Shining Sunlight on the Accomack Solar Project

Approximate location of the Amazon Web Services solar generating facility.

Approximate location of the Amazon Web Services solar generating facility on the Eastern Shore.

Amazon’s giant solar power plant will lighten the environmental footprint of the company’s growing cluster of Northern Virginia data centers. It won’t do much to lighten the tax burden of Accomack County.

by James A. Bacon

Amazon Web Services (AWS), the cloud-services business unit of retailing giant Amazon, made big energy news earlier this month when it announced plans to build an 80-megawatt solar generating plant in Accomack County. The nearly 1,000-acre facility will be one of the biggest solar power plants east of the Mississippi, generating enough electricity to power 15,000 homes or, to use a more appropriate unit of comparison, about 200,000 servers.

AWS was tight-lipped about the project, declining to answer questions posed by Bacon’s Rebellion and binding business partners such as Dominion Virginia Power and A&N Electric Coop on the Eastern Shore to non-disclosure agreements. All the company was willing to say in its press announcement, above the sparest details, was that the electricity will be delivered into the electric grid through a Power Purchase Agreement (PPA) to serve “both existing and planned AWS datacenters in the central and eastern US.”

“We continue to make significant progress towards our long-term commitment to power the global AWS infrastructure with 100 percent renewable energy,” said Jerry Hunter, Vice President of Infrastructure at Amazon Web Services. “Amazon Solar Farm US East … has the added benefit of working to increase the availability of renewable energy in the Commonwealth of Virginia.”

Neither the Governor’s Office nor the Virginia Economic Development Partnership issued its own press release — highly unusual in a deal reported by the Richmond Times-Dispatch to be valued at $200 million, surely one of the biggest investments by an out-of-state company in the Old Dominion this year. The deal was shrouded in secrecy. Even the state’s solar energy expert, Ken Jurman with the Department of Mines, Minerals and Energy, was kept out of the deal-making loop. “You probably know as much about it as I do,” he told Bacon’s Rebellion.

Too bad nobody’s talking because there is a fascinating back story here: the rapid rise of Northern Virginia as the leading locus of AWS data centers in the United States. According to a Greenpeace investigation of the Amazon cloud, AWS has publicly admitted to more than 10 data centers in its US East “Availability Zone,” but based on diesel permits for backup generators filed with the Virginia Department of Environmental Quality (DEQ), the total number of AWS data centers operating or under construction in Virginia stood at 23 in May.

Regarding 2014 energy consumption, said Greenpeace, “AWS expanded the capacity of US East by over 200 MW (megawatts), as much as the total amount of capacity in the rest of its U.S Availability Zones combined, bringing the total energy demand capacity of AWS facilities in Northern Virginia to 500 MW.”

AWS is under heavy pressure from environmental organizations to conserve energy or find zero-carbon emission sources for its energy-chugging server farms. If Greenpeace’s estimates are anywhere near accurate, the Accomack facility will supply only a modest fraction of the company’s total power consumption in Northern Virginia. AWS’s commitment to go 100% renewable suggests that the company could be on the prowl for significant additional solar capacity in the Mid-Atlantic region.

Meanwhile, the company is using the caché of the East Coast’s largest solar facility to drive a hard bargain with local government.

Accomack officials are excited about AWS’s decision to locate in the county, whose economic base is primarily farming, agribusiness and tourism. “This puts an Amazon-branded facility in our county,” beams Steven B. Miner, county administrator of Accomack County. But, he adds, “They’ve made it very clear that these [solar] projects are very sensitive to taxation.” Tax concessions are expected from the county.

Big data needs a home

Northern Virginia has the largest cluster of data centers in the world, and Loudoun County the largest percentage — about 80% — of any jurisdiction in Northern Virginia. Buddy Rizer, director of economic development for Loudoun County, says there are “sixty or so” data centers in Loudoun County at the moment. The number is always changing because “there hasn’t been one day in without data center construction in six years.” All the major players have a presence in Loudoun, he says. “Facebook has their largest footprint anywhere in the world here. … Visa has its main credit card processing plant here. You swipe your credit card anywhere in the world, and it’s using our infrastructure here in the county.” So dominant is Loudoun, he says, that 70% of the world’s Internet traffic moves through the county.

