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Grid Share plans to use energy generated by Pioneer Energy’s hydroelectric station in Alexandra for the 2MW data-mining centre, which will use up to 30% of the maximum electricity generated by the power station.
The data centre can be transitioned into cloud-based high-performance computing in the future and the deal with Pioneer is seen as a step towards supporting the transition to 100% renewable energy in New Zealand.
Grid Share was started by three New Zealand entrepreneurs — Tom Algie, Craig Lusty and Sam Kivi — who want to accelerate renewable energy growth and become the premier green blockchain and digital currency infrastructure company for New Zealand and abroad.
Grid Share chief executive Tom Algie said the company would use the opportunity to test technology to ramp power consumption up and down in real time, which bitcoin mining was suited for.
That would provide a powerful solution to the problem of integrating renewable generation with the electricity grid.
"Renewable energy expansion is not on track.
"Renewable energy production doesn’t match demand - we can’t tell the wind to blow so we can turn on the lights."
This mismatch caused volatile energy markets and stalled renewable investment, which was a growing issue as renewables increased, Mr Algie said.
"Renewables need a customer who can buy power when the grid doesn’t need it and turn off during peak periods."
Pioneer Energy chief executive Fraser Jonker said Grid Share approached Pioneer looking for a site for a data centre close to a source of hydro-electric power and the relationship was a win-win for the company.
"They have quite a bit of flexibility around stopping and starting the data centre."
The data centre and Monowai Power Station were also a good match in terms of scale, making it a good fit with Pioneer’s business model.
"It’s a commercial agreement where they [Grid Share] are the customer."
He believed allowing this sort of development would be good for not only Pioneer but also the country in the long term.
The data centre has been launched with an initial $2 million capital but further funding is being sought.
Monowai Power Station, fed by the Monowai River from Lake Monowai, dates back to 1921 and is one of New Zealand’s oldest hydro-electric plants. Its generating capacity stands at 7.6MW.
Two other data centres are planned near Invercargill and another one is being built beside the Clyde Dam.