A coal-fired Hunter Valley power station could be brought back online to provide cheap power for cryptocurrency miners

Hunter Valley power can be cheap. Picture: Getty Images

  • Hunter Energy proposing to recommission Redbank station over the next 12 months.
  • IOT Group signs agreement to develop Blockchain Application Centre on the site.
  • Will provide power to startups at 20% of the retail price.

Australia’s next generation of tech workers could be able to wine and mine in their own Silicon Valley – and do it cheaply.

ASX listed The IOT Group has just signed an agreement with Hunter Energy to utilise the Redbank power station in the Hunter Valley.

Hunter Energy is proposing to recommission the station over the next 12 months.

IOT Group will develop two hectares of Redbank’s 32ha site to establish Australia’s first Blockchain Application Centre, which will supply blockchain operators with electricity at wholesale prices.

That’s a big deal, because the cost of electricity is the number one concern for those who mine cryptocurrencies on a large scale. It’s why so many shifted to Iceland, where magma fuels power plants cheaper than just about anywhere in the world.

This year, Icelandic cryptominers are expected to draw down 100 megawatts of power, more than Iceland’s 340,000 residents use in residential energy.

Of course, blockchain technology is not exclusive to the cryptomining community. Put simply, it’s a way to record data transactions that can be confirmed and are auditable.

It’s already being used to confirm national elections, streamline trading processes, build trustworthy social networks and lift higher education standards.

Weapons, music, diamonds, power, insurance, and Internet of Things (IOT) devices – you think of it, and someone has already thought of a blockchain application for it.

Redbank was built in 2001 to deliver 150 megawatts (MW) of power, but decommissioned in 2014. Hunter Energy have agreed to bring it back online over the next 12 months to provide 2MW of power for The IOT Group.

Crucially, the power will be delivered behind the grid, giving tenants at the Blockchain Application Centre access to power at 20% of the retail price.

The average NSW consumer pays around 28 cents per kilowatt hour. IOT can offer pre-grid power for 8 cents during the day and 5 cents at night time.

The Redbank facility is coal-powered, but Hunter Energy is “exploring battery and solar on the site”.

It told Business Insider it “has clients being signed up currently” but is keeping them confidential at their request. It expects that 2ha won’t be enough to meet future demand and has expansion plans for when that demand comes.

The plans are ambitious. The IOT Group isn’t scared to throw about the phrase “billion-dollar blockchain valley” and share its vision for an “Australian Silicon Valley” in the Hunter, “creating new employment, new housing, restaurants, coffee shops, restaurants and business”.

“This deal has opened the door to these kinds of businesses,” IOT Group executive director Sean Neylon told Fairfax Media.

“The reasons why blockchain specialists are not in Australia is because power costs are too high, it’s not efficient.

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

“Blockchain processes used a lot of computing power and energy,”