Redbank Power Station’s Renaissance: Bitcoiners Sign Up to Buy Cheap & Reliable Coal-Fired Power

Bitcoiners come to where the power is: Redbank, NSW

 

For power consumers searching for the cheapest and most reliable power, coal is the only answer. Crypto-currencies, like Bitcoin, have been a bonanza; not only for risk-hungry techie investors (not to mention risk-averse drug smugglers and money launderers), they’ve been a windfall for power generators – provided those generators can deliver it reliably and at 1970s prices.

The servers used to run the block-chain programs upon which these virtual currencies depend, chew up veritable mountains of electricity. Hence their operator’s interest in sourcing the cheapest power there is. And, in Australia, that means coal-fired power.

The 151 MW Redbank Power Station, located near Singleton, in the Hunter Region, NSW, was built using private money by Babcock & Brown, started operating in 2001 and was mothballed in October 2014, after a messy liquidation of the entity in control, Redbank Project Pty Ltd.

Now, power hungry crypto miners want to fire it up once more, to get power at a tiny fraction of what NSW power consumers are forced to pay to support their State’s wind and solar obsession.

Gamechanger: Chinese Crypto Miners can get 8c cheap electricity in Australia using our coal power
Jo Nova Blog
Jo Nova
1 May 2018

Wow. Wait til word gets out. This is dynamite.

Chinese Bitcoin miners are reopening the Hunter Valley coal power station called Redbank in NSW. They have a deal that gets around our gargantuan, mismanaged grid by buying coal power direct for 8c/kWh, while Australians in the same place pay 28c/kWh.

This is exactly the nightmare the head of the Australian Energy Management Organisation (AEMO) spoke of just last week — that “big players could abandon the grid”. That’s a degenerate spiral leaving a shrinking pool of suckers to pay for the inefficient, bird-killing, blackout prone, witchdoctor grid.

Bitcoin mining’s growing demand for cheap energy revived a shuttered coal mine
Ashat Rathi, Quartz

Consumers there pay, on average, $A0.28 ($0.22) per kilowatt-hour (kWh) for electricity. But Hunter Energy, which owns Redbank, are offering the crypto miners electricity at a fraction of the cost. The “first-of-its-kind” deal, as the Age puts it, will see the crypto miners pay only A$0.08 per kWh in the day and A$0.05 per kWh at night. Hunter Energy told the Age that the price is feasible because the electricity produced at the coal power plant would go straight to the crypto miners, bypassing—and thus, presumably, avoiding the costs of using—the grid. (Quartz has reached out to Hunter Energy for a comment.)

This tells everyone all they need to know about “cheap” renewables. Eight cents is the big-commercial retail rate of coal powered reliable electricity in Australia, and anything else is nuts.

The cheap deal will mainly apply to those close to the plant (near Singleton) because building long transmission lines is too expensive. Any day now, the large smelters in NSW will start adding up the cost of either relocating or building a transmission line.

It’s not surprising that this comes from crypto industry first. It must be one of the most transportable high-electricity-need industries there is.

Three messages here:

  1. The free market can solve Australian electricity price hell in a flash.
  2. Coal power is cheap, cheap, cheap, and even small coal plants are viable and valuable. (This one is only 150MW)
  3. Wind and solar are not competitive. Subsidized renewables are the major thing making our grid expensive.

We could run again as a nation using coal for our entire baseload — with some gas to power the peaks. The only thing stopping us is our desire to change the global climate.

Please, someone add up the total octopus-costs of bizarre weather-changing policies.

The Turnbull government will surely try to ban this or tax it to oblivion.

Big implications – 130MW of cheap electricity suddenly available in the Hunter Valley
Here’s a “disrupter” Audrey Zibelman (the AEMO head) didn’t see coming. The Australian market is begging for cheap electricity and right now one place, ONE, can offer it at a third of the price that everyone else pays:

Hunter Energy says cryptocurrency mining will only consume, at most 20 megawatts (MW) of the coal plant’s 150MW capacity. The region “needs more baseload power,” Hunter Energy’s CEO Jim Myatt told the Age. Baseload power is industry jargon for the ability to provide power on demand, which is something solar and wind power cannot do because they are beholden to the vagaries of nature.

Suddenly the land and buildings near Redbank just stepped up in valuation. If you run a small business (or big one) where electricity is a large part of your costs, and you can move to tap into that, why not?

How about our other recently closed coal plants in Australia? What other towns and areas would be reincarnated as cheap manufacturing or “mining” zones? Imagine what this could do for the LaTrobe Valley? Collie in WA? Liddell?

Which of these can be reopened, and which have been blown up?

