Salesforce has contracted for 40 megawatts of wind power from a West Virginia wind farm, becoming the latest cloud giant to enter into a utility-scale renewable-energy purchase agreement for its data centers.
The purchase covers more capacity than all of the cloud-based business software giant’s servers consume in data centers that host them. Unlike other cloud giants, Salesforce doesn’t own and operate its data centers, leasing capacity from commercial data center providers instead.
While companies like Google, Facebook, and Microsoft, which own and operate a lot of their data center capacity have been signing larger renewable energy purchase agreements and more frequently, there’s been an uptick in renewable energy investment by data center providers this year. This uptick indicates there’s now more interest from major data center customers, such as Salesforce, in carbon-neutral colocation.
Equinix, the world’s largest retail colocation provider, made renewable energy purchases first for its California data centers in September and later for the rest of its sites in North America. Its major competitor, Digital Realty Trust, started offering customers the option of premium-free renewable energy anywhere in the world for one year in January. Las Vegas-based Switch has invested in a 100 MW solar farm near Reno, Nevada, where it is building a massive data center campus.
The wind farm that will generate energy for Salesforce is expected to produce 125,000 MWh a year – more than all Salesforce data centers combined used in fiscal 2015.
The wind power will not go directly to Salesforce data centers, but the wind farm, due to come online late next year, is on the same power grid as the bulk of the company’s data center load, Salesforce director of sustainability Patrick Flynn wrote in a blog post announcing the agreement.
Flynn didn’t say where those data centers were, but as we reported earlier, the company has data centers in Northern Virginia and Chicago. Both of those regions and West Virginia, where the wind farm is being built, are served by the electrical transmission system operated by PJM Interconnection.
Salesforce made a commitment to powering all of its operations with renewable energy in 2013. As part of the commitment, the company promised to favor data center sites with access to renewable energy as a matter of policy and encourage utilities that serve its data centers to increase supply of renewables in their generation mix.
“This is our biggest step yet toward powering 100 percent of our global operations with renewable energy,” Flynn wrote about the recent wind power deal.
The agreement is what is often referred to as a “virtual power purchase agreement.” Such agreements offer a way around the many roadblocks on the way to procuring large amounts of renewable power.
Not all states allow wholesale power purchases by non-utilities, and not all utilities sell renewable power as an end-user product. Power purchase agreements like the one Salesforce has entered into decouple location of the generation plant from the place of consumption.
Salesforce will pay the developer of the wind farm – whom it did not name – a fixed rate in return for renewable energy credits, which it will then apply to regular grid energy consumed by its data centers. The developer will sell the energy they generate on the wholesale market and either pay Salesforce if the wholesale price is higher than the fixed rate or collect the difference from the cloud company if the sale price is lower.