For energy companies

Enhancing the competitiveness of power plant operation with data centers

Recent tightening market conditions along with the growing share of renewable energy sources have posed serious challenges for conventional power plants. During the last 2 to 3 years, solar panels have become so widespread that – under optimal weather conditions – a significant share of electricity need can be covered by solar energy. Public procurement usually favors renewable sources, meaning that when solar energy is available, conventional power plants may have to lower their production or even turn off the entire plant. As a result, operation of several power plants becomes redundant during this period, freeing up a lot of excess capacity. Renewable energy production tends to be very volatile, forcing conventional power producers to turn on and off their plant with a high frequency. Under such conditions, participation in public procurement can only be achieved through meticulous optimization of production where conventional market players are forced to manage their production proactively.

The rise of solar power has impacted the stock market, as well. Energy prices have been showing a decline in 2020, occasionally even going in the negative. Strict requirements of public procurements force producers to look for alternative sales channels in order to maintain profitable operation.

Solar plants can win higher tariff rates from government agencies that are secured until the investment has been paid off. However, when that favorable period expires, they need to look for new revenue streams, which might prove to be a challenge, given that production is too volatile for public procurement.

Only those power plants can survive under such harsh competition and strict market conditions who optimize their production to the extreme and can adjust their operations with high flexibility.

Maximizing the value of power generation without investing

The legitimacy of data center optimization stems from the fact that server parks do not require 100% availability because they capitalize on virtual server capacity they place at disposal. They are free to sell this capacity when they are in operation. Should there be no power available for the servers, server operators do not face any operating costs. Enerhash has come up with a value proposition that provides flexibility for the power generator for a certain period of the year to not supply the DATABOX electricity in order to be able to provide the lowest possible electricity price during the rest of the year.

A data center can provide enough flexibility that empowers power plants to leverage favorable market events such as high market prices. A stable base load keeps the power plant in operation at all times, making it easier to take advantage of market opportunities on both the stock exchange and public procurement tenders. Since the consumption of the data center can be turned off entirely, configured in 3000 W increments and scheduled ahead with an hourly or minutely precision, it can consume exactly the amount of excess capacity the power plant has.

Enerhash data centers provide a competitive price for base load consumption throughout the year, as well as the opportunity for the power plant to take advantage of favorable stock exchange prices. As the data center functions as a continuous base load consumer, participation in public procurement also becomes significantly easier.

What does the Enerhash DATABOX look like in practice?

We created our own data center with operation of the power plant in mind. Our data center, built on the structure of a standard 20-foot marine container, is completely mobile, meaning that it can be installed directly to the power source. The DATABOX can accommodate for 156 servers that have a combined consumption of 0.5 MW, which is a significant even on the scale of a power plant. The competence required for operation and installation is also taken care of by Enerhash, as well as the operational tasks related to IT technologies.

Framework for cooperation tailored to power plant production

We have developed two different models for cooperation depending on whether the power plant wants to make an investment. On the one hand, the power plant may want to invest its own capital to have the data center among its own assets. On the other hand, the power plant may not want to allocate resources for this purpose but wish to benefit from the synergies through the investments of the Enerhash Group customers. The latter solution therefore has no financial implications on the part of the power producer. We have worked out a legal and economic background for both versions.

Powering a data center, without investment

Should the server park remain an asset of the Enerhash Group, three contracts provide the legal framework. The Enerhash Group purchases electricity under a simple purchase contract from the power plant, which can take place without a special commercial licence since it takes effect on site. Physical placement of the container is covered by an area lease agreement, which is then connected to the plant grid under a connection agreement. These three contracts fully ensure the necessary legal background for cooperation. The legal framework includes long-term consumption guidelines which can be flexibly adjusted according to the needs of the power plant. Payment is made according to the amount of power consumed in HUF/KWh or EUR/KWh. Read our blog post to learn more about the details of this collaboration. 

