# ELECTRA — CaSS Model: Formulas & Assumptions

Model version: April 2026
© 2026 Project CaSS | PROPRIETARY AND CONFIDENTIAL

---

## Business model summary

Curtailed solar energy (otherwise wasted due to Cyprus grid limitations) is captured by a Battery Energy Storage System (BESS) and used to power a GPU compute node. The compute node sells AI inference capacity via DePIN networks (Akash, io.net), earning compute revenue that is a multiple of what the same energy would earn as a grid export.

```
Solar PV → [curtailment event] → BESS → GPU Compute Node → DePIN Network → AI Jobs → Revenue
```

The core arbitrage: every kWh of curtailed solar that would earn ~€0.09 on the grid instead earns €1.00–€1.50+ through compute.

---

## 1. Solar energy generation

### 1a. Gross daily generation

```
solarGrossDay = pvKwp × sunHrs
```

Where:
- `pvKwp` = installed solar PV capacity in kilowatt-peak
- `sunHrs` = peak sun hours per day (Cyprus average: 6–7 hrs/day)
- Result: kWh of gross energy generated per day

### 1b. Curtailed energy

```
curtailedDay = solarGrossDay × curtailmentRate
```

Where:
- `curtailmentRate` = fraction of gross generation that is curtailed by the grid operator (default: 47%)
- Result: kWh/day that cannot be injected into the grid

### 1c. Self-consumed energy

```
selfConsDay = solarGrossDay − curtailedDay
            = solarGrossDay × (1 − curtailmentRate)
```

This is the portion consumed on-site or exported at the net billing wholesale rate.

**Cyprus curtailment data:**
- 2025 full-year: 47.44% curtailment rate (306 GWh wasted)
- Jan–May 2025: 58% curtailment rate (145,000 MWh curtailed)
- Source: CyprusGrid / pv-magazine, January 2026

---

## 2. BESS energy capture

### 2a. Usable energy from BESS per day

```
bessUsableDay = min(curtailedDay, bessCapacity) × roundTripEfficiency
```

Where:
- `bessCapacity` = BESS installed capacity in kWh
- `roundTripEfficiency` = fraction of energy retained after charge/discharge cycle (default: 92%)
- `min()` = BESS cannot store more than its capacity in a single day

Result: kWh/day available to power the GPU node after BESS losses.

**Note on sizing:** If `curtailedDay > bessCapacity`, the BESS is the constraint — some curtailed energy goes uncaptured. If `curtailedDay < bessCapacity`, the curtailment is the constraint. Optimal BESS sizing matches the node's daily energy demand:

```
optimalBessKwh ≈ nodeKw × targetComputeHoursPerDay / roundTripEfficiency
```

---

## 3. GPU compute hours supported

```
computeHrsDay = min(bessUsableDay / nodeKw, 24)
```

Where:
- `nodeKw` = total power draw of the GPU node in kilowatts (see hardware table, section 9)
- Result: maximum hours of continuous compute the BESS can support per day
- Capped at 24 — a node cannot run more than 24 hours/day

---

## 4. Compute revenue

### 4a. DePIN floor rate

The floor rate is the market-clearing rate for GPU compute on the chosen DePIN network. This is the wholesale cost of demand — what the network pays providers.

| GPU       | Akash (infer) | io.net (infer) | Multi-network |
|-----------|--------------|----------------|---------------|
| RTX 4090  | $0.25/hr     | $0.28/hr       | $0.27/hr      |
| H100 SXM  | $1.14/hr     | $1.20/hr       | $1.17/hr      |
| H200 SXM  | $2.82/hr     | $2.60/hr       | $2.71/hr      |

Source: Akash/Akave blog (Jan 2026); Vast.ai live marketplace (Apr 2026).

### 4b. Platform rate (what customers pay)

The platform charges customers a managed service premium above the DePIN floor:

```
platformRate = floorRate × (1 + markup)
```

Where:
- `markup` = platform premium (default: 40%)
- Justification: clean UX, SLA guarantees, USD billing with no token complexity, EU datacenter compliance

### 4c. Paid compute hours per day

```
paidHrsDay = min(computeHrsDay, utilisationRate × 24)
```

Where:
- `utilisationRate` = fraction of available GPU-hours that generate paid revenue (default: 65%)
- `computeHrsDay` = BESS-supported hours from section 3
- The binding constraint is whichever is smaller: BESS capacity or demand

### 4d. Daily revenue

```
revenueDay = gpuCount × platformRate × paidHrsDay
```

Where:
- `gpuCount` = number of GPUs in the node (all configurations: 8 GPUs)

### 4e. Monthly revenue

```
revenueMo = revenueDay × 30
```

---

## 5. The kWh arbitrage

This is the core investment thesis expressed as a ratio.

