Energy grid operators are currently neglecting the potential role of Bitcoin in stabilizing power markets. Instead, they seem to be pursuing less flexible, wealthier buyers. According to former Binance CEO Changpeng Zhao (CZ), the UAE generates surplus power primarily to meet the high demand that peaks for only three days each year. In this context, Bitcoin mining can serve as a “buyer of last resort,” turning excess electricity into revenue when no other buyers are available.
The critical inquiry for 2026 revolves around whether the surplus electricity is stable enough to create lasting contracts and whether miners can maintain their positions against rising demand from sectors such as artificial intelligence (AI) and high-performance computing (HPC), which are increasing the clearing prices for firm power supplies.
An analysis of the economics reveals that electricity constitutes over 80% of miners” operational costs, as highlighted in the Cambridge Digital Mining Industry Report. This report indicates a median electricity-only cost of roughly $45 per megawatt-hour, with miners reportedly curtailing 888 gigawatt-hours of energy in 2023, equating to an average of 101 megawatts of capacity that was not utilized. This level of curtailment supports the idea that miners can act as flexible loads, helping utilities manage grid congestion and intermittency by reducing their power usage when needed.
Geographically, the distribution of mining operations can be understood through the Cambridge Bitcoin Electricity Consumption Index Mining Map. While this map has its limitations due to potential inaccuracies in data collection, it illustrates that mining activities are concentrated in areas with access to cheap or stranded power. For instance, Pakistan has made a clear decision to leverage its energy surplus, announcing plans to allocate 2,000 megawatts for Bitcoin mining and AI data centers. CZ has been appointed as a strategic advisor to the newly formed Pakistan Crypto Council, emphasizing the government”s intent to monetize surplus energy.
This initiative could theoretically support significant hashrate capabilities, but the focus should be on the types of contracts miners will enter—whether they will be interruptible or firm baseload agreements. The success of this plan will hinge on the durability of these policies, particularly if energy tariffs rise or if international pressures, such as from the International Monetary Fund, come into play.
In the UAE, the situation is characterized by surplus energy that is intentionally engineered rather than coincident. Peak electricity demand in Dubai was recorded at 10.76 gigawatts in 2024, reflecting a 3.4% increase year-over-year, primarily driven by cooling needs in the hot summer months. The International Energy Agency (IEA) predicts that cooling and desalination will significantly contribute to electricity demand growth in the Middle East and North Africa through 2035. This trend creates a unique opportunity for miners to provide flexible loads that can stabilize the grid during off-peak periods, unlike data centers that require continuous operation.
However, as competition for power increases, particularly from data centers, miners may find themselves squeezed out of the market. The UAE”s energy buildout aims to ensure that baseload capacity outstrips seasonal demands, but the concurrent rise in demand from data centers could complicate this balance.
Looking at Paraguay, we see another example of how surplus energy can attract miners but lead to regulatory backlash. The country”s hydroelectric capacity initially drew miners due to low electricity prices, but subsequent tariff changes led to increased costs, causing many operators to cease their activities. This shift illustrates how state actions can significantly influence mining operations and highlight the need for durable policies.
The future viability of mining hubs will depend on a combination of factors: the type of surplus energy available, the overall cost of power, contract flexibility, and the political environment surrounding mining activities. As the landscape evolves, jurisdictions that can maintain a stable, cost-effective, and politically supportive environment will likely emerge as the key mining hubs of 2026.
Ultimately, while CZ”s assertion regarding Bitcoin as a buyer of last resort holds theoretical merit, the practical implications are contingent upon the operational capabilities of grids, the willingness of states to accommodate mining, and miners” ability to remain competitive amid rising power demands from alternative sectors.