I’ve suggested this scenario on the blog before — in a free market people would band together to fund their own coal power. I wondered if large miners could do it, but I assumed it would be illegal.

Redbank, small, “carbon polluting” and newish coal plant
According to Wikipedia — Redbank is a small coal plant commissioned in 2001. It used coal tailings, was theoretically the least efficient most greenhouse gas generating plant in Australia, was (maybe) hurt by carbon taxing policies, closed in 2014 and will be reopened in early 2019.

Redbank was fuelled by beneficiated, dewatered tailings from the Mount Thorley Warkworth mine at Warkworth, delivered by conveyor. In lay terms this is the part of the coal waste which would otherwise not be utilised, and simply buried as the mines progress.

According to Carbon Monitoring for Action (CARMA), in 2007 Redbank emitted more climate change and global warming causing greenhouse gases per unit of electricity generated than any other power station in Australia.[3] CARMA estimates this power station emits 1.06 million tonnes of greenhouse gases each year as a result of burning coal.[4]

(Note that no data from the actual plant, operator or Australian Government is actually used to base these approximate assumptions on. CARMA uses a statistical model that predicts CO2 emissions given the size, age, fuel type, estimated capacity utilization, and engineering specifications of individual plants.)

Like all NSW coal plants Redback was hard hit by the carbon tax:
Pat at commenting in 2012

17 April 2012: The Age: Brian Robins: Biggest carbon emitter slashes asset value as tax looms

The state-owned power generator has cut asset values by more than a third, to $1.1 billion from $1.86 billion, by booking a heavy $700 million write-off in the first such big financial hit due to the looming carbon tax introduction. As the nation’s largest emitter of carbon dioxide, Macquarie Generation faces a direct annual tax of $460 million, which will flow into the government’s coffers, if it maintains electricity output at present levels….

Victoria has dirtier coal-fired power stations as they use brown coal, which emits more carbon dioxide. As a result, its generators will receive hundreds of millions of dollars in compensation from the federal government, which will allow them to continue polluting.

The only NSW power station to receive support from the federal government is a small producer, Redbank, which is to receive just $8.8 million. ”This loss of value is a direct hit to New South Wales as a result of federal Labor’s carbon tax,” said NSW Finance Minister and Acting Treasurer Greg Pearce.

Victorian brown coal plants received $2b in compensation for the carbon tax. Many of these were owned by foreign companies. The NSW government owned Macquarie and got almost nothing.

In any case, why give compensation for a tax designed to put the same businesses out of business? Insanity.
Jo Nova Blog

Power hungry business plugs directly into coal-fired power plant.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Jackie Rovensky says:

    I cannot say I know anything about this Bitcoin stuff but what I can see is that AEMO and others are worried that if too many begin to look after our own energy supply – including big business – the cost of energy for everyone else will rise to enable the Grid to stay operational for those who cannot afford to go solo. Don’t forget we have been told the reason energy prices are high is because of home installation of solar for a long time now!!!
    Well what are we doing now but paying through the nose for Renewables, we are paying high energy prices and where does the money come from for Governments to offer subsidies!
    We are paying over and over again for something that is unreliable and costing US a fortune already. All while coal is actually keeping the grid operational.
    If there are people willing to invest in re-establishing a coal plant then all the guff about coal being dead and not worth investing in is nothing more than a ‘smoke’ screen, put up by the renewables money grabbing crowd.
    The more ‘renewables’ installed onto the grid the more the cost increases and the more people look to go completely off grid or to supplying part of their own needs.
    Inevitably the Grid is going to become even more chaotic and unreliable with increasing costs to stabilise and operate it.
    If this cannot be seen as a danger to our energy supplies in this country then we are doomed. The whole idea of this massive grid system was to ensure energy was available when and where it was needed at a price people could afford. It was meant to bring the connected States together.
    Instead it is now driving wedges between States as they compete to build more and more ‘renewables’ to meet some pie in the sky international thought bubble. A bubble that is going to burst and leave this Nation floundering.
    The sooner our Governments get their heads around what is happening and stand up for this Nation and not some idiotic ideologically strangled international body the better.
    We can help prevent damaging pollutants entering the atmosphere, but in a way that does not destroy and weaken us as a people or nation.

  2. Terry Conn says:

    No doubt the NSW government will not allow this deal . Zibelman just loves the idea of ‘disruptors’ killing off the national grid and users being forced to source their own independent supply, provided it is a renewable source – and every government in the nation supports that. If this is allowed to proceed then big users will no doubt buy up the old power stations and perhaps relocate their businesses to avoid transmission or alternatively build new coal fired power stations next door – none of our witless governments will allow this, they want to send us broke first by paying exhorbitant costs trying to run the nation on subsidised renewables plus backup schemes.

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