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Data center giant Equinix sources clean power to cover California

A new contract with SunEdison represents the company's first utility-scale project.

Equinix, a $2.5 billion technology powerhouse that operates more than 100 data centers on five continents, is offering a special enticement to companies that use its California locations to run their servers and other mission-critical technology infrastructure.

It just signed an unprecedented solar purchasing contract with developer SunEdison that will offset its entire annual power consumption, which amounts to about 300 megawatt hours per year.

Put another way, with this deal, the company will be buying enough renewable energy to offset about 43 percent of what it uses globally. Its long-term goal is 100 percent, although it hasn’t publicly declared a timeframe.

“You can’t solve the renewable puzzle with onsite generation alone,” said David Rinard, senior director of global sustainability and procurement for Equinix, headquartered in Redwood City, California. “We’re exploring our options around the world.” 

We were trying to fit a round peg in a square hole.

While Equinix isn’t exactly a household name, the operator boasts more than 6,250 customers ranging from cloud service providers to financial services firms to all five of the “top five Web properties.” (According to the 2015 of the comScore list that Equinix references in its corporate fact sheet, that includes digital media properties like Google,  Yahoo, Facebook, AOL, and Microsoft.)

The Equinix contract with SunEdison actually seems unusually short for a power purchase agreement, just four years. That’s because it’s meant to act as a bridge: allowing Equinix to identify long-term options, and helping SunEdison get the new solar plant online more quickly than what otherwise might have been possible.

The arrangement involves the 150-megawatt-capacity Mount Signal Solar II project, located in San Diego Gas & Electric’s generation territory in Calexico, California. Essentially, the Equinix deal will kickstart construction in early 2016, with commercial generation scheduled to begin late next year. Equinix will buy about 105 megawatts of the production until 2020. The project will reduce its carbon dioxide emissions by about 189 million pounds, Rinard said.

Until the plant is operational, Equinix will buy Green-e renewable energy credits to offset its California electricity consumption.

While this is the company’s first utility-scale deal, Equinix is experimenting with multiple options to boost its renewable energy portfolio. Last May, for example, it disclosed plans to install a 1-megawatt biogas-powered fuel cell from Bloom Energy in Silicon Valley.

You can’t solve the renewable puzzle with onsite generation alone.

This solar deal was complex to negotiate, primarily because the suppliers and developers “weren’t used to dealing at the retail level,” Rinard said. “We were trying to fit a round peg in a square hole.”

His team will use its experiences over the next four years to inform future contracts. Given that Equinix’s power load will increase every year in lockstep with its revenue growth, the company is perpetually reviewing and rethinking its energy procurement strategy.

“We are still learning and figuring out the risks,” Rinard said.

In conjunction with disclosing the new SunEdison relationship, Equinix has signed onto the Corporate Renewable Energy Buyers’ Principles. As of late May, close to three dozen large companies embraced the philosophy expressed in this manifesto, which advocates changes to corporate power procurement practices that are meant to encourage additional investments in clean power.

Data centers are particularly power-hungry, which is why high-profile technology companies such as Amazon, Apple, eBay, Facebook, Google and Yahoo are experimenting with energy efficiency and renewable energy alternatives. Here are 12 facilities worth of emulation.

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