Idea inspired by the challenges of the energy industry
As brothers, we have been keeping a close eye on blockchain technologies and innovations in the digital sector. We have also recognized that these important paradigm shifts bring about new challenges that the industry must solve in order to enjoy the benefits of these new technologies on a large scale. One of these challenges is the immense energy demand of data centers that is also responsible for the security of the system.
Daniel has spent several years in the energy industry, which has led him to recognize the potential of production optimization with data centers. Power plants face strict market regulations beside an ever-intensifying competition, forcing energy producers to look for alternative solutions to optimize their production. In many cases, they need to schedule production meticulously on an hourly, minutely or even secondly basis to ensure profitability and competitiveness. The reason for this is that the market price of electricity is highly volatile. We have come across negative prices even recently. It has become clear for Daniel that such price levels make production unprofitable and result in plants having to turn operations on and off even several times a day. Such market conditions free up a significant amount of capacity of power generators.
Accurate modelling was critical to validate the idea
A long modelling process followed the recognition of the idea – to overcome the challenges of both industries at the same time. Daniel has immersed himself in the operation of blockchain servers and gained the necessary know how to test the idea. As a result of the test period, he organized the operation of data centers at power plant sites into a commercially well-calculated system. Meanwhile, he received positive feedback from both server operators and energy producers who had already begun to look for alternative sales channels for their excess capacities. At this point, plants face another obstacle since on-site consumers usually demand 100% availability in contrast to server parks that sell virtual server capacity any time when they are in operation. This way, a data center does not only provide an additional source of revenue, but also extra flexibility in production.
Business modelling has highlighted the fact that scale is an important factor of profitable operation. Economical operation is only feasible at a large scale, which required Balázs’s expertise.
Road from technical implementation to an operating business
Balázs is the one who immediately recognizes the opportunities and problems inherent in digitization. He has constructed the digital processes of many companies, enabling business process optimization and scalability. Balázs has extensive experience in all areas of digitization across a wide variety of industries.
We have designed a model that is built on institutional investment where a reliable legal environment, corporate and legal structuring is a must. Previous experiences of the founders with larger corporations and their business strategies have proved to be critical in this process.
This is how Enerhash was born from our collaboration, built on the professional experience and insights into the industry of the both of us. The first industrial-scale site tests were conducted in the fall of 2019, however, they had been preceded by a year-long preparation. To date, we have developed the technological, legal and economic framework for operational operations that are essential for our activities to be scalable.
Our goals for the near future
Our mission is to map and maximize the value of excess capacities of energy producers in Central and Eastern Europe. Optimizing power plant production with data centers is still considered to be an innovative solution in Europe, even though there are numerous international precedents demonstrating the benefits of investing in data centers. Enerhash aims at laying the cornerstone for the entire industry with an affordable and viable solution for both power plants and server owners.
Benefits of these synergies will also be made available by Enerhash to server owners in the form of affordable electricity prices, system management and maintenance services. In addition to additional flexibility, we thrive to improve our value proposition for power producers constantly, so that the DATABOX can serve as an alternative to energy storage units.
Our goals for 2020/21 include setting up a network of data centers with a consumption of more than 5 MW, which will enable server owners to enjoy profitability due to industrial rates. In addition, we aim to map an additional 40 MW of excess capacity by the end of 2021. In addition, we also consider the parallel development of stable, corporate operations to be of paramount importance. Through our activities, we want to set an example in the industry and encourage investment in data centers by having a framework in place for operation, infrastructure and technical background.