The idle power paradox and Pakistans Bitcoin energy plan As of March 2025, Pakistan boasted an installed power capacity of 46,600 MW, a slight increase from the previous year.
Almost 14% of this capacity remains idle, especially during off-peak winter months when demand can drop as low as 12,000 MW.The core issue here lies in capacity payments, fixed fees paid to power plants regardless of whether they produce electricity, which have soared as high as 2.1 trillion Pakistan rupees($7.45 billion) annually.This cost burdens consumers even when plants are dormant.Fossil fuels, renewables and an unstable gridTheres an additional factor in this problem to consider.Thermal power (coal and gas) accounts for 56% of installed capacity but contributes only 46% of actual generation, as older, inefficient plants remain on standby, collecting payments.While hydropower, nuclear and renewables fill the gap, Pakistans rapid solar adoption has brought new challenges.
Net-metered solar capacity surged from 1.3 GW to nearly 4.9 GW in one year, driven by over 17 GW of Chinese solar panels in 2024.This solar boom, however, leads to grid instability from fluctuating supply, rising electricity tariffs for non-net-metering users and unequal access for poorer households.Consumers face high electricity rates (~16/kWh for businesses), fueling the solar rush and deepening the cycle of costly imbalance.Bitcoins energy solution in PakistanPakistans energy woes, as outlined, presented a unique opportunity: redirecting up to 2,000 MW of idle power to Bitcoin mining and AI data centers.Proponents argue this could monetize wasted off-peak electricity, ease grid strain by absorbing excess supply and generate revenue through digital assets.Critics, however, warn of increased fossil fuel reliance, environmental concerns and whether benefits will truly reach ordinary Pakistanis.
The Bitcoin 2,000 megawatt mining strategy: Can Bitcoin solve the energy crisis in Pakistan? Pakistans energy crisis, marked by expensive, underutilized power plants and soaring bills, took an unexpected turn in May 2025.
The government announced a plan to redirect 2,000 MW of idle electricity toward Bitcoin mining and AI data centers.This bold move was spearheaded by the newly formed Pakistan Crypto Council (PCC), led by Bilal Bin Saqib, a tech adviser to the prime minister.Their argument was simple: Turn surplus power into revenue.
Bin Saqib pitched Pakistan at Bitcoin 2025 in Las Vegas as an ideal mining location due to its cheap, untapped electricity, attracting global miners seeking new homes after crackdowns elsewhere.News outlets like Reuters and Bloomberg covered the story, framing it as Phase 1 of Pakistans digital economy push.While crypto blogs celebrated, the IMF raised concerns about diverting power in a country facing blackouts.
The government defended the plan by highlighting the 2.8 trillion Pakistan rupees annual cost of idle plants, a potential $500 million yearly revenue from mining and the creation of thousands of tech jobs.The underlying question remains whether this is a sustainable long-term solution or a short-term fix.Did you know? Binance co-founder Changpeng Zhao was appointed a strategic adviser to the Pakistan Crypto Council, signifying major international interest in the countrys digital asset strategy.
Crypto mining and energy reform in Pakistan: How it works Pakistans bold pivot to Bitcoin mining and AI data centers involves concrete operational steps and strategic implementations.
In this section, we examine a few.Repurposing old coal plantsThe plan relies on utilizing underused coal power plants, some operating at just 15% capacity, which incur significant take-or-pay costs even when idle.
This aims to transform a financial liability into a revenue stream.Still, concerns persist about the high running costs and environmental impact of extending the life of these older plants.Did you know? The initial phase of Pakistans Bitcoin mining plan targets coal-based power projects like Sahiwal, China Hub and Port Qasim.Infrastructure and digital frameworksBeyond electricity, success requires attracting foreign mining and AI data center companies to establish operations near power sources, minimizing transmission losses.Crucially, Pakistans weak grid infrastructure will need upgrades to handle continuous, round-the-clock power demands.Digitally, Pakistan is creating a National Bitcoin Wallet for government-held reserves and a Pakistan Digital Asset Authority (PDAA) for licensing, taxation and Anti-Money Laundering compliance.
Customs breaks on ASIC mining machines are also being offered to attract investment.The electricity price challengeThe main hurdle is electricity pricing.
At commercial rates (~$0.22/kWh), mining in Pakistan is significantly more expensive than in competing regions.A proposed subsidized rate of $0.09/kWh aims to improve competitiveness, but still faces potential pushback from the IMF, as energy subsidies contradict bailout agreements.
Benefits of Pakistans crypto mining energy The initiative aims to convert Pakistans surplus electricity from underutilized thermal power plants into a revenue stream through Bitcoin mining and AI data centers.
This seeks to transform capacity payments, a financial burden, into high-value digital assets.Additionally, Pakistan intends to leverage its strategic location to become a digital bridge between Asia, Europe and the Middle East, positioning itself as a global hub for data centers and digital innovation.Also, the plan includes incentives like tax breaks and duty exemptions to attract significant foreign direct investment from global Bitcoin miners and AI firms, fostering high-tech job growth and boosting the local digital economy.As part of the initiative, Pakistan plans to create a government-held Strategic Bitcoin Reserve or national Bitcoin wallet to accumulate mined Bitcoin as a long-term sovereign asset, signaling a commitment to integrating digital assets into its economic stability framework.Did you know? In April 2018, the State Bank of Pakistan (SBP) issued a circular prohibiting financial institutions from dealing in cryptocurrencies, halting trading through traditional banking channels.
New policies, therefore, demonstrate a remarkable U-turn.
Challenges of Bitcoin mining in Pakistan Despite the promising potential of Bitcoin mining, Pakistan faces an uphill battle in establishing a sustainable and stable mining industry.Sustainability and grid reliabilityRelying on older, inefficient coal plants for continuous mining poses sustainability and reliability concerns.Pakistans fragile grid, with its inconsistencies and high transmission losses, adds risk to maintaining uninterrupted power for mining operations.IMF scrutiny and financial stabilityThe IMF has expressed significant concerns and sought urgent clarification regarding Pakistans energy allocation, given its ongoing Extended Fund Facility (EFF) negotiations.Fears exist that the initiative could complicate budget talks and that energy subsidies might contravene bailout conditions.Energy security and public welfareA critical risk is the potential diversion of power from households and industry.
Despite assurances, if mining exacerbates existing power shortages or drives up consumer tariffs, it could lead to public unrest and undermine the perceived economic benefits.Regulatory ambiguityDespite the establishment of the PCC and PDAA, legal and regulatory clarity for cryptocurrency in Pakistan remains ambiguous.The absence of unified federal legislation creates a regulatory gray zone, potentially deterring foreign investors and exposing participants to legal and compliance risks.
Bitcoin mining in Pakistan: Whats next? Phase 1 of Pakistans Bitcoin mining initiative, launched in 2025, allocates 2,000 MW for mining and AI data centers.Future phases are slated to integrate renewable energy sources (solar, wind, hydropower), signaling a long-term shift toward sustainable energy for these operations.A key factor is the IMFs approval.
Given Pakistans ongoing EFF loan and the IMFs caution regarding sovereign Bitcoin adoption, consultation and clarification on energy allocation and subsidies are critical.
The outcome of these discussions will significantly influence the plans implementation.Ultimately, the success will hinge on attracting global Bitcoin miners and AI operators.
While initial interest is reported, the actual deployment of the allocated megawatts will be the true test.Global players will monitor Pakistans ability to offer stable, competitive electricity and navigate regulatory complexities, with real foreign investment and operational facilities serving as key indicators.