February 22nd  2022 - News

Energy market crisis: what impact for Aqua Ray?

What issues do we face?

The major impact we are all facing is the increase in the cost of energy. A comparison of the market price of a MWh on February 10, 2021 and on the same day in 2022 shows this obvious increase.

The major impact we are all facing is the increase in the cost of energy. A comparison of the market price of a MWh on February 10, 2021 and on the same day in 2022 shows this obvious increase.

These data are variable, costs fluctuate, but we can see that the price per MWh has increased fourfold in the space of a year. This is an unprecedented crisis in the electricity markets with a considerable and lasting impact on our activities**. Like all of our colleagues, Aqua Ray is very strongly impacted by this crisis.

These data are variable, costs fluctuate, but we can see that the price per MWh has increased fourfold in the space of a year. This is an unprecedented crisis in the electricity markets with a considerable and lasting impact on our activities**. Like all of our colleagues, Aqua Ray is very strongly impacted by this crisis.

How Aqua Ray is handling this crisis

Aqua Ray is well equipped to deal with this situation. We operate our own infrastructure and negotiate our own power supply contracts.

Aqua Ray is well equipped to deal with this situation. We operate our own infrastructure and negotiate our own power supply contracts.

By July 2021, we had secured a large portion of our supply costs for several years. We will thus be able to continue for a few years to buy a large part of our supply at a negotiated rate well below the market price. Our electricity supplier was able to afford this thanks to the ARENH scheme (Regulated Access to Historic Nuclear Electricity).

By July 2021, we had secured a large portion of our supply costs for several years. We will thus be able to continue for a few years to buy a large part of our supply at a negotiated rate well below the market price. Our electricity supplier was able to afford this thanks to the ARENH scheme (Regulated Access to Historic Nuclear Electricity).

What is the ARENH?

ARENH is a mechanism integrated into the NOME law of December 7, 2010 (New Organization of the Electricity Market) which results from the commitment made by France to the European Commission. Nous disposons en France d’un parc de centrales nucléaires historiques avec un coût de revient moins cher.
This system therefore allows all suppliers to purchase electricity from the ARENH and no longer directly on the energy market. However, the purchasing conditions are limited. The electricity purchase quota granted to suppliers under this scheme has been increased in 2022 from 100 TWh (i.e. 100,000,000 MWh) to 120 TWh for €42/MWh. However, it is still insufficient to cover all the demand coming from energy suppliers, which would amount to 160 TWh for the last period. Although the ARENH has been integrated into the energy code since July 11, 2011, this device will be stopped at the end of 2025. We don't know by which system it could be replaced.

ARENH is a mechanism integrated into the NOME law of December 7, 2010 (New Organization of the Electricity Market) which results from the commitment made by France to the European Commission. Nous disposons en France d’un parc de centrales nucléaires historiques avec un coût de revient moins cher.
This system therefore allows all suppliers to purchase electricity from the ARENH and no longer directly on the energy market. However, the purchasing conditions are limited. The electricity purchase quota granted to suppliers under this scheme has been increased in 2022 from 100 TWh (i.e. 100,000,000 MWh) to 120 TWh for €42/MWh. However, it is still insufficient to cover all the demand coming from energy suppliers, which would amount to 160 TWh for the last period. Although the ARENH has been integrated into the energy code since July 11, 2011, this device will be stopped at the end of 2025. We don't know by which system it could be replaced.

Coming back to our business, thanks to our supply contracts negotiated over several years, only a small part of our electricity consumption will have to be purchased at market prices. Despite this, the impact on our cost structure remains considerable. To be fully transparent, this implies that :

Coming back to our business, thanks to our supply contracts negotiated over several years, only a small part of our electricity consumption will have to be purchased at market prices. Despite this, the impact on our cost structure remains considerable. To be fully transparent, this implies that :

  • 79% of our energy consumption will be sold to us at the initial price negotiated in our contract** with our electricity supplier;
  • 21% of our energy consumption will be sold to us at the current market price, this is a direct consequence of the overflow of the ARENH capacity.

Some of our colleagues are often forced to make substantial price increases (we have already seen increases of 14% to 40%) retroactive to January 1, 2022. This increase is understandable if they are required to purchase their electricity at market prices for perhaps a higher proportion than we are.

Some of our colleagues are often forced to make substantial price increases (we have already seen increases of 14% to 40%) retroactive to January 1, 2022. This increase is understandable if they are required to purchase their electricity at market prices for perhaps a higher proportion than we are.

However, we are committed to mitigating the impact on our customers by passing on our advantageous position. That's why, from April 1, 2022 only, we are implementing a 10% across-the-board rate increase for infrastructure components.

However, we are committed to mitigating the impact on our customers by passing on our advantageous position. That's why, from April 1, 2022 only, we are implementing a 10% across-the-board rate increase for infrastructure components.

