Cryptocurrency Mining Group Seeks To Reopen Closed Power Plant

Earlier this week, the Australian blockchain startup IoT Group signed an agreement to reopen a coal-fired power plant in the Hunter Valley region of New South Wales. Local media outlet The Age reports that the IoT Group aims to use the plant as a “behind the grid” power source, securing inexpensive electricity for a new bitcoin mining facility. The 151 megawatt Redbank station was shuttered in 2014, following a long saga of financial and environmental scandals that ultimately resulted unpaid debts of $192 million AUD. The facility’s current owners, Hunter Energy, are currently undertaking feasibility studies to bring the station back online as a center for cryptocurrency mining and related blockchain technologies.

According to a statement by the IoT Group, the Redbank facility will provide electricity to miners at a rate of 5 to 8 cents AUD (roughly 4 to 6 cents USD) per per kilowatt-hour. By comparison, average domestic consumer in the NSW region pays around 28 cents per kilowatt-hour. Those prices are comparable to the low-cost hydroelectric energy that has helped to fuel a major cryptocurrency mining boom in rural areas of the U.S. and Canada in recent months. With major players like Bitmain seeking to find low-cost power for new mining facilities outside of Asia, the Redbank plant could become a similarly attractive location in the southern hemisphere. It doesn’t take a bitcoin calculator to see the appeal of lower electricity prices for Australian bitcoin miners.

The Redbank plant is still deeply problematic for Australian environmentalists, which have criticized the facility’s coal-waste technology since the mid-1990s. Perhaps anticipating resistance from environmental groups, Hunter Energy CEO Jim Myatt told The Age that his firm is “exploring battery and solar on the site” in addition to coal. The site’s footprint is relatively small — roughly 5 acres — limiting the scope of such additions.

While demand for cheap power for cryptocurrency mining may provide enough incentive to reopen the power plant, Hunter Energy appears to have traditional uses in mind as well. As Myatt told The Age, “NSW needs more baseload right now.” The proposed IoT Group mining facility is projected to consume between 10 and 20 megawatts, leaving at least 130 megawatt capacity available to other bitcoin mining firms, industrial facilities, and residential customers.