Green tariff renewable energy purchases

Until recently, power purchase agreements (PPAs) and unbundled renewable energy certificates (RECs) were the primary means for data center operators or managers to procure renewable electricity and RECs for their operations. Many companies are not comfortable with the eight-to-20-year length and financial risks of a PPA. Unbundled RECs are an ongoing expense and do not necessarily help to increase the amount of renewable power generated.

As the supply of renewably generated electricity has grown across markets, utilities and energy retailers are offering sophisticated retail renewable energy supply contracts, referred to as green tariff contracts, which physically deliver firm (24/7 reliable) renewable power to data center facilities. The retailer creates a firm power product by combining renewable power, brown power (fossil fuel, natural gas and nuclear) and RECs from a defined set of generation projects within the grid region serving the facility.