This increase is of course limited to infrastructure components: colocation, supply of physical and virtual servers. Other services such as outsourcing or network transit for example are not affected.

This increase is of course limited to infrastructure components: colocation, supply of physical and virtual servers. Other services such as outsourcing or network transit for example are not affected.

What about the future?

Our ambition is to build a series of the world's greenest data centers in the coming months.
Revolutionary, our concept will allow, in addition to the implementation of cooling systems by geothermal energy, to recycle the waste heat released by all the computer servers to supply a production unit of micro-algae such as Chlorella (rich in vitamins, iodine and dietary fiber).

As a result of this energy crisis, we are also planning to become fully independent including in the production of our electricity. We are currently studying the different options, including the opportunity to install Hydrogen generators to allow our data centers to be erased in the best possible ecological conditions.

Our ambition is to build a series of the world's greenest data centers in the coming months.
Revolutionary, our concept will allow, in addition to the implementation of cooling systems by geothermal energy, to recycle the waste heat released by all the computer servers to supply a production unit of micro-algae such as Chlorella (rich in vitamins, iodine and dietary fiber).

As a result of this energy crisis, we are also planning to become fully independent including in the production of our electricity. We are currently studying the different options, including the opportunity to install Hydrogen generators to allow our data centers to be erased in the best possible ecological conditions.

How does this crisis impact society?

The energy crisis has only just begun. It will shake up the whole of society, well beyond our sector of activity. Some players will disappear, others will have to change their business model. The solution is not simple, but this situation reinforces our vision of the necessary independence of our production chain. Producing a Sovereign Cloud service without recourse to subcontracting means that we are in the best position to anticipate and withstand unforeseen events when they occur.

The energy crisis has only just begun. It will shake up the whole of society, well beyond our sector of activity. Some players will disappear, others will have to change their business model. The solution is not simple, but this situation reinforces our vision of the necessary independence of our production chain. Producing a Sovereign Cloud service without recourse to subcontracting means that we are in the best position to anticipate and withstand unforeseen events when they occur.

For further information

The energy market in Europe

Before 1999, the energy market was restricted. In France, all electricity consumers had to turn to the same suppliers: EDF or Engie (formerly GDF). The electricity and gas market has gradually opened up to competition, giving consumers the opportunity to choose their own energy suppliers (French or European). The entire French electricity market has been opened to competition:

Before 1999, the energy market was restricted. In France, all electricity consumers had to turn to the same suppliers: EDF or Engie (formerly GDF). The electricity and gas market has gradually opened up to competition, giving consumers the opportunity to choose their own energy suppliers (French or European). The entire French electricity market has been opened to competition:

  • From July 2004 for companies and local authorities
  • As of July 2007 for individuals

Nowadays, the situation of the energy market is alarming. Energy needs are constantly increasing, to the point where the demand imposes the use of polluting production techniques (gas, coal...). Renewable energy sources are growing, but their capacity to produce energy remains uncertain as they are dependent on natural factors, therefore, uncontrollable (wind, sun ...).
The energy market is regulated. All energy producers sell their energy on this market. However, the market is not regulated by supply and demand and the selling price is determined according to the origins of production which are, in turn, classified by level and by purchase order. The regulations state that each MWh purchased on the electricity market must be aligned to the selling price of the last generation source called up, in our current case: gas-fired plants. However, the year 2021 is the highest increase in the price of gas with an increase of 57%. How can this increase be explained?

Nowadays, the situation of the energy market is alarming. Energy needs are constantly increasing, to the point where the demand imposes the use of polluting production techniques (gas, coal...). Renewable energy sources are growing, but their capacity to produce energy remains uncertain as they are dependent on natural factors, therefore, uncontrollable (wind, sun ...).
The energy market is regulated. All energy producers sell their energy on this market. However, the market is not regulated by supply and demand and the selling price is determined according to the origins of production which are, in turn, classified by level and by purchase order. The regulations state that each MWh purchased on the electricity market must be aligned to the selling price of the last generation source called up, in our current case: gas-fired plants. However, the year 2021 is the highest increase in the price of gas with an increase of 57%. How can this increase be explained?

  • France imports 99% of the gas it consumes;
  • Gas demand exceeds supply;
  • Norway, Europe's main gas supplier, suffered damage to its main gas liquefaction plant in September 2020;
  • Russia, another major gas supplier, wants to limit its gas production for Europe;
  • The 15% increase in heating usage during the winter of 2021.

Note that every month, the price of gas is revised by the Commission de régulation de l'énergie (CRE), which sets the price based on costs:

Note that every month, the price of gas is revised by the Commission de régulation de l'énergie (CRE), which sets the price based on costs:

  • supply ;
  • transportation ;
  • distribution ;
  • storage;
  • gas marketing.

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