The need for data centers will only increase as the economy evolves toward the use of “big data” and the “Internet of Things.” Business enterprises are collecting more data than ever before, and they need to house it somewhere. Increasingly, companies are outsourcing the ownership and management of servers to “the cloud,” where companies like Amazon Web Services, Google, IBM, Microsoft and other companies can use economies of scale to store the data at less cost than most companies can themselves.

Why are so many data centers clustering in Northern Virginia? Rizer provides several reasons. One is access to high-capacity fiber-optic cable — Northern Virginia has one of the densest cable clusters in the world. Another is a regional workforce steeped in the IT skills required by data centers. Yet another is a reliable supply of reasonably priced electricity.

Also, Loudoun County targeted the sector as an economic development priority before any other jurisdiction. As a result, the county has moved further up the data center learning curve. Local government has put into place a special zoning category for data centers and has built a water-reclaiming plant that filters and treats non-potable water used for the chillers and cooling equipment required to dissipate the heat generated by all those servers.

“We have expertise throughout the government. We get data centers done faster than anywhere else in the world,” says Rizer. Companies can get data centers built in Loudoun in 13 months. “Some places in California, you can’t even get your plans reviewed in 13 months!”

The push for green data centers

As data centers proliferate, environmental groups have been paying closer attention. In 2013, writes Pierre Delforge with the National Resources Defense Council (NRDC), U.S. data centers consumed an estimated 91 billion kilowatt-hours of electricity, roughly the annual output of 34 large coal-fired power plants.  Data center electricity consumption was projected to increase to roughly 140 billion kilowatt-hours by 2020, or the equivalent of 50 power plants. For environmentalists, that’s a problem because coal- and gas-fired power plants emit large quantities of carbon dioxide, implicated in global warming.

Not all data centers are created equal. Industry leading data centers, which enjoy economies of scale and embrace best practices, are far more energy efficient than smaller corporate data centers. “The vast majority of data center energy is consumed in small, medium, and large corporate data centers as well as in the multi-tenant data centers to which a growing number of companies outsource their data center needs,” writes Delforge. “These data centers have generally made much less progress than their hyper-scale cloud counterparts.”

The simple act of shifting data storage from in-house to hyper-scale cloud computing can reap tremendous gains in economic and energy efficiency, writes Jeff Barr in the Amazon blog.

For starters, cloud customers require fewer servers to store the same amount of data. On-premises servers usually have low utilization rates — company IT departments have to maintain enough capacity to handle peak demand, plus a reserve, in order to prevent the loss of mission-critical functionality. Typically, server utilization runs less than 20%. When a company switches to the cloud, a pool of customers can balance out each others’ peak demand. Utilization can run around 65%. In other words, Barr contends, an AWS or other state-of-the-art provider can support the same amount of data with one-fourth the number of servers.

Additionally, large-scale cloud providers can better afford to invest in efficiency improvements. Industry leaders report a Power Usage Effectiveness (PUE) rating as low as 1.07, meaning that only 7% of the electricity is lost in distribution, cooling, lighting and other overhead. The industry average is 1.7. The difference between the industry average and state of the art represents more than 30% of data-center electricity consumption.

NRDC is pushing for corporations to achieve greater energy efficiency by adopting common performance metrics, developing “green lease” contract templates and making transparent their energy efficiency performance. “If just half of the technical savings potential for data center efficiency that we identify in this paper were realized,” writes Delforge, “electricity consumption in U.S. data centers could be cut by as much as 40 percent … — equivalent to the annual electricity consumption of nearly all the households in the state of Michigan.”

But that’s not all. Environmentalists are pressuring data centers to embrace green energy sources, in particular solar power. In a 2014 report, Greenpeace ranked AWS as the second least green of 14 major cloud brands. Stated the report:

Amazon Web Services (AWS), which provides the infrastructure for a significant part of the internet, remains among the dirtiest and least transparent companies in the sector, far behind its major competitors, with zero reporting of its energy or environmental footprint to any source or stakeholder.

