NSW's Hunter Valley region is where wine is embedded into the culture, and now it may be transforming into a cryptocurrency mining hub, too.
Australia's Hunter Energy and publicly traded IOT Group have inked a partnership to develop a blockchain center at the dormant Redbank power facility, which is located a couple of hours outside of Sydney and which Hunter is working toward recommissioning.
IOT Group has been given the green light to build a Blockchain Applications Complex (BAC) across 2 hectares located behind a power grid, connecting directly to a power station. In true decentralized fashion, it cuts out third-party providers at the retailing level as well as for transmission and connectivity services. As a result, the tenants of the BAC would see their energy bill slashed dramatically versus what households and other businesses pay.
"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," according to IOT.
The power plant was designed as a coal-fired power site with a capacity of 150 megawatts back near the turn of the century, but it's been offline for the past four years. Hunter wants to switch it over to solar power, reports indicate. Reports also suggest that BAC power consumption could be between 10mw and 20wm.
"Australia's Silicon Valley"
As a result, Hunter Valley could be transformed into "a new Silicon Valley for Australia", according to IOT Group's Sean Neylon quoted in reports, where blockchain companies flock to the region for the attractive rates.
Considering the close proximity of BAC to the power grid, blockchain startups could acquire energy at wholesale rates, which is a role reversal in a world where power utilities have been looking to assign higher rates on anything cryptocurrency mining or blockchain related.
It sounds like a bitcoin miner's dream, considering the high energy consumption that's required to run the computer servers needed to produce more coins. Blockchain applications, however, are increasingly being developed across the public and private sectors, which could inspire blockchain-fueled organizations of all kinds to set up shop versus moving to a competing region for cheap power such as Iceland, as Business Insider points out.
It's the maiden project in IOT's blockchain strategy, and it gives them the opportunity to dive deeper into the Internet of Things, they said. IOT has agreed to the following -
- 10% of net profits of the IOC BAC facilities goes to Hunter Energy
- long-term agreements are expected to be signed within three months
- electricity for BAC "will be supplied at wholesale cost, which should be no more than one-third of current business and consumer power costs."
Hunter Energy is currently working toward recommissioning the decommissioned power plant including purchasing "relevant land and assets", and it hopes to begin power generation by the first quarter of next year. The companies point out that there are still many moving parts that need to come together for this project to succeed and that "investors should be aware of these risks."
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