After reading a pretty scant report this morning on Salon, I waited for what I knew would be a more thourough job from Datacenter Dynamics regarding Microsoft's power purchase moves in Texas.
Microsoft has entered into a power purchase agreement with a new wind farm that has 110 MW of capacity. But as noted in the report, it's not a pure-play direct access deal.
Microsoft buys the power, strips off the renewable energy credits (RECs) for use across it's facility portfolio (not just their Texas data center), then evidently sells the power back into the wholesale market.
That's really not much different than simply buying the RECs directly from the wind farm project, so it doesn't get them into the kind of deal that Google often makes, which is to buy the power outright and wheel it to their facilities. (That direct investment avoids the question of whether the project would have been built anyway.)
I was under the impression that Texas was pretty wide open when it came to utility deregulation, but I'm inferring that while you can opt to purchase your power from any number of providers, perhaps you can't make a deal directly with a generator. (Remeber that the local utility still gates paid for distribution, and the transmission system gets paid too.)
So I guess I see my esteemed colleague KC Mares' point that Texas still has a somewhat closed system, though I would never advocate what he does without two crucial caveats.
If you want full deregulation, you have to put in place rules about the obligation of utilities to serve customers. If the wind farm Microsoft is buying power from goes bust, what obligation does a utility have, if any, to secure generation resources to make up for that loss?
And perhaps more importantly, in a fully deregulated market, who is responsible for ensuring that enough generation capacity is developed? In California, which of course had a disastrous flirtation with deregulation (largely at the hands of certain Texans!), the utilities have had to get back into the generation development game because the "free market" can't raise capital in a fairly regulated market (let alone a fully deregulated one).
So I will certainly add Microsoft to my very short list of data center operators that are tackling the environmental impacts of their energy use, though the REC purchase approach is probably the least effective of the ways to address the issue.
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