In November 2014, AWS committed to achieving 100% renewable energy usage for its global infrastructure footprint. In January, the company announced plans for a 150-megawatt wind farm in Benton County, Indiana. In April, it announced a pilot of Tesla’s energy storage batteries in its California operations. And in June, it announced the Accomack County solar plant. The company’s goal is to reach 40% renewable energy by 2016.

Environmentalists are holding the company’s feet to the fire, demanding more transparency. Gary Cook, writing for Greenpeace, which has been benchmarking performance of data center operators since 2010, said in May:

Despite its market leading position among cloud providers, Amazon has long kept Amazon Web Services (AWS) operational details inside the proverbial black box, keeping details of its size and scale hidden even from its own investors until just this past month. While Amazon has finally provided more specific financial details [it remains] among the least transparent companies with regard to its environmental footprint, lagging far behind what Apple, Google, IBM and nearly every other company in our 2015 evaluation provides.

Angling for tax breaks

AWS has been working behind the scenes to bolster its commitment to green energy for some time — even  before it announced its commitment to a 100% goal. In December 2014, only a month after announcing the goal, the company was far enough advanced in its plans to develop the Accomack County site that it submitted its conditional use permit to the county planning commission. That followed a lengthy period in which the company had worked with county officials  to assemble about 44 parcels or parts of parcels to create a 900-acre block of land.

Plans call for developing 440 acres, with 200 acres directly under solar panels. The company promised no noise and no emissions, and said it will cordon off the facility with fencing and landscaping. Construction will create 400 to 600 jobs, although the plant itself will support only four or five full-time jobs, mainly to maintain landscaping around the panels.

One advantage of the Accomack site is that it allowed easy connection to a Delmarva Power transmission line that tied into the PJM Interconnection network of power grids. PJM, a regional transmission organization, operates a wholesale electricity market in the Mid-Atlantic, facilitating the buying and selling of electricity between utility companies and independent producers. Through PJM, Amazon Web Services could, in effect, connect with its servers in Dominion-based territory in Northern Virginia. A&N Electric Coop, the cooperative serving Accomack County, is not involved in the project in any meaningful way.

For all of Accomack’s advantages, AWS stressed that it was “very concerned about the tax consequences,” of the deal, says County Manager Miner. Negotiations between the company and the county focused on how much of a real estate tax break to give the company, and how the company could offset that sum with proffers.

Accomack’s tax rate (outside Chincoteague) is $0.58 per $100 of assessed value. Brent Alderfer, president of Community Energy, AWS’s partner in constructing and operating the facility, described the project as “roughly $200 million” in comments to the Richmond Times-Dispatch. Alderfer did not respond to a Bacon’s Rebellion interview request. That figure, if accurate, implies an upper bound of $1.1 million in tax liabilities to the county. In all likelihood, the liability would be lower because not all of the $200 million will be spent on land, facilities and equipment.

A calculation by county assessor Brent Hurdle placed the total taxable land value at $17.2 million, yielding $99,800 in revenue. That represented a considerable increase from its previous assessment as farmland at $2.6 million generating $15,000 in taxes. Hurdle’s valuation placed no value on the tens of millions of dollars of solar panels.

No final assessment has been determined, however, Miner says. He expects a proposal to be put before the board next month. “We’re confident we can come up with a fair solution.”

While making it clear that he supports the AWS project, Miner contrasted the modest tax benefits of solar with those of a peak-power plant built previously in the county that revved up seven jet turbines during periods of peak demand to sell electricity into the grid. “That gave us a good wallop of revenue.”

In an economic impact analysis, James G. Brierlein, a professor of agriculture and economics at Pennsylvania State University, summarized the economic benefits to the county as follows:

  • $250,000 in up-front proffers. (According to Miner, these include a donation of solar panels for county buildings and funds to clean up abandoned homes and structures throughout the county.)
  • $1.4 million in annual benefits to the county, assuming $100,000 in tax revenues and including $740,000 in annual lease payments to the property owners.
  • $20 million in economic stimulus, counting money spent on construction and the multiplier effect in the local economy.

