The Role of the Customer in Data Center Decarbonization

The data center industry has a large electricity appetite, accounting for at least 1% of electricity use worldwide1. Demand for data center services is rising with the expansion of data-intensive technologies such as artificial intelligence, autonomous vehicles, and smart energy systems. Given the current and growing impact of the sector, finding and implementing sustainable energy solutions in data centers will be crucial to reduce their carbon footprint. 

Enter the data center customer. 

Nearly every company uses data, and many purchase space in colocation data center facilities or contract with public cloud service providers. This buying power affords customers substantial leverage to make asks of their data center providers that accelerate the decarbonization of the data center industry. In addition, pushing for renewable energy solutions in their data services contracts can help companies advance their own emissions goals, often more easily than by addressing emissions sources that are deeper in their supply chains. 

Data center customers can ask some probing questions to help accelerate renewable energy procurement and initiate conversations with their service providers: 

By asking these foundational questions, companies can advance their own energy and sustainability goals while also accelerating the decarbonization of the data center industry. Requesting renewable options and pushing for customer-provider collaboration is crucial to inform data center providers that there is customer demand for more sustainable energy solutions, and to ensure the feasibility and mutual benefits of these solutions. 

REBA’s Future of Internet Power (FoIP) program brings together data center customers and providers to create collaborative solutions to renewable energy procurement in data centers. Most recently, REBA members participating in FoIP made key updates to the Corporate Colocation & Cloud Buyers’ Principles and Toolkit to reflect the increasing presence of outsourced cloud service providers in the market, and to support corporates in taking more aggressive action on climate and renewables. The Principles outline six criteria that companies using colocation or cloud services would like to see their service providers meet, and the Toolkit provides tactical guidance on how data center customers and providers can put the Principles into practice.

Get Involved

REBA members are encouraged to join the FoIP initiative to get more involved with the effort to power the internet with 100% renewable energy. All data service customers, regardless of REBA membership, are encouraged to use and sign the Corporate Colocation and Cloud Buyers’ Principles listed on the FoIP webpage. If you have any questions about FoIP, renewable energy in data centers, or other ways to get involved, please contact supplychain@rebuyers.org.


1 Energy Innovation (March 2020). How Much Energy Do Data Centers Really Use?

Bringing the Full Benefits of an RTO to the West

States in the West are in the process of evaluating options for the future of western energy markets. The most cost-effective and customer-friendly option is to develop a western Regional Transmission Organization (RTO) with a large geographic footprint. New research from a U.S. Department of Energy (DOE) funded state-led study supports this, finding a western RTO could provide nearly $2 billion in gross benefits per year by 2030 and decrease annual emissions output by an additional 3 million metric tons

The path to forming a western RTO is not an easy one, but harnessing multi-state momentum could maximize clean energy benefits and address future transmission challenges. Western states may seek greater collaboration and technical assistance to develop a market pathway that simultaneously accelerates state decarbonization efforts. 

Source: Energy Strategies, State-led Market Options Study: Market and Regulatory Review Report, July 30, 2021

According to the state-led study, a single west-wide RTO provides significant financial savings and is the best option to accelerate clean energy technology deployment. In the near term, a western RTO could save $1.3 billion in annual gross benefits mainly by reducing energy production costs by dispatching least-cost resources – which are often clean energy technologies. Long-term, the study found that an RTO increases load diversity and in turn drives future cost savings by reducing capital investment needed for resource buildout. By 2030, these capacity savings from load diversity represent 65% of total RTO benefits. Developing a full RTO, which consolidates balancing authorities, would also lead to a more centralized, transparent, and coordinated approach to reliability responsibilities.

Transmission expansion is also a critical component of RTO expansion in the west. Transmission buildout improves operational efficiency by reducing costly curtailment and connecting more remote generation to the grid. This latest study echoes findings from a Utah study on transmission expansion released earlier this year, which calls for transmission expansion in order to tap into the state’s resource potential and support future generation buildout across the state. Looking more broadly across the west, the state-led study found that new transmission capacity would enhance the performance and economic value of new and expanded energy markets, driving a conservative estimate of $90 million per year in additional operational savings with a west-wide RTO

RTOs are critical to unlocking the full potential of existing and new transmission. A full RTO construct would utilize financial transmission rights and security-constrained economic dispatch (SCED), eliminate rate pancaking or wheeling costs, and increase competitive solicitation. RTOs also reduce the need for new transmission projects and investments. The recent Colorado Transmission Coordination Act study found optimizing transmission within an RTO construct would result in an additional $46-85 million in annual cost savings.

