The need to consume ever-increasing amounts of energy in their data centers -- yet continue marching towards renewable energy goals -- has been an ongoing challenge for Google and Apple.
Google has offset electricity needed for its centers through purchase power agreements that enable an equal amount of renewable energy to be created, yet has lamented that managing power sales and purchases on the wholesale market takes time away from its focus on building user products.
And despite Apple's onsite generation of renewable energy, it has still had to supplement its need for renewables through buying off the grid and purchasing renewable energy certificates to offset the conventional portion, green IT experts say.
It’s a conundrum that has kept the Silicon Valley tech giants within the constraints of local utilities’ energy mix in states that don't permit direct purchases of renewable energy.
Nowhere has this challenge been more evident than in North Carolina, an indirect access state that houses data centers for Google, Apple and Facebook as well as AT&T, Wipro and Disney. Compounding matters further is proposed legislation that would repeal the state's renewable portfolio standard mandating that 12.5 percent of North Carolina's energy mix come from renewable sources by 2021.
But things are looking up. Now, Google is trying to transform the local landscape in North Carolina by partnering with Duke Energy. The pair worked together to develop a mechanism which will enable companies of all sizes to directly purchase renewables through a new category dubbed "renewable energy tariffs."
"The tariffs are creating a new class of service," said Michael Terrell, who leads Google’s public policy efforts in energy and sustainability. "We think it will be a good framework for purchasing renewable energy," he told GreenBiz.
Before the program can be launched, though, the new class and tariff structure needs to be approved by the North Carolina Utiltiies Commission. Duke Energy will make a regulatory filing asking for its adoption within the next three months.
Under the tariff, renewable energy will be sold at specific rates yet to be determined -- higher than conventional sources, of course, but passed on only to those who choose to participate in the program.
"What we think is exciting is that it’s scaleable – it allows companies to buy large amounts of renewables ... not every company can manage power on the wholesale market," Terrell said.
Terrell said that he hopes the tariff will be in place by the end of the year.
Google's announcement of the renewable energy tariff concept last Friday came on the same day it released plans to expand its Lenoir, N.C. data center with $600 million in investments. The possibility of accessing more renewable energy directly will come in handy for the company striving to reach a commitment it made in 2007 to become carbon neutral.
Nightfall over Google data center photo in Lenoir, N.C. courtesy of Google
Next page: Implications for Apple, Facebook