If Northern Virginia continues to attract new data centers — and Loudoun County’s Buddy Rizer expects the trend to last at least through 2020-2021 — and if environmentalists pressure the data-center giants into greater renewable energy commitments, AWS and its competitors could be on the prowl for more locations for solar facilities in the PJM interconnection grid. The Accomack solar plant could be the first of many in Virginia, and the project could set a precedent for terms of future deals.

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34 responses to “Shining Sunlight on the Accomack Solar Project

  1. I do wonder if there’s a chance here to spread some redevelopment to the mountain areas.

    If folks like Amazon and Google are looking for green data centers and one of the largest power drivers for these centers is heat dissipation wouldn’t it make sense to put them in the mountains, potentially in old mining clusters around – say – Blacksburg, Lynchburg and Roanoke?

    If fiber optic density is the problem just take some of that misused Tobacco money and put it to use laying fiber and enhancing the power grid in the area to make it more reliable.

    Maybe get the eggheads at Tech to run a pilot study to test the feasibility of such a design. Seems like a win-win-win to me.

    • It’s more about power (cost and reliability) and proximity to a switching point than just being on fiber. One of those original peering points was MAE-East located on Gallows Rd in Northern Virginia. However, network interconnection preceded MAE-East. Steven Feldman an Internet architect recalls “A group of network providers in the Virginia area got together over beer one night and decided to connect their networks.” Given the network concentration already occurring in Northern Virginia the NSF realized that one of the original four peering points should be located there. In 1993, the National Science Foundation awarded MFS/MAE-East a grant establishing it as one of the four original NAPs (Network Access Point).

      With a NAP in Northern Virginia internet companies built their network switching operations and, later, datacenters near the peering points. They financed the digging of trenches, laying of cable, etc until it seemed like Loudoun County had more fiber than dirt in the ground.

      Meanwhile, Dominion continued to burn coal and gas and use nuclear to generate cheap electricity.

      So, more datacenters came to NoVa.

      Now, it takes a lot of people to build a datacenter but it sure doesn’t take many to run one after its built. This is something that Loudoun has come to grips with – http://wapo.st/1Jlvf1l.

      So, I am not confident that building data centers in rural Virginia will prove economically attractive. Even if that could be overcome, those data centers would create precious few jobs in the long run. They would, however, increase the tax base unless (of course) the data center companies made big tax breaks part of their location decision (see: Accomack County solar farm).

      • Interesting background about NoVa’s networking capacity, something I know nothing about. It would be interesting to know exactly what makes NoVa’s wired infrastructure special, and how easy or difficult it is to replicate.

        Don’t underestimate the tax benefits of data centers. Buddy Rizer says that data centers generate $70 million in taxes for Loudoun County. That’s serious money, especially when you consider that they place minimal demands on the county for services.

        • The taxes are meaningful and they do place minimal demands on the county – they supply their own security guards and come with their own fire suppression capability!

      • I forgot about the proximity to switching points, which is a validpoint. I think the cost/rreliability of power could be overcome, especially if the companies themselves are willing to invest in their own sources. Worst case scenario, the centers prove unattractive, but the state brings fast, reliable connectivity to a region that could use some competitve advantage in terms of infrastructure.

        • LOFL:

          Those data centers can go for a billion dollars (or more) each. Rural Virginia would have to be pretty bulletproof before the first data center operator moved there. The state would have to not only invest in massive networking improvements but probably massive power upgrades as well.

          However, your point about high bandwidth connectivity is “dead on”. The state should do that anyway.

          Your ideas about effective economic development are right even if attracting data centers is impractical. The right way to create economic development is through education, infrastructure and redevelopment. Running around trying to “incent” companies with tax breaks is futile. Set up a great environment to do business, keep the taxes reasonable all through the state and the companies will come.

          • LifeOnTheFallLine

            It shouldn’t come as a shock, but massive networking and power upgrades would be fine by me. If the state is asking its power companies to move to greener energy, upgrading the grid to encourage that along is not a terrible idea.

