While cryptocurrency mining ventures have flocked to energy-rich regions such as Iceland and nations such as Chile have pioneered using blockchain to track power supply management, Australian firm IOT Group has taken a different approach by recommissioning a coal-firing power plant to fuel its new blockchain applications center.

The deal, which has now been inked in an agreement with Hunter Energy, would see both companies develop a platform to offer cheap electricity supply for blockchain ventures.

The deal, which has been touted as the first of its kind in Australia, will provide the company with ‘behind the grid’ access to wholesale electricity prices in a move that is expected to cut energy expenditure by some 20% versus the cost of obtaining electricity through a retailer.

In a company statement, IOT Group elaborated that while the “average consumer pays around 28 cents (AUD) per kilowatt-hour”, IOT and its partners are expected to spend some 8 cents per day and 5 cents per night time.

In a statement to Fairfax Media, IOT Group executive director Sean Neylon offered that “the reason why blockchain specialists are not in Australia is because power costs are too high, it’s not efficient… Power at wholesale cost would make blockchain related operations attractive in Australia… With these current prices, by having a blockchain application center behind the grid offers cheaper power. It offers the potential to create a new Silicon Valley in Australia.”

The bid forms a key pillar of IOT Group’s blockchain strategy – in a press release, the company outlined that plans to “assist clients to operate and manage their Blockchain businesses on a more cost-effective basis”.

IOT Group recently incorporated IOT Blockchain Pty Limited as a new subsidiary, with the view of partnering with specialist firms to monetise new opportunities offered through the acquisition of the plant.

The deal has not yet been fully finalised, and the final handover of the plant will be subject to several conditions before the 31st of December this year; namely, the suitability of the land and power station project will be determined and plans to recommission the plant itself must be finalized. The bid further requires the approval of IOT Group’s shareholders.

IOT Group has not yet formally announced any new partnerships that might one day occupy the recommissioned plant.