Locals in New Zealand Town Protest Against New Mining Facility

By | April 3, 2022



Locals near Clyde Dam in Central Otago, New Zealand, decry the construction of a new data center by Contact Energy in partnership with Lake Parime, a UK-based digital infrastructure outfit providing blockchain and cryptocurrency services.

The new construction has stirred fear among locals that cryptocurrency’s energy-intensive mining will be the project’s primary purpose, effectively exporting local renewable energy without benefitting the surrounding community, opines Duncan Faulkner, chairman of the Guardians of Lake Dunstan.

Contact Energy reassured residents that the data center would not solely be used for mining. “Lake Parime will use the data center for a diverse range of high-performance computing applications. This may include blockchain and cryptocurrency, but also other decentralized computing activities such as machine learning, economic modeling, and data visualizations.”

Contact Energy subsidiary Simply Energy head Murray Dyer, in a further bid to reassure concerned residents, said that the data center would not need to run 24-7 like a traditional data center that prioritizes uptime. “The key issue is we can ramp that up and down so if that energy is required for critical local businesses and consumers, then we can turn that data center down, and that’s written into the contract,” he said.

Contact Energy disclosed that part of the deal to construct the new data center included bringing forward the construction of a new electrical substation to benefit the local power grid.

Noise a concern for residents

In the past, data centers in New Zealand benefitted local companies, using the facilities to store and retrieve vast amounts of data. Now, it seems, few locals will even be employed at the facility that will be run by a small contingent of specialized maintenance staff.

Locals have brought the well-known noise issue inherent in most mining facilities to attention, prompting commissioner Bob Nixon of the Otago District council to reassure residents that the plant complies with District Plan noise thresholds by including a noise mitigation wall close to the Clyde Dam, the third-largest hydroelectric dam in New Zealand.

A Norwegian cryptocurrency mining company is flying the flag high for sustainable cryptocurrency mining. Mining is the process whereby ‘miners’ compete to solve complex mathematical problems to add a new ‘block’ of transactions to a blockchain, a public digital ledger, earning new ‘coins’ in the process.

KryptoVault in Norway has managed to build a facility in Hønesfoss running off hydropower that contributes heat generated from mining activities to dry snow-dampened logs felled by local lumberjacks. The company is looking to dry seaweed through the heat generated in the future. CEO Kjetil Hove Pettersen says that harnessing the generated heat is not dissimilar to how El Salvador captures geothermal energy to use for mining, and decries the narrative that bitcoin mining is detrimental to the environment. “If you look at the total energy cost, globally, for any given thing, it’s always going to be huge – I think we can always compare to that of a small European country. That includes traditional gold mining, which takes more than four times the amount of energy as bitcoin mining,” Pettersen said.

KryptoVault also uses custom-designed noise-proofing to quieten the sound of the plethora of cooling fans needed to keep data center equipment running efficiently.

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