        • I think rural works too. When I worked at a big law firm, I negotiated contracts for fiber transport for several large banks to interconnect their main data centers in the HQ city and a backup in a relatively rural area. Banks wanted physical diversity and not just route diversity. A terrorist attack on say Charlotte or the NY financial center won’t put the bank out of commission. It’s too much work to find and damage the backup data center and, in my contracts, there were two physically separate cables connecting the data centers.

          • Different problem. The banks know where they need the network to go. In the case of the rural disaster recovery center they need to network their existing points of operations to the recovery center instead of the main data center. Cloud service providers have no idea who will be in their data centers or where they will want to network. Therefore, proximity to the NAP gets more and more important.

            There is also a certain “gravity” to data centers. For primary operations (as opposed to operations in “recovery mode” which can be somewhat degraded) network latency can be very important. So, if I want to communicate with a business partner’s systems and the partner is in Equinix – Ashburn I might want to be in my preferred cloud center, let’s say AWS – also in Ashburn.

            I suppose the ultimate proof of all this is the clustering of data centers and data center providers around the 4 original NAPs. Nothing has changed. The data centers continue pouring into those four cities despite the fact that three of them are among the highest cost cities in the US.

          • TooManyTaxes

            Don, understand your points. The cloud changes a lot. But clustering data centers for the same provider creates a significant risk. It’s easy to take out everything. Most big telecom companies have network management centers, etc. in at least two separate geographic locations. One gets shut down by a tornado, and the other one should be able to pick up the load.

            I think the same principles should apply to data centers. Any company of significance needs geographic redundancy. We’ll probably see a data center wacked somewhere in the world, with catastrophic loss. Sooner or later, best practices will call for geographic redundancy. My two cents.

  2. I’m not sure I see the connection between AWS’ use of power in Virginia and its need to generate clean power in Virginia. AWS offers three “carbon neutral regions” where “region” is a geographic region which contains AWS “availability zones”. Those regions are:

    US-West
    US-Gov-Cloud
    EU (Frankfort)

    Interestingly, US-Gov-Cloud is located in the Northwestern US.

    Some locations are relatively easy to make green. If the datacenter is powered by an electricity company that uses hydro to make electricity, the datacenter is green.

    The datacenters in Northern Virginia are part of AWS’ US-East-1 region. As far as I know that region covers the entire eastern US (there are two AWS regions in the western US).

    I assume that AWS will consider US-East-1 to be 100% powered by renewable energy when AWS generates as much clean energy as its datacenters consume anywhere in the Eastern United States.

    Why do you believe their goal of 100% clean energy requires them to generate that clean energy in Virginia?

    • I don’t think AWS necessarily needs to generate the electric power in Virginia — I suggested it needs to generate electric power in the Mid-Atlantic region, or, more precisely, the PJM power grid. Virginia is part of that power grid, so I said, “The Accomack solar plant could be the first of many in Virginia, and the project could set a precedent for terms of future deals.”

      I heard that AWS will contract with the solar project to supply electric power to its NoVa data centers, but my source was vague and I couldn’t find anyone to explain how that would work in practice.

      • I think you are being overly literal. All AWS wants is to be “carbon neutral”. That means generating and selling as much clean electricity as it consumes dirty electricity. No? They’ll net one against the other and thus get Greenpeace off their back. I am not sure why that has to be on the PJM grid or in the mid-Atlantic region. They have a wind farm in Indiana. I am sure they count that electricity toward their goal of being carbon neutral. As far as I know they don’t have any data centers anywhere near that wind farm (although I don’t know that for a fact).

        My bet is that they are just trying to offset their dirty electricity consumption with clean electricity generation. They’ll look for places that are suitable for wind farms, solar farms, etc. That means lots of wind, sunshine, cheap land, connectivity to a grid, willingness of the electrical utility to enter into a generation agreement, etc. They will find many, many suitable locations. Then, they will go shopping for the best tax breaks from the locality.

