Microsoft does power deal with Texas wind farm

November 6, 2013 by  
Filed under Green Energy News

SAN ANTONIO — In an effort to burnish its green-company credentials, Microsoft will be the sole customer for a massive new wind power farm in North Texas, the software giant announced Monday.

Under terms of the deal, the company based in Washington state will purchase all of the power from RES Americas’ 110-megawatt Keechi Wind project, located about 70 miles northwest of Fort Worth, for 20 years.

However, the wind-generated electricity will not be used to directly power the company’s massive San Antonio data center, which receives its electricity from city-owned CPS Energy. Because the electric market in San Antonio was not deregulated, only CPS can provide the electricity.

“They have to buy their energy from us within our certificated area because we’re not opted into competition,” CPS spokeswoman Lisa Lewis said

She said Microsoft is a significant participant in the utility’s “demand response” program, which means the company has to cut its energy use at its Westover Hills facility when CPS asks for conservation.

“The purchase from the Keechi Wind project is a wholesale transaction, which is separate and distinct from Microsoft’s retail arrangement with CPS,” a Microsoft spokesman confirmed early Tuesday. “Microsoft will continue to be a retail customer of CPS.”

Construction on the wind project is expected to begin in early 2014.

“We’re definitely looking at this as a first of (its) kind, but it fits into our overall desire to have more control over our energy supply,” said Brian Janous, Microsoft’s director of energy strategy.

Microsoft declined to say how much it is paying for power under the 20-year contract. But Robert Bernard, the company’s chief environmental strategist, said it is coming out of carbon fee funds — an internal tax of sorts that the company has been charging its departments for every ton of carbon produced.

Microsoft previously estimated fee revenue would amount to about $10 million in the program’s first year, which ended June 30. The fees will fund several projects, the company said.

A detailed infographic released by Microsoft said the wind farm sits on the same power grid as its data center in San Antonio.

“By supporting a green grid in Texas, Microsoft is making a direct investment in renewable energy cloud computing,” it states. “The investment meets the principle of additionality by bringing new renewable energy on to the Texas electric grid.”

The idea is for Microsoft’s data center in San Antonio to pay for at least some wind energy, Janous said, adding: “How do we make sure there is power on the grid that we want to use?”

Texas is the nation’s largest producer of wind energy, but most of that power is created on the wide open, windy prairies of West Texas.

The Keechi project, though, is planned for a more densely populated area, said Shalini Ramanathan, vice president of development for RES in Austin.

“Because it’s close to Dallas-Fort Worth, it’s close to the lode of Dallas-Fort Worth and so the price is very attractive,” Ramanathan said.

Microsoft looked at several other states and projects, but chose Texas in part because of a $6.8 billion transmission line project that brings West Texas-generated wind to more power-hungry parts of the state, Janous said.

Keechi will not be connected to those 3,500 miles of high-voltage lines, Ramanathan said, but will benefit because the lines help prevent congestion on the grid.

“As you can imagine, when you have that much concentration of data, it requires a lot of energy to keep those things running … and those are the challenges of companies like Microsoft, Google,” Janous said. “If we’re going to be a consumer of energy, first let’s reduce as much as we can, and then buy it.”

Update: This report was updated with a comment provided from Microsoft regarding CPS provided after the paper went to press.

The Associated Press contributed to this report.

Twitter: @ndhapple

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