11–20 of 22 posts
Well that's lame. There was 0 increase in electricity here, neither did the salaries. They could have use this fact to be more competitive.
do any of the hyperscalers have vertical integration in energy production for their datacenters?
My understanding is that for their own data centers (e.g. us-east-1 or us-central1) they are able to negotiate excellent costs of power by soliciting 100MW+ long term contracts, so they don't really need to. Energy is a lower margin business than tech, and they'd rather not get into the messy business of power generation. For colocation data centers (e.g. Tokyo or Singapore regions), they're more reliant on the data…
How can hedging keep costs reasonable? It can help insulate you from short term price volatility, but you pay for that (as your counterparty will want to be paid for assuming the risk).
What am I missing?
Earlier quoted context omitted.
My understanding is that for their own data centers (e.g. us-east-1 or us-central1) they are able to negotiate excellent costs of power by soliciting 100MW+ long term contracts, so they don't really need to. Energy is a lower margin business than tech, and they'd rather not get into the messy business of power generation. For colocation data centers (e.g. Tokyo or Singapore regions), they're more reliant on the data…
"I assume they also have teams hedging power prices to keep those costs reasonable" How can hedging keep costs reasonable? It can help insulate you from short term price volatility, but you pay for that (as your counterparty will want to be paid for assuming the risk). What am I missing?
Earlier quoted context omitted.
"I assume they also have teams hedging power prices to keep those costs reasonable" How can hedging keep costs reasonable? It can help insulate you from short term price volatility, but you pay for that (as your counterparty will want to be paid for assuming the risk). What am I missing?
I consider a long term PPA a hedge against near term volatility. C.f. https://www.fia.org/marketvoice/articles/derivatives-markets...
In any case, let's assume OVH had engaged in a hedge transaction betting that energy prices would go up. That would have positive value for them. But the hedge would be settled financially.
It would not limit OVH's marginal cost of electricity. And your marginal cost is what matters when you're setting prices.
Well that's lame. There was 0 increase in electricity here, neither did the salaries. They could have use this fact to be more competitive.
Electricity prices for consumers currently are heavily subsidized in France because otherwise there would be riots: spot market prices are regularly above 0.40€ and the current end user price would probably be around 0.80€. OVH is a business, thus they have to pay the real prices. In the end we will all pay via massive inflation for the competence of the European politicians.
(Edit: to be clear the OVH rate increase is still pretty reasonable, and is justified by other factors)
Earlier quoted context omitted.
Electricity prices for consumers currently are heavily subsidized in France because otherwise there would be riots: spot market prices are regularly above 0.40€ and the current end user price would probably be around 0.80€. OVH is a business, thus they have to pay the real prices. In the end we will all pay via massive inflation for the competence of the European politicians.
They also have a big datacenter here in quebec impacted by the rate increae, and our electricity prices haven't really increased. Prices for industrial uses here are around 0.08-11$(CAD) per kWh. (Edit: to be clear the OVH rate increase is still pretty reasonable, and is justified by other factors)
Earlier quoted context omitted.
They also have a big datacenter here in quebec impacted by the rate increae, and our electricity prices haven't really increased. Prices for industrial uses here are around 0.08-11$(CAD) per kWh. (Edit: to be clear the OVH rate increase is still pretty reasonable, and is justified by other factors)
With negotiation Hydro Quebec is substantially less than those numbers.
Earlier quoted context omitted.
With negotiation Hydro Quebec is substantially less than those numbers.
Yeah, it is actually crazy how cheap even the listed prices (for example L-rate pricing) can be here. I'm surprised we don't have more datacenters (there are lots of them, but not as much as I'd have thought).
On mobile this is unreadable: each column is converted to a row with no label.