        Maybe I am mistaken on their goals. As you say, they are tight lipped. Maybe they are trying to figure out how to actually power their data centers with clean electricity rather than just looking for offsets. Maybe being on the same grid is a start in that direction.

        If I were Greenpeace I’d want AWS to generate clean electricity where ever the electricity is the dirtiest. I wouldn’t care if it went to the same grid as their data centers or not. Unfortunately for Virginia (in this case), we are not nearly the dirtiest generator of electricity (as long as you give nuclear a “free pass” on its non-carbon issues).

        • I’m not saying you’re wrong. In fact, the idea of generating clean power as an “offset” to dirty power makes total sense. But that’s now how I parse their press release. The operative language:

          “AWS announced that approximately 25 percent of the power consumed by its global infrastructure comes from renewable energy sources.” No talk of offsets.

          “The Power Purchase Agreement (PPA) for Amazon Solar Farm US East follows a similar PPA for Amazon Wind Farm (Fowler Ridge) in Benton County, Indiana, that was announced in January 2015.” This doesn’t say that Amazon Solar Farm is selling into the wholesale market in the PJM grid; it implies that WPS is signing the contract to buy the power directly.

          “Amazon Solar Farm US East – the second PPA that will serve both existing and planned AWS datacenters in the central and eastern US….”

          Again, the implication is that the solar farm sells to AWS’s data centers, not the wholesale market.

          But, hey, perhaps that’s what they want us to think. Maybe they’re being duplicitous here. It’s hard to know when they refuse to talk to the media.

          • They have their own electrical distribution grid between Accomack County and Northern Virginia?

            I think AWS is taking some poetic license in their press release but I don’t know.

          • The solar farm will connect to the grid through Delmarva Power, which has a transmission line extending into Accomack County. Delmarva, I presume connects to Pepco, and Pepco connects to Dominion.

  3. well I missed the Bacon bottom line…

    but I’d ask that of all places to put solar – why do we not hear about the “unreliability” of solar?

    • You’re not hearing about the unreliability of solar because this is an enterprise plant, which will make money selling into the wholesale market, not part of an integrated and balanced system. Amazon will generate as many MW as it can, and sell everything it can.

      • but I thought that the fact that solar cannot produce reliably is the reason that DOminion says trying to accommodate solar will stress the grid.

        so what happens at night and on cloudy days? It would seem that large solar would be even more inherently unreliable.

        so what make this more reliable – on cloudy days and at night?

  4. Good article.

    I would be fascinating to get deep into the deal. See how the numbers work. See the costs and profit center projections, and how they interact with subsidies and credits. See if baseline nuclear or fossil fuel power is critical to making thing work. Or how much difference the “switching points’ make, and how high profit margins too.

    • Reed, I have all the same questions. Unfortunately, AWS has no interest in talking to the media.

      What would make sense to me is if Amazon Solar Farm East sold its electricity into the PJM wholesale market with the idea of maximizing its revenue. If that was their goal, they would not care who the buyer was. I agree with Don that it doesn’t make sense to reserve the electricity for their Northern Virginia data centers exclusively. There is more to this story than I can explain.

      • Yes, perhaps what’s missing (held back) is the key ingredient that hangs it altogether, making it all work financially or potentially so, perhaps in a myriad of ways or potential ways – hence it’s the deal’s secret sauce.

  5. well this is not adding up. How is it any less unreliable by selling to PJM?

    someone is buying the power . How is PJM any different than Dominion in terms of buying and using the power ? How can PJM can apparently load-balance to mitigate variability and Dominion is saying they cannot and that’s why they cannot buy solar power from rooftops?

  6. re: ” The solar farm will connect to the grid through Delmarva Power, which has a transmission line extending into Accomack County. Delmarva, I presume connects to Pepco, and Pepco connects to Dominion.”

    so how is Dominion involved?

    I think this whole affair is fascinating… and I think is showing something strategic in Amazon’s selection of site.

