> In 2021 and especially in 2022, the global rates of inflation have changed our daily lives. With an annual rate reaching +8.9% in July 2022 in Europe
> Thanks to the long-term management of our energy costs in 2021, we did not immediately need to change our prices. However, at the end of 2022 and in 2023, part of our energy purchases coverage are coming to an end and we are going to end up buying energy at a higher price
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)
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).
All the regulation being in French, and the translated versions not being considered official is such a hindrance to doing anything in Quebec. Everything becomes substantially more complicated, involves a lot more people, and it is disjoint with the entire rest of Canada and the US in terms of your compliance and your staff. You can see why companies would avoid it even given the rather incredible cost reductions their power cost would offer.
In France I think the price of electricity for professionals has been multiplied by five in the past few months. The price of electricity for residential customers and small businesses has only increased by 5% because the French state and EDF are shouldering the difference.
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OVH is an horrible service provider... There web ui takes forever to load and is bugged, got several recurring payment that i couldnt even cancle without phone lol
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 center provider to do that negotiation, and they negotiate for rack space prices, so it's slightly different (thus why prices in regions can vary dramatically, though this is also labor, what the region can bear price-wise, etc.).
I assume they also have teams hedging power prices to keep those costs reasonable, while OVH and other tier 2's likely haven't reached that scale.
I'll briefly shill my product (crusoecloud.com) because we _do_ vertically integrate our power production and data centers by colocating modular data centers at oil wells (utilizing flare gas), wind/solar, etc. as a way of both keeping energy costs low/stable as well as solving related environmental issues (e.g. reducing methane emissions or providing base loads to renewables).
"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).
I read the article but don't see how it addresses my point.
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.
