The historically coal-heavy utility has faced pressure from tech companies to offer more renewable energy in the mid-Atlantic region’s “Data Center Alley.”
Facebook and Dominion Energy this week announced a partnership on six solar projects in North Carolina and Virginia adding up to 350 megawatts.
The Virginia-based utility developed one of the projects, totaling 20 megawatts, and will purchase the others from Strata Solar, BayWa r.e. Solar Projects and EDF Renewables. Facebook signed virtual power-purchase agreements for the capacity, which will go to powering data centers and facilities in Virginia and North Carolina.
Facebook has committed to 100 percent renewable energy by the end of 2020 and the company told Greentech Media it achieved 51 percent renewable energy for its operations at the end of 2017. The company also said it “work[s] to ensure that all of the renewable energy projects we contract for are on the same electrical grid as our data centers.” Dominion plans to have 3 gigawatts of wind and solar complete or under development by 2022.
It’s not the first solar deal for Dominion and Facebook, which are already working together on two projects totaling 240 megawatts in Surry County, Virginia. Those will also provide electricity to a Virginia data center.
Corporate sustainability goals have increasingly pushed utilities to meet demand for more renewables. Facebook, for instance, is a member of the Renewable Energy Buyers Alliance, a group of corporations working to bring more than 60 gigawatts of renewable energy online by 2025.
That pressure may particularly impact Dominion, a conventionally coal-heavy utility with a service territory that overlaps with a part of Virginia where tech giants have flocked for the cheap electricity available to run internet operations in “Data Center Alley.”
Last September, companies including eBay, Adobe and Salesforce submitted a letter to Virginia’s State Corporation Commission arguing that Dominion’s 2018 integrated resource plan “under-deploys renewable energy resources, which is inconsistent with the needs and preferences of the sector that constitutes the largest source of load growth for the utility.” The signatories noted that Virginia accounts for as much as 70 percent of global internet traffic and their operations are the largest source of Dominion’s load growth.
“We therefore encourage the Commission and Dominion to take data center companies’ and customers’ renewable energy preferences and energy efficiency investments into account when deciding on future energy infrastructure projects,” the companies wrote.
The commission later rejected the integrated resource plan and asked Dominion to rework it. Last May, state regulators also rejected a proposal from the utility for a 100 percent renewables tariff that renewables advocates said threatened competition.
Daisy Pridgen, a Dominion spokesperson, said the Facebook deal demonstrates Dominion’s commitment to helping its customers reach their renewables goals.
“Large corporations and institutions, like…Facebook, Amazon, Microsoft and big corporations, but also small businesses in Virginia, they increasingly are focusing on procuring more of their energy needs from renewable resources,” said Pridgen. “In response to that, Dominion Energy works with them; we…customize solutions for them, we develop special programs and work with state regulators to develop these special tariffs to help them reduce their carbon footprint.”
“We do everything we can to help them meet their needs,” Pridgen added.
According to Dominion, the recently announced projects with Facebook are called “a ring fence facility, meaning they are dedicated to one customer.” That customer receives the renewable energy credits associated with the project, and the build does not impact customer rates.
In the past, Dominion has developed a rate specifically for Facebook, called a Schedule RF tariff. That structure, applied to the two projects in Surry County, requires that a customer bring new electric load to the area and agrees to buy the renewable energy credits from the project. Because it impacts customer rates, the Virginia State Corporation Commission had to approve the Surry County projects.
The commission approved the projects in January, but will require Dominion to make up the costs if Facebook’s REC purchases don’t fully cover the expenses borne by ratepayers.
Three of the newly announced projects have already been completed and the Virginian-Pilot reports one of the Surry projects should be online in December.