Georgia’s Walton Electric Membership Corporation revealed contract details this week for three solar projects that will supply a Facebook data center in the state. Silicon Ranch — where Shell holds a majority stake — will supply 102.5 megawatts and Strata Solar will build the other 100 megawatts, adding up to 202.5 megawatts in total capacity.
The deal is unique for several reasons. Though the Walton Electric Membership Corporation (EMC) projects rank third-largest among renewables projects from a U.S. co-op, the projects are the largest from a distribution co-op. The partnership is also the largest of its kind with a corporate partner.
“It is unusual because of its size, but we’re seeing more and more projects like this with our co-ops,” said Tracy Warren, a spokesperson for the National Rural Electric Cooperative Association (NRECA). “We’re seeing a lot of innovation in terms of how these programs get structured. But the cooperatives, because they are member-owned, are working collaboratively with their large C&I members to help meet their corporate sustainability goals.”
So far in 2018, co-ops have transacted for more than nine times the amount of solar energy they did in 2013, according to NRECA. The average co-op solar project has also grown to over 1 megawatt, from 25 kilowatts five years ago.
Colin Smith, a senior solar analyst at Wood Mackenzie Power & Renewables, said the “nontraditional” Facebook deal confirms the potential of a trend he expects to grow, with co-ops acting as an intermediary for large commercial and industrial offtakers.
“Cooperatives are nonprofits, so they don’t stand to gain anything monetarily. They tend to be very conscious of their consumers and their customers because they’re cooperative. The customers are their ruling party — it’s a mini-democracy,” said Smith. “From that standpoint, it’s a very interesting move that we see Facebook working with a cooperative rather than the dominant investor-owned utility in this territory.”
That dominant IOU is Georgia Power. Smith said securing the deal would likely have been lucrative for the utility, but Facebook made a “very conscious decision” to choose a co-op. Georgia Power has worked with companies including Google and Target on renewable energy credits.
In Georgia, co-ops, IOUs and municipal utilities jointly own the transmission system. Greg Brooks, a Walton EMC spokesperson, said that means Georgia Power has no involvement in the project.
According to Brooks, Facebook appreciated that the co-op was nonprofit, customer-owned and community-oriented.
“We’ve always been able to serve C&I customers and provide the services they need,” he said. “Facebook, being an innovator and progressive, they recognize that.”
Melanie Roe, a spokesperson at Facebook, said the tech company liked that Walton EMC is an important part of the community where the data center is located.
“We are committed to the communities that host us, and part of that is working to bring additional investment to these communities, including new renewable energy resources,” Roe said in an email.
Walton EMC has about 130,000 customer accounts. About 93 percent are residential, while the remaining 7 percent are commercial customers.
The 202.5 megawatts' worth of projects, though Walton EMC will not actually own or operate them, will add significant solar resources to the utility’s portfolio. Walton EMC currently has about 6.5 megawatts of solar on its system, which goes to residential customers. In the future, Brooks said the co-op plans to add as much as its wholesale power provider, Morgan Stanley, allows.
According to Walton EMC, the solar projects will be a boon to the area’s economy. Notably, corporates are starting to locate projects closer to demand. That could mean more renewables in the Southeast, where cheap power has been a draw for data centers.
Roe at Facebook said the company strives “to make sure these projects are on the same electric grid as the data centers they serve.” Roe pointed to a map that shows the local renewables projects supporting Facebook's data centers around the country. The company is also working with the Tennessee Valley Authority to power a data center in Alabama with renewables.
TVA has also worked with Google for data centers in Alabama and Tennessee that will run on renewable power. In September, five tech companies including Salesforce and eBay pushed back against Dominion Energy’s proposal to build more natural gas in Virginia because companies there increasingly want to power data centers with renewable energy.
“These sustainability goals are often a part of a corporation’s decision on where it might relocate, or where it would locate a new facility,” said NRECA's Warren.
Smith said the draw of co-ops may also push more and more corporate renewables projects into smaller communities.
“This might be a model that would really attract big corporations out into what are typically underserved communities that were not necessarily as advantageous for IOUs to build into,” said Smith. “A lot of the time, the reason why cooperatives and municipal utilities exist is because it’s in a region that otherwise wouldn’t be served power. It’s not financially beneficial for IOUs to run lines out to a relatively small load.”
Warren said co-ops building out more solar is a result of demand from consumer members. The trend has also been helped along by the decline in solar costs.
She pointed to other examples such as Minnesota, where McLeod Cooperative Power and Great River Energy supply packaging company Tetra Pak with renewable energy credits, and Arkansas, where a 12-megawatt project contracted through Ouachita Electric Cooperative serves defense contractor Aerojet Rocketdyne. Silicon Ranch developed the Arkansas project as well, and it’s created 225 new jobs in the state.
“We’re seeing more and more of that,” she said. “Certainly our generation and transmission cooperatives want to be cooperative to the needs of any large commercial members.”
See how you can save with #Solar Energy http://ow.ly/Xnkg302gEfq