by John Belizaire, CEO
Last week we announced that Soluna Computing is getting acquired by Mechanical Technology, Inc. (Nasdaq: MKTY). The combined company — Soluna Holdings — will develop scalable data centers that can buy every excess megawatt of electricity produced by renewable energy power plants.
Though every CEO wants to say it, I really think this acquisition isn’t just another corporate financial transaction. This acquisition says several important things about the intersection of two red-hot sectors in the U.S. economy: Data centers and clean energy.
In short, this deal is a big deal. Let me tell you why.
First, the size of the market is enormous. While we see Soluna putting gigawatts of renewable energy-powered data centers online in the near future, the global market potential is hundreds of terawatts.
Second, computing — specifically the kind our data centers will host — will be the next part of the bridge from today’s economy, in which renewable energy is a supplemental source of power, to one that relies on renewable energy as baseload power.
That’s because computing can be a better battery if you will.
The power grid was built to use predictable amounts of power generated by burning relatively constant amounts of fossil fuels. It’s inflexible. Clean energy production is dynamic, driven by the availability of the wind and sun. It’s steady and inflexible. Renewable energy power plant owners say that among their costliest problems is they are often forced to curtail the energy production from their assets — by as much as 30 percent. They have to turn off production or even pay the grid to take their excess power.
Fixing that by building batteries and transmission will take years.
We need to scale wind and solar energy now. To put that into perspective: Current estimates are that renewable energy plant owners worldwide are forced to curtail around 225 terawatt-hours (TWh) of renewable energy each year. That means 14% of all solar power generation is wasted right now.
While renewable energy’s curtailment problem is growing, the demand for electricity to power data centers is growing quickly. And, the fastest-growing segment of computing is of a type that can be done in batches. It’s computing for cryptocurrency mining, artificial intelligence, video rendering, and scientific research that can be interrupted. Our solution is to build modular data centers for batchable computing right next to renewable power plants so we can buy every megawatt of power that’s currently being wasted through curtailment.
Third, our merger with MTI is the latest indicator that clean energy has grown big enough that it’s become its own industrial ecosystem. Renewable energy is now big enough to attract talent from other business sectors and catalyze a whole field of companies to provide solutions to handle its growing pains. We’re actually joining a competitive field of roughly 10 companies — an entire sector that’s barely a few years young.
Of course, I plan on making Soluna the leader in this field, a billion-dollar, global company that is enabling clean energy’s growth to accelerate. But the fact that there’s a green data center field that’s risen so rapidly tells you that big things are coming — and our acquisition has put us right in the center of it.