SNEAK PEEK
- The UAE has become a fast-growing Bitcoin mining hub in the Middle East.
- Large-scale projects led by Abu Dhabi’s sovereign wealth fund drive growth.
- The country’s abundant energy resources and favorable environment attract miners.
The United Arab Emirates (UAE) has emerged as a fast-growing Bitcoin mining hub in the Middle East. The country’s political stability, business-friendly environment, strong capital markets, and abundant energy resources make it an attractive destination for Bitcoin miners.
Moreover, the nation has glimpsed widespread home mining and small-scale amateur mining setups for several years. This was driven by an innovative spirit and heavily subsidized electricity tariffs for specific sectors. However, in recent years, there has been a push from a local sovereign wealth fund to develop large-scale Bitcoin mining projects.
On the same note, the digital asset arm of Abu Dhabi’s sovereign wealth fund, Zero Two (formerly FS Innovation), partnered with local Bitcoin mining company Phoenix Technology. Consequently, the collaboration is set to build a 650 MW hydro-cooled mining farm in Abu Dhabi. With an investment of $2 billion, this project is the largest single Bitcoin mining site ever.
In addition, Zero Two launched a second partnership with the US public miner Marathon to build and operate two immersion-cooled facilities in Abu Dhabi totaling 250 MW. These projects, led by Abu Dhabi’s sovereign wealth fund in collaboration with established industry players, have put the UAE on the global Bitcoin mining map.
Furthermore, most of the Bitcoin mining activity in the UAE occurs in Abu Dhabi, the largest and most energy-rich emirate. According to reports, the operational Bitcoin mining capacity in the UAE is estimated to be around 400 MW, with plans to expand to over 600 MW by the end of the year.
In addition, the UAE is expanding its electricity supply by diversifying its sources. It recently opened Barakah, the largest nuclear power plant in the Arab world, with a total capacity of 4 GW. The plant will provide Bitcoin miners with cheap electricity and the opportunity for demand flexibility in the inflexible nuclear-powered grid.
The UAE is also planning a massive solar buildout in its deserts. The country’s largest solar project currently has an operational capacity of 1.6 GW and is set to reach 5 GW by 2030. Notably, Bitcoin miners can operate at these solar farms to utilize excess electricity and minimize waste.
Contrastingly, the UAE’s electricity demand fluctuates significantly due to seasonal variations in temperature and the high energy consumption associated with freshwater production and cooling. The country’s power plants, which also serve desalination plants, run continuously throughout the year, leading to wasted surplus electricity.
Nevertheless, Bitcoin mining can monetize this previously wasted electricity, increasing utility revenues and making the electricity system more efficient.
In conclusion, the UAE’s electricity supply expansion, including nuclear and solar power, provides ample opportunities for Bitcoin miners to access cheap electricity and contribute to the country’s growing mining industry.
