Hunter Valley coal power plant getting rebooted to power blockchain
A tech group wants to fire up the plant to power blockchain tech and create a Silicon Hunter Valley.
ASX-listed IOT Group has just inked a deal with Hunter Energy to use the Hunter Valley's old coal power plant, which was switched off in 2014. It's proposing to recommission it over the next 12 months and redevelop the Redbank site to establish Australia's first blockchain centre, SMH reports.
The plan aims to offer power "behind the grid" at wholesale prices of around 20% of consumer energy costs.
"Blockchain processes used a lot of computing power and energy," said IOT Group executive director Sean Neylon. "The reasons why blockchain specialists are not in Australia is because power costs are too high, it’s not efficient. Power at wholesale cost would make blockchain related operations attractive in Australia."
Hunter Energy chief executive Jim Myatt, who also co-founded flat-rate electric company Mojo Power, said feasibility studies were currently underway and suggested that the generator could be fired up again around the start of 2019.
"NSW needs more baseload right now," he said. "We’re exploring battery and solar on the site as well as part of the transitional energy change."
The blockchain centre alone might consume 10 to 20 megawatts of electricity, while the Redbank power plant as it is can produce 150 megawatts.
Bitcoin is the world's best-known blockchain system, but quirks of its programming mean it's also notoriously energy inefficient to the extent that bitcoin "miners" who power the network often tread a fine line and risk operating at a loss when bitcoin prices dip. Typically, the relatively high energy prices in Australia mean it's almost impossible to profitably mine bitcoin Down Under.
Bitcoin isn't the only blockchain system though, and energy use isn't just for mining. The nature of blockchain, which is a permanent unbroken ledger of transactions, means data storage is also one of the chief concerns for any company that wants to get involved.
Data centres also need a lot of energy for the machines themselves as well as for the air conditioning to keep them from catching fire. Electricity prices are always a concern for a location-shopping tech company, but blockchain systems in particular push the issue to the front.
"With these current prices... having a blockchain application centre behind the grid offers cheaper power. It offers the potential to create a new Silicon Valley in Australia," Neylon said. "We're offering services so clients can build data centres where they can get cheaper power."
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
- Ethereum price continues to slide, correcting by 9% overnight
- Bitcoin price drops 5% overnight as usage weakens
- Expert analysis: Ethererum’s price is consolidating, not stagnating
- Bitcoin price drops as US hikes interest rates – are they connected?
- 4 tips to streamline your Australian cryptocurrency tax in 2021