  7. So Loudoun County is a single point of failure?

    • naw… this is not about data centers… it’s about how to power them…wherever they are..

      must be a bunch of flaming liberals running data centers .. feeling guilty about all the electricity they use, eh?

      solar is an economic loser so I guess Amazon and Google , etc are going to put those costs on their customers, eh?

  8. Mystery solved. This has little if anything to do with Dominion…

    Amazon is not the first company to do solar near Oak Hall which is about 5 miles from the state line.

    another company from Pennsylvania called Community Energy is also building a significant solar installation –

    http://www.13newsnow.com/story/news/local/virginia/eastern-shore/2015/06/11/amazon-to-build-solar-farm-in-accomack-county/71054424/

    and it appears they are sited where they are because they can apparently feed their power into a more solar-friendly utility than Dominion.

    I predict you’re going to see more companies – doing this – perhaps even Walmart … where they are going to build solar farms to offset their fossil fuel footprint – with or without Dominion’s involvement and support.

    very curious how other utilities and PJM can accommodate “unreliable” solar and DOminion can’t.

    Perhaps DOminion would like to explain?

  9. Sorry to be a skeptic. But Jim takes a sponsorship from Dominion and somehow produces this long story about how Amazon on the Eastern Shore is producing gobs of solar power that bypasses Dominion. As for NOVA being a Big Data place, we;; that isn’t exactly news.

    Your explanation, Jim?

    • Peter, of course, you know and and see all, but not everybody does. I don’t recall seeing any article highlighting just how big data centers are in Northern Virginia, nor how Loudoun has become so dominant in the field. So, I thought it might be news to everyone else but you.

      What’s your point about Dominion? I don’t get it.

  10. more shocking news about leftists pushing renewable energy… it just never ends – these folks clearly have no clue about the disastrous economics:

    “BENTONVILLE, Ark., November 20, 2014 —Walmart today announced the company will install up to 400 new solar projects at facilities across the nation over the next four years. This advances the company’s global commitment to drive the production or procurement of seven billion kWh of renewable energy by the end of 2020 and its goal to be supplied by 100 percent renewable energy. To facilitate these installations, Walmart selected proposals from two preferred solar energy providers, SolarCity and SunEdison, following an RFP process.

    “We are pleased to announce this expansion on the heels of the Solar Energy Industries Association’s commercial solar report, which recognizes Walmart as having the most installed solar capacity in the U.S.,” said Pam Kohn, executive vice president at Walmart and president of Walmart Realty.

    Working with numerous solar providers, Walmart has installed approximately 260 solar projects to date in the United States. Walmart’s commercial solar deployment is now 105 MW, more than double the capacity of the next largest business. This has saved more than $5 million in energy expenses, demonstrating that Walmart can keep costs low for customers while reducing environmental impact. ”

    http://news.walmart.com/news-archive/2014/11/20/walmart-builds-on-leadership-of-commercial-solar-deployment-and-expands-on-site-solar-energy-projects

    and of course , Walmart will be passing on their losses to customers…

  11. One of the curious )and unreported) aspect of this blog post is why Amazon seems so far ahead on building a large solar farm with 80 megawatts of power, while Dominion has barely scratched the surface. It has plans for a solar farm about four times smaller in Fauquier County.

    It’s also slow on the wind front: Dominion has delayed a much smaller 12 megawatt offshore test, claiming costs are too high.

    How come Amazon is pushing forward on renewables and Dominion is not in the same leagues. Instead, it is being up on the Clean Power Plan draft and pushing a $5 billion natural gas pipeline.

    As for NOVA have data centers — hasn’t half of the nation’s Internet traffic gone through there since the 1990s?

    Why so? Spending by the (hated, at least at BR) federal spending.

  12. Jim, you say, “If AWS would talk, and if AWS didn’t bind Dominion to a non-disclosure agreement, perhaps I could find some answers.” I don’t have the answers but I can tell you where to get them.

