Energy retailer takes out an option on crypto mining
Energy retailer LPE may get into crypto mining after raising $7.5 million in placement to help fund its role in a bio energy hub near Bundaberg.
The CBA has introduced new policies for crypto
The Sunshine Coast based company said the bio energy hub deal would mean it would be more involved in larger scale renewable energy generation, but it would also be able to convert $3 million of its $5 million capital works funding into a 50 per cent stake in Stak Mining, a crypto mining company that is a tenant at the bio hub.
Crypto mining is notoriously energy intensive. It is essentially the process by which new currencies, like bitcoins, are created and entered into circulation. It is also the way the network confirms new transactions.
LPE said should it convert its option over Stak, it would receive a share of the proceeds in cash generated from crypto mining operations at the bio hub, along with any additional mining operations that Stak develops from its renewables powered projects.
The bio hub has five tenants and has some completed buildings on site currently being used by the local council and Utilitas. The overall development was expected to be finished this year.
LPE said a premium energy price could be obtained by it being involved providing renewable energy to high usage tenants such as data centres and crypto miners.
LPE said the biohub would generate electricity from biogas, hydrogen and solar and batteries.
LPE would be the electricity retailer for the biohub and bill renewable energy behind the meter as well as the wholesale market. LPE would be using $5 million for capital works. It would receive a 15 per cent margin on the capital works funds plus a fee to supply electricity to tenants.
LPE said the biohub opportunity unlocked additional opportunities in higher margin renewable generation, data centres and crypto mining operations with excess green energy to be sold to the wholesale market and could include LPE customers.
Chairman Justin Perrett said it was an exciting time for the company and its involvement in the biohub would generate additional income with a healthy margin on our capital works funds.
He said the involvement in crypto mining was “potentially highly lucrative” was attractive to new and existing investors.
Before it exercises the option on Stak, LPE has to get regulatory approvals including those with the ASX which relate to it changing its business activities.
