️/❌ Execution threat (tariff politics + IMF scrutiny might drive repricing or sluggish rollout)⚠️/❌ Sizzling local weather → greater cooling load/PUE until sited in cooler areas❌ Direct competitors (initiative explicitly consists of AI knowledge facilities; agency energy could get bid up)UAE (Dubai/GCC lens)⚠️ “Surplus-by-design” (programs constructed for summer time peaks → off-peak monetization potential)❌/⚠️ Printed tariffs are excessive; mining wants particular contracts/curtailment-ready pricing to work✅ Finest-in-class logistics (ports, spares, finance; low friction scaling)✅ Usually steady allowing atmosphere (however vitality pricing is the swing variable)❌ Excessive warmth makes cooling a first-order constraint; water/warmth externalities matter❌ Excessive competitors (knowledge facilities increasing; miners doubtless pushed to interruptible/constrained pockets)Paraguay✅ Hydro surplus draw (Itaipú-style abundance is the core “hub” attractor)⚠️ Nonetheless aggressive however repriced (tariff hikes + taxes; economics depend upon contract specifics)⚠️ Landlocked/logistics add time/price; manageable however not “plug-and-play”❌ Sturdiness threat (tariff repricing + enforcement stress = hub can “flip”)✅ Extra forgiving local weather than GCC; simpler cooling profile✅ Decrease AI/HPC bidding stress vs main metro markets (for now)
Whether or not that path results in 2026’s subsequent main hubs relies on execution, together with contract phrases, website choice, and whether or not the political consensus holds as miners begin consuming gigawatt-hours at scale.
CZ’s thesis about Bitcoin as a purchaser of final resort is appropriate in precept. The follow is messier, contingent on grids that may’t soak up renewables quick sufficient, states that tolerate versatile hundreds, and miners who can keep aggressive as knowledge facilities bid up the value of agency energy.
The hubs that emerge would be the ones the place these situations align lengthy sufficient to construct infrastructure and signal contracts that survive the primary tariff revision or the primary summer time blackout.
