Cheap electricity for mining: is a gas engine power plant (GEPP) profitable?

Energy costs are one of the most acute problems in cryptomining. Over the past 25 years, the cost of electricity in Russia has increased more than 10 times: from 0.5 to 5.8 RUB/kWh. After the reform of tariff policy in 2022, the growth has accelerated and cross-subsidisation has been reduced. All this makes traditional grid connection increasingly less favourable. Against the backdrop of such trends, gas-fired generation is becoming a reliable and economically viable solution for data centres and mining hotels.

Why is it profitable to mine with gas?

A gas engine power plant (GEPP) is capable of generating electricity at a price starting from 2.2 RUB/kWh. This is almost 3 times lower than the current tariffs of grid suppliers. Moreover, the cost of gas-fired generation is stable, as it does not depend on market fluctuations and tariff reforms. The stations operate round the clock, withstanding a load of up to 100% of their nominal capacity. Their resource is from 50,000 to 80,000 motor-hours, which allows using them for up to 9 years without major repairs.

Easy connection and start-up

Gas piston stations do not require complex infrastructure. Even a low-pressure gas pipeline is suitable for connection. When building a new data centre, you can choose a region with the lowest gas prices and minimal logistics costs. Before installation, it is only necessary to obtain technical specifications from the regional gas distribution operator.

Maintenance and operation

Stations require routine maintenance every 1000-4000 motor-hours. This usually includes changing oils, filters and checking components for wear and tear. Due to the high automation and remote control system, the operation of the plant does not require a large staff. Many manufacturers offer service contracts for the entire service life of the equipment.

Associated gas and cryptocurrency mining

A gas engine power plant (GEPP) can operate not only on natural gas, but also on associated petroleum gas – a by-product of oil production. Today, oil companies are increasingly co-operating with miners. In 2020, Gazprom Neft officially launched a mining centre at its own field in Khanty-Mansiysk Autonomous Okrug, which made it possible to efficiently utilise APG and generate additional profit.

Financial model of gas engine generation

The 6MW mining centre is capable of handling between 1,500 and 3,000 ASIC devices. The average annual energy consumption will be about 17.3 million kWh:

Grid price: 5.52 RUB/kWh → 95.4 million RUB per annum

Gas generation price:

• Gas (4 million m³ pro 3.5 RUB): 14 mln. RUB
• Maintenance and repair: 18 mln. RUB
• Amortisation: 2.7 mln. RUB
• Taxes and other: up to 1.5 mln. RUB

Total: 36.2 million RUB per year – 2.6 times cheaper than a network connection.

Advantages of mining on a gas piston plant

Gas piston generation gives mining farms the following advantages:

• Reduced energy costs.
  Generating energy at a price from 2.2 RUB/kWh allows you to reduce costs by up to 70% compared to connecting to the centralised network.
• Increased profitability of equipment.
  Increased reliability and stable uptime increase the efficiency of ASIC-miners, reducing downtime and increasing profits.
• Environmentally friendly and autonomous.
  Installations are not dependent on overloaded power grids. They are ideal for remote locations and allow you to create a fully autonomous farm.
• Heat utilisation.
  Waste heat can be efficiently utilised for space, greenhouse or process heating, increasing the overall efficiency of the project.
• Flexibility in fuel selection.
  GEPPs operate on different types of fuel: natural gas, associated petroleum gas, liquefied gas, biogas. This allows the system to be adapted to the available resources of the region.
• High efficiency and reliability.
  Modern units achieve efficiency of up to 42% and operate in a round-the-clock mode with a resource of up to 80,000 motor-hours before overhaul.
• Easy start-up and operation.
  Most solutions support remote control, automatic diagnostics and connection to monitoring systems.

Disadvantages of gas piston power plants

Despite the obvious advantages, gas piston power plants have a number of features that should be taken into account when designing a mining infrastructure:

• The need for regular maintenance
  Maintenance is required every 1000-4000 motor-hours. This includes replacing technical fluids, filters and inspecting key components. Without a maintenance schedule, the risk of breakdowns increases.
• Limited power range
  Most GEPPs are designed for capacities up to 6-10 MW. Larger facilities will require the installation of multiple units, which complicates the infrastructure.
• Noise during operation
  Gas piston plants produce a significant amount of noise. Noise insulation or the use of special containers will be required near residential or office areas.
• Sensitivity to overloads and underloads
  Operating above 90 per cent or below 50 per cent of rated capacity reduces the life of the equipment. It is necessary to calculate the load accurately and select a unit with reserves.
• Dependence on gas quality
  Contaminated or unstable gas can cause detonation, ignition failure and other problems.
• Scheduled depreciation and overhaul
  After 50,000-80,000 engine hours, an engine overhaul is required. This requires a temporary shutdown of the equipment and additional costs.
• Permits and approvals required
  Before connecting to the gas infrastructure, it is necessary to obtain technical specifications and go through the approval process with the gas distribution organisation, which takes time.

How is a gas piston power plant (GEPP) organised?

A gas piston power plant is an autonomous complex that converts the chemical energy of gas into electrical energy. It consists of several key units, each of which fulfils a vital function in the process of generating electricity. The following is the structure of a GEPP using an example of an industrial plant:

The main components of a GEPP are:

• Gas engine is the heart of the system. It is fuelled by methane, biogas or associated gas. It converts the energy of fuel combustion into mechanical energy.
• Ignition system – ensuresignition of the fuel-air mixture in the cylinders.
• Crankcase ventilation system – removes oil vapours and prevents over-pressurisation inside the engine.
• Detonation control system – prevents cylinder damage by adjusting the ignition timing.
• Turbocharging – deliverspressurised air, increasing engine power without increasing displacement.
• Exhaust – removes exhaust gases, reducing engine load and improving environmental performance.
• Air filter – cleans incoming air to protect the engine from contaminants.
• Control panel – automates, monitors and remotely controls the operation of the plant.
• Synchronous generator – converts the mechanical energy of the engine into electricity with preset parameters.

This architecture allows the plant to operate continuously and reliably, ensuring a consistently low cost of electricity. Modern GEPPs have a high degree of automation, and all components are easy to maintain due to the modular design.

Gas piston and gas turbine power plants: what is the difference?

In addition to GEPPs, gas turbine power plants (GTPP) are used in the energy industry. Both types are suitable for mining, but each has its own characteristics:

Parameter	Gas engine power plant (GEPP)	Gas turbine power plant (GTPP)
EFFICIENCY	Up to 42%	30-35%
Start-up time	Minutes	Up to 1 hour
Maintenance	Simple and affordable	Requires qualified personnel
Scale	0.5-6 MW	5 MW and above
Loads	Suitable for variable	Ideal for constant
Installation price	Lower	Higher

Conclusion: for farms up to 10 MW, GEPP remains the best option. GTPPs are favourable for large industrial projects with high and stable load.

How to choose the right power plant for your application?

1. Estimate consumption: choose a plant with a 15-20% capacity reserve.
2. Consider the mode of operation: avoid constant loads above 90% and below 50%.
3. Choose the right fuel: methane is the best in terms of price and availability, but in some regions it is more profitable to use associated petroleum gas (APG) or biogas.
4. Evaluate the infrastructure: availability of gas pipeline, logistics, climate.

Conclusion

Gas-fired generation is economical, independent and stable.
GEPPs and GTPPs provide cheap electricity even far from centralised grids. They ensure continuous operation of equipment, which is especially important for the profitability of mining.