An Australian first energy and blockchain deal could help make the NSW Hunter Valley the next Silicon Valley.

IOT Group has signed an agreement with Hunter Energy to build a blockchain centre inside the Redbank coal-fired power station to provide cheap electricity for blockchain applications.

The new deal underwrites the restarting of Redbank coal-fired power station in the Hunter Valley.

The deal, the first of its kind in Australia, would put the centre ‘behind the grid’, giving it direct access to wholesale electricity prices to avoid additional costs from the retailer, transmission, and being connected to poles and wires.

It is understood the proposed two-hectare development could cut energy prices by up to 20 per cent.