Australia’s Hunter Energy has signed a contract with the IOT Group, a cryptocurrency mining firm, in an effort to reopen a coal power plant in the Hunter Valley Region of Australia. The move would sell electricity at wholesale costs to blockchain companies in an effort to encourage blockchain innovation in the country.
AN UNLIKELY LOCATION
It seems that despite a plethora of new and advancing technologies entering the market, the methods to power these technologies have not necessarily kept pace.
One wouldn’t typically expect to find a cryptocurrency mining operation in Australia. Electricity is an expensive commodity, and the climate’s warmth only adds to the cost because it requires more extensive cooling procedures for expensive equipment. As a result, blockchain companies tend to base themselves in countries such as Canada or Iceland, but two companies are hoping to change this trend.
Sources say that Hunter Energy is the company that wants reopen the Red Bank power station, a coal-fired power facility that has been unused since 2014. Along with the IOT Group, Hunter Energy announced their plans to supply the blockchain company with electricity off-grid. This would considerably reduce the high costs caused by the energy consumption of cryptocurrency miners.
MINING DOWN UNDER
What’s the reason for Australia’s sudden interest? In recent months, Bitcoin and other cryptocurrencies have gained popularity as their prices soar and plunge. The possibility of lucrative gains has inspired a multitude of start-up companies around the world dedicated to researching and developing blockchain technologies. Current energy prices in Australia mean possible blockchain companies would be faced with overwhelming financial burdens, consequently influencing their decision to base themselves elsewhere.
By selling electricity at a wholesale rate, Hunter Energy and the IOT Group believe they can spur innovation in the region and the country as a whole. The companies envision a “Blockchain Application Center” located nearby the power plant that would be dedicated to blockchain operations. Sean Neylon, the executive director of the IOT Group, is optimistic about the possibilities, stating,
“With these current prices, by having a blockchain application center behind the grid offers cheap power. It offers the potential to create a new Silicon Valley in Australia.”
The proposal comes at an opportune time. In light of China undergoing a crackdown on cryptocurrency mining operations, other operations have appeared around the world. These companies often opt for regions with affordable energy costs and a cold environment to naturally assist in cooling the massive pieces of hardware, but Australia has a chance to develop their own niche while miners scramble for somewhere to go. While other countries have established themselves as cryptocurrency mining hubs, the two companies are hoping this recent action attracts more business and presents Australia as an attractive option for operators.
Some are questioning whether the project will actually be completed due to alleged legal trouble in both companies. The unconfirmed reports include cash flow issues and corruption. However, only time will reveal whether Australia becomes a main player in cryptocurrency operations.