    You are correct that any electric power generated in Accomack and delivered to a Delmarva P&L facility (in this case I believe it’s a 230kV power line) enters directly into the PJM bulk power marketplace and is delivered to Dominion through that marketplace. What you’re missing here is any knowledge of the terms of AWS’s wholesale sales agreement with PJM, or Dominion’s retail sales agreement(s) with AWS. The former SHOULD be available from the body that regulates all wholesale sales, the FERC, and MAY also be available from PJM itself; the latter SHOULD be available from the body that regulates all retail sales in Virginia (except sales to government entities), which is the Va SCC, and MAY also be available from Dominion itself. These regulators are charged, among other things, with ensuring that customers are not charged discriminatory rates and terms, which means making those rates and terms public, and that means AWS’s agreements ought to be available without disclosure restrictions if you ask in the right places.
    AWS generates power under the grid operator’s control, which is to say PJM’s control; but that doesn’t mean much when you are talking about solar power generation, which is generated when available, if available, and (usually) to the maximum available, unless PJM directs the plant to limit its output due to limiting conditions on the electric transmission system.

    What happens to this power? PJM does not “transmit” the power from AWS to Dominion, but buys from AWS at its Accomack delivery point and resells an equal amount to Dominion at its Loudoun delivery points. PJM manages multiple, overlapping electricity markets, and one of these is a renewable-resources electricity market, meaning, PJM guarantees that every kWh delivered with that label has been matched by an equal amount generated and delivered into the grid somewhere from renewable resources within PJM (or perhaps purchased at PJM’s border from renewable resources on an adjacent grid). The ‘renewables’ market has its own ‘clearing’ price determined by meeting the wholesale demand for renewable power on PJM from time to time with the lowest-cost energy being generated at the same time from renewable-resource sources on PJM. Dominion buys renewable-generated power from PJM at this constantly-varying price, and AWS is paid a similar price for the power it delivers from its solar generators (it would be the same price, as PJM has only one renewable-energy market, but for constant adjustment of purchase and sale prices to reflect transmission congestion, losses, and market administration fees). Dominion in turn can sell this renewable-power at retail any way it wants, subject to SCC approval; it could be at a fixed price although usually for a big customer like AWS it would be a passthrough of PJM’s market price with some sort of markup.

    But that’s only part of the picture. Solar energy is available, well, when the sun shines. Presumably AWS is buying the rest of its power needs from Dominion and Dominion buys in turn from PJM’s renewable-energy or regular energy markets. The information you have indicates that AWS generates far less than it consumes even in the daylight hours, and the price of energy in the PJM renewables market can be relatively high at times so AWS may have the ability (under its agreement with Dominion) to specify which PJM market Dominion is to buy from, or may simply ask that Dominion purchase all amounts in excess of the amount AWS generates from PJM’s regular energy market. These variables determine what percentage of AWS’s impact on the grid is “green.”

    There’s more. AWS must buy both electric energy and “capacity” from Dominion; the “capacity” component is the contractual RIGHT to call on power delivery at any time, as opposed to the “energy” component which is the electricity actually delivered. Capacity is often bought directly by buyers (retailers or consumers) from sellers (generators) in deals lasting from days to years, “green” sources or not, and PJM also runs a market for short term capacity purchases and sales. The cost of “capacity” is the cost to have backup resources (“reserves”) in place to guarantee delivery of power from the grid regardless of the weather, the sun, generating unit outages for maintenance and emergencies, etc.; in effect it’s the cost of having a “reliable” supply of electricity from the grid, and it’s a cost probably borne in this instance by Dominion and paid with some markup by AWS. To offset this cost to AWS, PJM would be happy to buy capacity from AWS, but solar generation has little value for capacity market purposes because it’s not available reliably even in the daytime and certainly not at night.

    AWS talks about how green its solar generation of energy is, but ask about how green its capacity purchases are and you will surely get evasive answers or embarassed silence. AWS’ electricity agreement(s) with Dominion, however, should tell you what you need to know.

    • Thinking about this more, not sure what solar buys me at an Amazon site using boatloads of power 24/7. Unless they supplement with nat gas to keep a balanced load in off hours, then they are just ultimately relying on coal and nuke base load and substituting solar for natural gas peaking generation. In general I support business generating their own power needs. How about more trash-to-steam for round-the-clock renewables?

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