Dominion Creates Clean-Energy Tariff for Facebook Data Center in Virginia

At least some portion of electricity consumed by the future Facebook data center in Richmond, Virginia, will be offset by solar energy generated by plants the utility that serves the area is planning to build in the Commonwealth. Facebook will be buying the energy under a new renewable-energy tariff the social media company worked with the utility, Dominion Energy Virginia, to create.

While hyper-scale data center operators like Facebook, Alphabet, and Microsoft may be keen to power their massive computing facilities with renewable energy, it’s not a product that’s readily available from all energy providers in the US. Because matching energy supply with demand while ensuring their rates comply with regulations is a difficult balance utilities have to maintain, many of them have been resistant to adding a new product like renewable energy, which adds an extra layer of complexity in rate-setting to ensure extra costs a utility incurs doesn’t affect all its customers’ rates.

This is why Google (now a subsidiary of Alphabet) spent years lobbying Duke Energy in North Carolina to adopt its renewable-energy tariff concept, where the utility sells renewable energy to customers that want it, while fully passing any additional costs to those specific customers. In 2015, Google became the first customer of Duke’s renewable-energy tariff.

Related:How Renewable Energy is Changing the Data Center Market

Now, Facebook appears to have successfully lobbied Dominion to add a renewable-energy tariff to its product portfolio, which may have much wider implications for the data center industry than Google’s deal in North Carolina. About 130 miles north of Richmond, in Northern Virginia, is one of the largest and most active data center markets in the world. The largest data center operators there, including Amazon Web Services, Equinix, and Digital Realty Trust, have all pledged to power their infrastructure with 100 percent renewable energy, which means there are lots of potential future customers for Dominion’s new tariff besides Facebook.

First, however, state regulators have to approve the tariff, called Schedule RF. Dominion said it plans to file for approval with the Virginia State Corporation Commission this month. An approval, which is enjoying some strong political tailwind, is likely. Announcement of Facebook’s data center plans that came out of Virginia Governor Terry McAuliffe’s office highlights the project’s solar-energy aspect; Representative Donald McEachin and Senator Mark Warner also made statements praising Facebook’s renewable-energy plans for the future facility.

One of the proposed tariff’s requirements is that new renewable-energy generation plants built to support it are located in Virginia. However, like in most other such cases, the solar farms Dominion is planning to construct will not be supplying energy directly to the Facebook data center. They will offset the facility’s consumption of energy from the local electrical grid.

It’s unclear what portion of the data center’s total energy consumption will come from these solar farms. Companies typically use a combination of renewable energy credits and in some cases on-site generation to get to 100-percent renewable goals for hyper-scale data centers.

Facebook’s data center campus in Richmond is expected to take up nearly 1 million square feet. The company plans to invest $750 million in the project directly.