Project Kati Successfully Exits ERCOT Planning Phase

Rhea-AI Summary

Soluna Holdings (NASDAQ: SLNH) has successfully completed the ERCOT planning phase for Project Kati, a significant milestone in developing a green data center for Bitcoin mining and AI applications. The project will deliver up to 166 MW of renewable energy capacity in two phases.

The company is finalizing land negotiations to accommodate both phases and future AI opportunities. Project Kati's next steps include capital formation activities, exploring AI joint venture opportunities, and conducting HPC site analysis. Construction is planned to begin in 2025, with the first phase delivering 83 MW. Upon completion of this phase, Soluna would manage over 206 MW for Bitcoin Mining and Hosting.

The project, named after scientist Katalin 'Kati' Karikó, aims to expand renewable computing infrastructure for innovative computing applications while providing 'white glove' service through their Relentless Stewardship approach.

Positive

• Successfully completed ERCOT planning phase, clearing path for construction
• Project will deliver 166 MW of renewable energy capacity
• First phase of 83 MW will bring total capacity under management to 206 MW
• Multiple revenue streams through Bitcoin mining, hosting, and potential AI joint ventures

Negative

• Construction not yet started and subject to securing land acquisition
• Project completion dependent on successful capital formation
• Timeline extends to 2025 for construction start

Insights

Energy Infrastructure & Data Center Analyst

The successful completion of ERCOT's planning phase for Project Kati represents a significant de-risking event for Soluna Holdings' expansion strategy. The 166 MW facility, to be developed in two phases, positions the company at the intersection of three rapidly growing markets: renewable energy, cryptocurrency mining, and AI computing infrastructure.

The timing of this development is particularly strategic. Texas's power grid has undergone significant reinforcement following the 2021 winter storm crisis, making ERCOT approvals more stringent but also more valuable. The phased approach (83 MW + 83 MW) demonstrates prudent risk management, allowing for capital efficiency and operational optimization between phases.

The project's dual-use capability for both Bitcoin mining and AI applications represents a sophisticated hedge against crypto market volatility. While Bitcoin mining provides immediate revenue potential, the AI infrastructure component offers higher-margin opportunities in the rapidly growing high-performance computing sector. The company's engagement of AI data center development advisors for Tier-3 specifications suggests a serious commitment to capturing this market.

The capital formation strategy, opening the project to investor bids, indicates a flexible approach to financing that could minimize dilution for existing shareholders. The emphasis on joint venture opportunities for the AI portion could provide both technical expertise and risk-sharing benefits, particularly valuable given the specialized requirements of AI infrastructure.

Looking at the broader market context, Project Kati's location in Texas leverages three key advantages:

• Access to abundant renewable energy resources
• A business-friendly regulatory environment
• Proximity to major technology corridors

The expansion to 206 MW under management post-Phase 1 would represent a significant scale advantage in the green data center space, potentially enabling more competitive pricing for hosting services while maintaining margins through operational efficiencies.

Expected to unlock up to 166 MW of new Bitcoin Hosting and AI Joint Venture Opportunities

ALBANY, N.Y.--(BUSINESS WIRE)-- Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), a developer of green data centers for intensive computing applications including Bitcoin mining and AI, has successfully exited the Electric Reliability Council of Texas (ERCOT) planning phase for its Project Kati. This marks a critical step forward in the project’s development, clearing the path for construction and further expansion.

Project Kati Successfully Exits ERCOT Planning Phase (Photo Business Wire)

Project Kati will deliver up to 166 MW of renewable energy capacity in two phases, and is expected to unlock new hosting and joint venture opportunities. This project is set to power advanced computing applications, including Bitcoin mining and artificial intelligence (AI).

“The successful exit from the ERCOT planning phase is a major achievement for Project Kati and a testament to the hard work and dedication of our team,” said John Belizaire, CEO of Soluna Holdings. “This milestone brings another project closer to shovel readiness helping to realize our vision of expanding renewable computing infrastructure for the world’s most innovative computing applications.”

With the ERCOT planning phase complete, Project Kati will now focus on:

• Land Negotiations – The Company is in the final stages of land-related activities for the site. The goal is to acquire enough land for both of the project's phases and future AI opportunities.
• Capital Formation Activities – The Company will open up the project to bids from potential investors.
• AI Joint Venture Opportunities – The Company is also in talks with potential joint venture partners to develop an AI data center at the project.
• HPC Site Analysis – The Company has hired AI data center development advisors to study the site for key requirements for high performance, Tier-3 data centers. This includes land, energy, environment, connectivity, and more.

The Company intends to start construction of Project Kati in 2025. Following completion of the first 83 MW phase, the Company would have over 206 MW under management for Bitcoin Mining and Hosting.

“Our Hyperscale Miner customers continue to seek out our renewable energy-powered data centers to meet their growing hosting needs,” continued John Belizaire. “It’s a testament to our ‘white glove’ service we call Relentless Stewardship.”

Soluna continues its tradition of naming its data centers after women scientists who help catalyze major innovation. Project Kati is named after Katalin “Kati” Karikó, a Hungarian scientist who was instrumental in the development of mRNA-based protein therapies. Her decades of dedicated work significantly contributed to the development of modern mRNA vaccines.

For more information on Soluna and its projects, please visit solunacomputing.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include all statements, other than statements of historical fact, regarding our current views and assumptions with respect to future events regarding our business, our expectations with respect to the completion of Project Kati, including our ability to acquire enough land for the project, our ability to enter into joint ventures, our ability to obtain investors to fund the project, our ability to complete the first phase of the project and our ability to complete the project on the projected timeline or at all, and other statements that are predictive in nature. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Readers are cautioned that any forward-looking information provided by us or on our behalf is not a guarantee of future performance. Actual results may differ materially from those contained in these forward-looking statements as a result of various factors disclosed in our filings with the SEC, including the “Risk Factors” section of our Annual Report on Form 10-K filed with the SEC on April 1, 2024. All forward-looking statements speak only as of the date on which they are made, and we undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except to the extent required by law.

About Soluna Holdings, Inc (SLNH)

Soluna is on a mission to make renewable energy a global superpower using computing as a catalyst. The company designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources. Soluna’s pioneering data centers are strategically co-located with wind, solar, or hydroelectric power plants to support high-performance computing applications including Bitcoin Mining, Generative AI, and other compute-intensive applications. Soluna’s proprietary software MaestroOS(™) helps energize a greener grid while delivering cost-effective and sustainable computing solutions, and superior returns. To learn more visit solunacomputing.com. Follow us on X (formerly Twitter) at @SolunaHoldings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250218889162/en/

Sam Sova

Partner and CEO

SOVA

Sam@letsgosova.com

Source: Soluna Holdings, Inc.

FAQ

What is the total power capacity planned for SLNH's Project Kati?

Project Kati is planned to deliver up to 166 MW of renewable energy capacity in two phases.

When will Soluna Holdings (SLNH) begin construction of Project Kati?

The Company intends to start construction of Project Kati in 2025.

How much power will SLNH manage after completing Project Kati's first phase?

Following completion of the first 83 MW phase, Soluna would have over 206 MW under management for Bitcoin Mining and Hosting.

What are the main development stages for SLNH's Project Kati?

The main stages include land negotiations, capital formation activities, AI joint venture opportunities exploration, and HPC site analysis.

What will SLNH's Project Kati be used for?

Project Kati will power advanced computing applications, including Bitcoin mining and artificial intelligence (AI).