DPO to directly power 100MW green data center with behind-the-meter wind PPA

Green data center operator and developer Digital Power Optimization, Inc. (DPO) announced on Jan. 8 the completion of a power purchase agreement (PPA) with a major, multinational renewable energy producer: an unnamed client who owns several renewable power assets, including multiple 150MW+ wind farms in Texas. Under the new PPA, DPO and the client expect data center deployments to reach 100MW in total size, extending across as many as six of the client’s Texas wind assets.

DPO's data centers will draw power directly from renewable wind generation facilities (behind the meter), differentiating them from the method of procuring clean power through virtual PPAs or offsets employed by most traditional computing facilities. Data center operations from the first phase buildout are expected to begin in 2024, with the remaining sites becoming operational over the following 12-18 months.

DPO's CEO, Andrew Webber, said in a press release, "We're extremely pleased to have this PPA finalized and the project now officially underway. We have been running a pilot on-site for this power producer for over a year now and have developed an outstanding partnership with them. Together, we crafted a custom and innovative PPA structure which creates zero-cost economic upside…while bringing to life some of the cleanest and most sustainable computing facilities on Earth for DPO's investors and data center tenants."

Alex Stoewer, COO of DPO, tells Lightwave that it is much more cost-effective to use power directly behind the meter, saying, "For a 100 MW deployment, we would assume we pull 80% of our aggregate power directly behind the meter at a much lower cost than we would if we were buying from the grid. We expect our contract to provide power at an all-in cost of ~$40/MWh. Pulling that same power from the grid in Texas and buying RECs would cost upwards of $70/MWh."

His math is below:

80% of 24hr/365day power used behind the meter at cost of $30/MWh * 100 MW = 24 * 365 * 100 * 80% * $40 = $28.0mm

In contrast, that same power use at $70/MWh would cost $49.0mm

"We would save," he continues, "approximately $21 million per year by locating our data center at a wind farm and using green power directly behind the meter. Meanwhile, the setup is objectively more environmentally friendly. Locating the data center right where the power is produced means far less transmission infrastructure is used up, allowing additional green power to flow into cities like Dallas and Fort Worth. The convoluted carbon accounting metrics that power users rely on are less necessary here, given that green energy is never commingled with coal or gas power before being delivered to our data center. A traditional data center might say they are using 100% green power, but the truth is they are using whatever power is being delivered to them, and only 26% of the Texas grid is wind or solar power. They buy credits to atone for the remaining non-green power use, but this does not change the fact that the electrons they are using come from whatever generation source is closest to the data center. In a big city, that is mostly fossil fuels."

Since its formation in 2020, DPO has worked with power producers to utilize power-dense computing functions as a more profitable physical offtake for undervalued power. DPO reports that they are currently the only company to have developed and operated data center projects behind the meter on wind, solar, hydro, natural gas plants, and grid-connected facilities.

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