Investing to a very own data center

In a more exciting model, the data center becomes the power plant’s own asset. In this case, we provide professional consulting and assistance during the installation and then we can manage the rental process of the established virtual capacity. The advantage of this model is that the operation of the data center can be fully subordinated to that of the power plant. There are no targets specified by a contract how much availability the plant must provide. By building an own data center, both energy production and data center operation can be optimized to the maximum, speeding up the return on investment. Returns tend to be extremely fast compared to other investments in the energy sector, as electricity can be marketed at a higher value. More information about this model can be found in this article.

Enerhash’s solutions for different types of power generators

Design of the Enerhash DATABOX allows installation at any source of power, including renewable energy sources, meaning that any type of power plant can enjoy the benefits of production optimization with data centers. The data center requires only 25 square meter of spare safe space. We advise to place the container as close as possible to the power source, given that installing only a short cable has serious financial implications. There are no other technical or physical requirements for the installation to take place. Should the power plant be unable to provide an internet connection, we assure a stable connection by mounting 4G antennas on the side of the container that receive signal from two different service providers at the same time. Our server parks have no specific cooling needs. Heat generated by the computers can leave freely through the louvre on the side of the container. The DATABOX is equipped with a power cord that requires a standard 400V 3-phase power supply.

District heating plants

Features of district heating plants are the most ideal for operating a data center. The entire business modeling phase was centered around the operation of these plants. During the summer, they only need to meet hot water demand, so they have a significant amount of excess capacity. We have developed a solution that makes production even in the summer months worthwhile and is built on electricity from cogeneration from September to June. Heat produced in the summer can be used to cool the server park with the help of an absorption cooler, so we can also utilize both the excess heat and electricity produced in the summer and generate revenue from it. When selling power to Enerhash, there is no need to build internal competence focusing on electricity sales. The district heating plant can enjoy a stable source of revenue from the electricity produced for a fixed price without having to manage sales on a daily basis. In addition to stable heat production, electricity sales can also be stabilized at a price that exceeds the average market price.

Natural gas plants

Provision of hedging option: Electricity generation from natural gas-fired power plants is based on the difference between the electricity price and the purchase price of natural gas (clean spark spread). When electricity prices are lower than the purchase price of natural gas, we provide a fixed price and the natural gas can be hedged against our purchase price. Power plant production can thus be exploited in the longer term and to a greater extent.

Hydroelectric power stations

For hydropower plants whose favorable tariffs guaranteed by a KÁT licence are soon to expire, we provide an excellent alternative for further operation with an immediate takeover contract for production. In case of high water flow, we can also utilize the excess capacity in addition to participating in MAVIR tenders, for which we provide a competitive price.

Solar power plants

In the case of new investments, data centers can accelerate return on the solar power plant, while the connection with a solar power plant has a positive effect on the return of the data center. Should the KÁT licence expire, the Enerhash DATABOX can provide a new revenue stream to assure future profitability.

We also provide an excellent alternative for investments where the consumer has not been activated and has failed or has not received favorable tariffs from the state. With the Enerhash DATABOX, these investments can be activated and put into operation previously unused solar power plants.

Biomass plants

If extra manure is available, an on-site data center will allow the power plant to start up. Surplus manure can be utilized when surplus production could not be sold in the traditional way because the data center is able to consume the electricity and provide a competitive price for it.

Renewable energy

Our mobile data centers can be installed to any renewable energy source. Volatile production of renewable power plants becomes balanced and predictable with the installation of our data centers. Return on investment is significantly accelerated through the utilization of excess capacity. By deregulating the mandatory takeover system, we provide a solution for the resumption of energy production with a fixed price takeover contract.

Oil and gas wells

Instead of burning the flare gases generated during the production of oil and gas wells in an environmentally extremely harmful way, they can be utilized by installing a gas separation device. Separated gases can be utilized directly on site by installing a gas engine. Electricity generated this way can be used directly at the gas engine.

Get in touch with us!

Please describe the features of the power plant in question, including the amount of excess capacity, date of availability, type and the location. If you are interested in a specific cooperation model, if that you are interested in making an investment or would tie up your excess capacities with the server park we provide.