### 5a. Compute revenue per kWh consumed

```
computePerKwh = revenueDay / (nodeKw × paidHrsDay)
```

This answers: for every kWh of electricity the GPU node consumes, how much revenue does it generate?

### 5b. Grid export revenue per kWh

```
gridPerKwh = gridExportRate
```

Under Cyprus net billing (from Jan 2026), surplus solar is compensated at the wholesale market rate, approximately €0.08–0.12/kWh.

### 5c. Arbitrage multiple

```
arbitrageMultiple = computePerKwh / gridExportRate
```

At default settings (H100, Akash, 40% markup, 65% utilisation):
- Compute earns approximately €1.20–€1.50/kWh
- Grid export earns approximately €0.09/kWh
- **Arbitrage multiple: ~13–17×**

### 5d. Grid export baseline (monthly)

```
gridRevMo = curtailedDay × 30 × gridExportRate
```

This is the opportunity cost — what the curtailed energy would earn if exported instead of converted to compute.

---

## 6. Operating expenditure (OpEx)

### 6a. DePIN network cut

```
networkCut = revenueMo × 0.10
```

10% of gross revenue paid to the DePIN routing network (Akash / io.net). This replaces traditional customer acquisition cost (CAC). Range: 5–20% depending on network.

### 6b. BESS operations & maintenance

```
bessOm = (bessCapex × 0.005) / 12
```

Annual BESS O&M estimated at 0.5% of CapEx, amortised monthly. Covers inspection, firmware updates, and minor component replacement.

### 6c. GPU node operations & maintenance

```
gpuOm = (gpuCapex × 0.015) / 12
```

Annual GPU O&M estimated at 1.5% of CapEx, amortised monthly. Covers hardware warranty top-up, thermal management, and minor repairs.

### 6d. Colocation / hosting

Fixed monthly cost for rack space, cooling, power distribution, and network uplink:

| GPU       | Colocation/mo |
|-----------|---------------|
| RTX 4090  | €200          |
| H100 SXM  | €800          |
| H200 SXM  | €900          |

### 6e. Total monthly OpEx

```
totalOpex = networkCut + bessOm + gpuOm + coloMo
```

---

## 7. Profit and payback

### 7a. Net monthly profit

```
netProfitMo = revenueMo − totalOpex
```

### 7b. Total CapEx

```
totalCapex = pvCapex + bessCapex + gpuCapex
           = (pvKwp × pvCostPerKwp) + (bessKwh × bessCostPerKwh) + gpuNodeCost
```

### 7c. Payback period

```
paybackMonths = totalCapex / netProfitMo    (when netProfitMo > 0)
paybackMonths = ∞                           (when netProfitMo ≤ 0)
```

### 7d. Annual revenue and profit

```
yr1Rev = revenueMo × 12
yr1Net = netProfitMo × 12
```

### 7e. 3-year cumulative net profit (after CapEx recovery)

```
yr3Net = (netProfitMo × 36) − totalCapex
```

### 7f. Simplified 3-year IRR

An approximation of the internal rate of return over a 3-year horizon:

```
IRR ≈ ((netProfitMo × 36 / totalCapex) ^ (1/3) − 1) × 100
```

This is a simplified annualised return, not a full DCF IRR. Use for directional comparison only.

---

## 8. Seasonal adjustment (chart only)

The monthly revenue chart applies a seasonal multiplier to reflect Cyprus solar irradiance variation across the year:

| Month | Multiplier | Month | Multiplier |
|-------|-----------|-------|-----------|
| Jan   | 0.65      | Jul   | 1.12      |
| Feb   | 0.70      | Aug   | 1.08      |
| Mar   | 0.82      | Sep   | 0.98      |
| Apr   | 0.92      | Oct   | 0.85      |
| May   | 1.05      | Nov   | 0.72      |
| Jun   | 1.12      | Dec   | 0.62      |

Applied as: `monthlyRevenue = revenueMo × seasonal[month]`

The P&L and payback calculations use the flat monthly average (`revenueMo`), not the seasonal figure.

---

## 9. Hardware reference

| GPU       | Node CapEx | Power draw | VRAM/GPU | NVLink | GPUs |
|-----------|-----------|------------|----------|--------|------|
| RTX 4090  | €28,000   | 5.0 kW     | 24 GB    | No     | 8    |
| H100 SXM  | €265,000  | 10.2 kW    | 80 GB    | Yes    | 8    |
| H200 SXM  | €370,000  | 10.5 kW    | 141 GB   | Yes    | 8    |

CapEx includes GPUs, server chassis, NVLink fabric, networking, and installation.

