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Clyde is being eyed for a proposed data centre that appears to to be heavily focused on cryptocurrency mining.

The 10MW data centre is planned for near the foot of the Clyde Dam and would collectively feature eight containerised data centres, each expected to hold 368 servers, a document reveals.

The energy consumed would be the equivalent of about 10,000 homes but could result in lower lines charges for Clyde and its surrounds long term.

Those details are contained in a Contact Energy resource consent application released to the Otago Daily Times by the Central Otago District Council.

The data centre would be owned and operated by UK-based digital infrastructure start-up Lake Parime on about .65ha of land owned by Contact, under a lease agreement.

The application states data centre operators were looking for secure renewable energy sources to power computers designed to process large volumes of data in response to emerging markets such as machine learning, data modelling and cryptocurrency mining.

The proposed datacentres would operate on “flexible demand”, meaning processing could be managed to reduce demand during periods of low river flows and optimised during periods of low electricity demand or when the Clyde Dam would otherwise be required to spill water Dunstan was at capacity.

The application also includes provision for a 3.5m-high noise-mitigation wall along the eastern and southern boundaries of the site and for landscaping and planting around the perimeter of the site.

The proposed development of a substation by lines company Aurora within the application site is linked to the development of the data centre.

From 2025, the proposed substation would improve the reliability of electricity supply to the Clyde township and wider Clyde area.

Until the substation became a shared-use site in 2025, all costs were being funded through the construction of the data centre.

From 2025, a cost-sharing arrangement would be in place resulting in lower (than otherwise) line charges to Aurora’s existing customers compared to the replacement of the Clyde-Earnscleugh substation on a stand-alone basis, the application says.

“The data centre operator will pay a share of the network charges and other common costs associated with the Clyde connection point, reducing the individual Clyde township household share of the payments for this infrastructure.”

Lake Parime would employ local contractors in construction and ongoing maintenance roles and create a “a small number of highly skilled maintenance jobs to manage the servers within the data centre and associated electronic and electrical services.

“More importantly, [it] will promote the development of high-performance computing infrastructure that could form the basis for a new industry for the area.”

 

Cryptocurrency

  • Cryptocurrency uses cryptographic signatures to verify all transaction records.
  • Those transactions are recorded on a blockchain and are created using the same ways as cryptography (the science of hiding information).
  • Digital signatures can be used to keep the transactions safe, and allow other people to check transactions are real.
  • The first cryptocurrencies were made to be free of government-given currencies.
  • Cryptocurrencies use “decentralised control”, meaning they are not controlled by one person or government “centralised” electronic money and central banks.
  • The control of each cryptocurrency works through a distributed ledger (a list of transactions shared by everyone), usually a blockchain, that serves as a public financial transaction database.
  • Bitcoin, first released as open-source software in 2009, is often called the first decentralised cryptocurrency.
  • Since then, more than 4000 cryptocurrencies (sometimes called “altcoins” coins) have been created.
  • “Mining” for the cryptocurrencies is power-hungry, involving heavy computer calculations to verify transactions.