A proposal to mine Bitcoin at a 30 megawatt bagasse-fired power plant on the Far North Coast of New South Wales will help place a hedge, or a floor, against low market prices in the electricity generation sector.
The process of creating crypto-currency involves computational code-cracking using hundreds of computers to do the job. All they need is electricity - and lots of it.
Bitcoin miners are responsible for validating transactions and securing the network using a process familiar to agricultural producers: Blockchain, so that fake manipulations are rendered obsolete. Renewable power can sweeten the deal.
On the Far North Coast digital infrastructure firm Mawson has teamed up with Quinbrook which manages co-generation power plants at Condong and Broadwater sugar mills through Cape Byron Power. Independent analysis confirms that around 2500 local jobs rely on the ongoing operations of Cape Byron Power.
Spot pricing on the open electricity market can soar to incredible heights - $15,000 per mega watt hour is a recent record - but they can also plummet when too much supply swells the grid and makes it unstable.
Returns from midday power generation in recent weeks have performed poorly, with nearly 20 days in September recording a value of zero or negative during the middle of the day, highlighting the influence from solar panels on farms and houses.
A Cape Byron Management spokesman says the deal with Mawson would see containers of computers, each holding about 700 units, able to instantly turn on and off to take advantage of spike pricing.
"Solar farms have hollowed out daytime pricing, forcing thermal generators to lower their output. Now, thermal generators are running harder at night than day, which is the reverse of how it was historically."
Sometimes users are paid to take electricity over-supply, to keep the grid from tripping out and by using computers digging for algorithms as a way to mop up the excess.
Cape Byron Power is created by burning biomass and the company sources offcuts and timber residue from 50 sawmills along with crowns and stumps from harvested tree plantations to complement cane trash, or bagasse as combustible energy at the two sugar mills.
"This material used to be burnt in the paddock but we like to promote the fact that when it is used for power generation it is burnt in a controlled environment. We use no native timber and we have a copy of a plantation's harvest plan so we know where our fuel is coming from."
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