Idle coal-fired power plant in Australia will reopen to power bitcoin mining

Desdemona Despair

By Claire Reilly
11 April 2018

(CNET) – Sure, you could mine bitcoin on that old PC in your garage, or you could use a whole power station to do it.

That’s the idea behind the Blockchain Application Centre — an Aussie tech initiative that will see one of the country’s now-shuttered coal-fired power plants reopened to provide cheap power for blockchain applications.

It’s the work of Australian tech company IOT Group, which has partnered with local power company Hunter Energy on the project. According to The Age, Hunter Energy will recommission the Redbank power station in the Hunter Valley, two hours drive north of Sydney.

Once the power plant is reopened (expected to be completed within 12 months), it will offer wholesale or “pre-grid” power prices to blockchain companies, allowing them to do things like mining cryptocurrencies, without having to pay retail power prices. […]

But while blockchain guarantees trust in a digital world, mining blocks (the process of adding and securing data) is an incredibly compute-intensive task, and one which consumes a huge amount of power. World mining of bitcoin (probably the most well-known blockchain application) currently uses about as much power as the country of Singapore. [more]

This coal power plant is being reopened for blockchain mining

By Cole Latimer
10 April 2018

(The Age) – An Australian first energy and blockchain deal could help make the NSW Hunter Valley the next Silicon Valley.

IOT Group has signed an agreement with Hunter Energy to build a blockchain centre inside the Redbank coal-fired power station to provide cheap electricity for blockchain applications.

The deal, the first of its kind in Australia, would put the centre ‘behind the grid’, giving it direct access to wholesale electricity prices to avoid additional costs from the retailer, transmission, and being connected to poles and wires.

It is understood the proposed two-hectare development could cut energy prices by up to 20 per cent.

“The average consumer pays around 28 cents per kilowatt-hour, with what IOT are doing its pre-grid [price] is 8 cents and will be 5 cents at night time,” IOT said in a company statement.

While Australia has been on the radar for many blockchain companies due to its stable investment environment and low sovereign risk, high electricity prices have dissuaded entry into the market.

Blockchain technology creates a transparent and auditable record of transactions and data movement.

Companies that use blockchain applications are typically cryptocurrency – or bitcoin – miners such as Bitfury and Bitmain Technologies or peer-to-peer token trading, like Power Ledger, which last year carried out an Initial Coin Offering (ICO) to raise equity and engage potential users in its trading network.

Blockchain technology is also used by oil and resources companies to streamline their commodity trading processes.

“This deal has opened the door to these kinds of businesses,” Mr Neylon said.

“Blockchain processes used a lot of computing power and energy,” IOT Group executive director Sean Neylon told Fairfax Media.

The energy demand of the bitcoin network alone is believed to be equivalent to the entire electricity demand of Denmark, around 32 terawatt-hours annually, or about 16 per cent of Australia’s total electricity consumption last financial year.

“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,” Mr Neylon said.

Mr Neylon said this could support the development of a new industry in the Hunter Valley and help create a tech-focussed hub just two hours north of Sydney.

“With these current prices, by having a blockchain application centre behind the grid offers cheaper power. It offers the potential to create a new Silicon Valley in Australia,” he said.

“We’re offering services so clients can build data centres where they can get cheaper power.” [more]

Blockchain to get ‘behind the grid’ in landmark Australian deal