---

## 10. CapEx input ranges and defaults

| Parameter | Default | Range | Source |
|-----------|---------|-------|--------|
| Solar PV installed cost | €900/kWp | €500–€1,500/kWp | Cyprus commercial PV market |
| BESS installed cost | €200/kWh | €100–€400/kWh | Ember $125/kWh utility-scale (Oct 2025); C&I €180–300/kWh |
| Curtailment rate | 47% | 10–70% | CyprusGrid 2025 full-year average |
| Peak sun hours | 6.5 hrs/day | 4–8 hrs/day | Cyprus average; varies by season and location |
| BESS round-trip efficiency | 92% | 80–97% | LFP lithium chemistry typical range |
| Grid export rate | €0.09/kWh | €0.03–€0.20/kWh | Cyprus net billing wholesale estimate (CERA, Jan 2026) |
| Platform markup | 40% | 10–100% | Managed service premium over DePIN floor |
| DePIN utilisation | 65% | 20–90% | Akash network averaged 50–57% in 2025 |
| DePIN network cut | 10% | fixed | Typical DePIN marketplace routing fee |
| BESS O&M | 0.5%/yr | fixed | Industry standard for LFP stationary storage |
| GPU O&M | 1.5%/yr | fixed | Standard IT hardware maintenance estimate |

---

## 11. Key assumptions and caveats

- **Hours per month** fixed at 30 days × 24 hours = 720 hours. Actual months vary.
- **BESS cycling** assumes one full charge/discharge cycle per day. Degradation not modelled — LFP batteries typically retain >80% capacity after 3,000–4,000 cycles (~8–11 years at 1 cycle/day).
- **Solar + compute simultaneity**: The model assumes the BESS is the intermediary — solar charges BESS during curtailment periods, BESS powers the GPU node continuously. Direct solar-to-compute during daytime is not separately modelled but would improve economics.
- **Token rewards** (AKT from Akash, IO from io.net) are not included in revenue. They are real but volatile and should be treated as upside only.
- **Seasonal curtailment variation**: Curtailment is highest in spring/summer (peak solar, low demand). The model uses an annual average. Actual BESS sizing should account for peak curtailment periods.
- **Grid export rate** is an estimate. Under Cyprus net billing from Jan 2026, the exact wholesale rate is market-determined and will vary. The €0.09/kWh default is a conservative estimate based on typical Mediterranean wholesale rates.
- **IRR calculation** is a simplified 3-year approximation, not a full DCF model. It does not account for time value of money, terminal value, or tax.
- **No debt financing modelled** — all CapEx assumed to be equity. Adding debt would improve equity IRR but add interest costs.
- **EuroAsia Interconnector** (Cyprus–Greece subsea cable) is expected 2029–2030 and will reduce curtailment. The model does not account for this structural change.

---

## 12. Sensitivity summary

| Input | Direction | Effect on monthly net profit |
|-------|-----------|------------------------------|
| ↑ curtailment rate | +1pp | Moderate positive (more capturable energy) |
| ↑ BESS capacity | +10 kWh | Positive up to BESS = curtailedDay × nodeKw (then flat) |
| ↑ solar PV size | +10 kWp | Positive proportional to curtailment rate |
| ↑ platform markup | +10pp | Large positive, linear |
| ↑ DePIN utilisation | +10pp | Large positive, linear |
| ↑ grid export rate | +€0.01/kWh | Small positive (reduces arbitrage but increases baseline) |
| ↑ GPU power draw | higher kW | Positive (more revenue) but requires more BESS |
| ↑ BESS cost | +€10/kWh | Small negative (increases CapEx, extends payback) |
| ↑ BESS efficiency | +1pp | Small positive (more usable energy) |

---

## 13. Data sources

| Data point | Source | Date |
|------------|--------|------|
| Cyprus curtailment 47% (306 GWh) | CyprusGrid / pv-magazine | January 2026 |
| Cyprus curtailment 58% (Jan–May) | CyprusGrid / pv-magazine | June 2025 |
| Net billing replacing net metering | CERA / pv-magazine | October 2025 |
| BESS $125/kWh utility-scale (ex-US/China) | Ember Energy | October 2025 |
| BESS $280–$580/kWh C&I installed | GSL Energy / SRNE Solar | 2025–2026 |
| Akash H100 median $1.14/hr | Akave/Akash Network blog | January 2026 |
| Akash H200 average $2.82/hr | Akave/Akash Network blog | January 2026 |
| Vast.ai H100 SXM median $1.62/hr | Vast.ai live marketplace | April 2026 |
| Vast.ai H200 median $2.48/hr | Vast.ai live marketplace | April 2026 |
| IntuitionLabs H100 cloud comparison | IntuitionLabs | April 3, 2026 |
| Cyprus solar 340+ sunny days/yr | Lighthief.cy | 2025 |
| EuroAsia Interconnector timeline 2029–2030 | Lighthief.cy / CERA | 2025 |