There is no doubt that nature has endowed Australia with the unique desert landscape with plenty of sunshine and open spaces. To many, if they have to choose the most ideal place to build large-scale Bitcoin operations and take advantage of the cheap solar power, Australia will be their first choice. But in reality, there are many more factors to consider, experts say.
Regulators in Australia are beginning to see the potential of the crypto industry. According to a recent report by a parliamentary inquiry, the government should incentivize the use of renewable sources in crypto by introducing a 10% tax concession for mining operations that commit to utilizing 100% green energy.
“Australia has a fantastic opportunity to be a Bitcoin mining hub,” says Nick Hughes-Jones, chief commercial officer for Australian Bitcoin mining operator Mawson Infrastructure Group, in his interview with Forkast. “There’s a lot of inbound interest at present from solar farms.”
However, Hughes-Jones also states that Bitcoin mining is much more complex than having access to solar power grids. In fact, deserts in Australia often experience weeks of +40°C temperatures, making them unsuitable for any mining activity. His company, Mawson Infrastructure Group formed a partnership with Quinbrook Infrastructure Partners, a renewable energy firm, and is now the largest Bitcoin mining operation in Australia.
Mawson’s facility is located in the coastal town of Byron Bay and Quinbrook’s biomass energy production facility is responsible for providing them with 100% renewable sources. Biomass energy is the process of turning living plants or animal matter into liquid or gaseous fuels to produce energy. At Quinbrook, the mass primarily comes from sugar cane milling waste.
Mawson’s facility uses approximately 20 megawatts of power while adding approximately 0.4 exahashes to the global mining pool. This number might seem modest, but they are growing the facility.
“Byron Bay is a site we are really proud of,” Hughes-Jones added. “Quinbrook is a great partner. They have 17 gigawatts of green energy assets in development across the US/UK/Australia. In this business, you need to find partners like that as it is a scale game.”
It is no coincidence that Mawson facility was built about halfway up Australia’s east coast. While it might be true that there is an abundance of solar energy in the deserts, all these savings from solar power will soon be offset by the costs of cooling the mining rigs in such a harsh climate. Because of this reason, in case Mawson expands and plans to build other facilities, they are more likely to build them in the southern part of Australia, ideally in Tasmania or Victoria, since these areas have much lower average temperatures than the rest of the country.
If the mining rigs are immersed in a dielectric fluid, the cooling costs could be reduced by 20-30% while resistance to damage through dust and physical damage could also be improved. This method, however, could possibly increase the operating costs significantly.
To avoid energy dissipation through transmission, it is also important to make sure the facility is located as close as possible to electrical infrastructure. It has been estimated that in a modern power grid, roughly 6% of energy is lost during the transmission and distribution process.
Josh Frydenberg – Australia’s Treasurer also made an announcement to implement the largest overhaul to the digital payments industry within the past 15 years. Cryptocurrency is no doubt the main focus of this program. The mining industry, however, still faces plenty of challenges since the proposal for tax discount for renewable resources from Senator Andrew Bragg was not a part of this plan.
“A little disappointed they didn’t approve that particular component,
Hughes-Jones commented, adding he would rewrite the suggestion in a clearer manner in the future. “But it doesn’t deter Mawson from pursuing renewable energy projects in Australia.” According to Blockchain.com, the global Bitcoin mining hashrate is currently 208.875 exahases per second, highest number in the history. Australia now contributes 0.19% to the global hashrate.