The Path Forward: Further State Collaboration is Needed 

To realize the benefits of a western RTO, a state-driven, bottom-up approach is the strongest path forward to ensuring market expansion is coordinated with state policy and customer interests. Fostering additional state-level consideration of future options is key, as western states are at different points along their market expansion journey. Collaboration among states to build off existing studies will help states move forward more efficiently and in a thoughtful strategic manner that complements the west’s needs. While Nevada and Colorado have recently required their utilities join an RTO by 2030, Arizona, New Mexico, and Oregon are pursuing their own state-specific assessments. 

Additional states may pursue independent assessments but will also need to continue coordinating on findings and solutions. REBA supports funding for the Department of Energy’s Office of Electricity included in the Build Back Better Act in order to bolster state-led assessments by providing technical assistance for grid, economic, and emissions modeling. To learn more about REBA’s involvement in organized wholesale market expansion across the U.S., contact innovation@rebuyers.org.

Multi-State Study Confirms: A Western-Wide RTO Provides Substantial Gross Benefits

New research shows that bigger is better when it comes to expanding organized wholesale markets in the West. A two-year regional state-led Market Options study Exploring Western Organized Market Configurations: A Western States’ Study of Coordinated Market Options to Advance State Energy Policies has analyzed potential market configurations in the western region. The results are clear: a western-based wholesale market managed by a Regional Transmission Organization (RTO) covering a large geographic footprint is the most cost-effective and emissions-reducing approach to reaching western state energy goals. 

This state-led Market Options Study was a U.S. Department of Energy funded effort led by Utah in partnership with the Energy Offices of Idaho, Colorado, and Montana. The study found that compared to an energy imbalance market/real-time market and day-ahead market, the formation of a western RTO would offer nearly $2 billion in gross benefits per year by 2030. In contrast, the day-ahead energy market could result in $747 million in annual cost savings. Even accounting for the administrative costs of setting up an RTO, estimated between $187 to $513 million per year, savings would still be significantly greater under a full-market construct.

This study is representative of the larger interest from western states to analyze market structures in order to achieve additional cost savings and improve regional planning. Two-thirds of the U.S. relies on RTOs to centrally optimize the operation of competitive and efficient real-time and day-ahead markets across diversified regions. However, many western states are still limited by siloed utility planning. Outside of organized markets, utilities unilaterally plan for resources and transmission developments, losing out on the opportunity to cost-effectively pool resources at least cost.

Source: Energy Strategies, State-led Market Study: Technical Report, July 30, 2021.

Other state-level research confirms the projected cost savings of forming a large western organized wholesale market. Colorado’s recent analysis of possible market formations found that a full RTO-managed market would maximize benefits, primarily from the reduced need for utilities to invest in storage resources. Both studies found that the broadest market footprint would provide greatest value due to the enhanced ability to integrate renewables when balancing over wider geographic areas. In addition, a wider market footprint under a single RTO would consolidate administrative costs.

Developing a more extensive organized wholesale market in the West could be the tool that helps western states, utilities, and customers achieve their clean energy goals cost-effectively. The state-led market study demonstrates that a western RTO can lead to meaningful carbon emissions reductions, decreasing emissions by an additional 3 million tons annually. Carbon emissions reductions across the West would benefit all customers, regardless of their individual market participation. Participation in a western RTO would also directly support state goals targeting clean energy or net-zero targets between 2045 to 2070. Energy customers benefit as research from the REBA Institute  shows organized wholesale markets provide greater customer choice and market transparency that help customers achieve clean energy and carbon reduction goals. 

As state momentum continues to grow, this study marks an important step in identifying a western-wide RTO as the most impactful and cost-effective market option for western states. To learn more about REBA’s work on organized wholesale market expansion in the West, contact innovation@rebuyers.org.

RTO Governance: An Emerging Tool to Meet Decarbonization Goals

Regional Transmission Organizations or Independent System Operators (RTOs/ISOs)1 operate the organized wholesale energy markets that are essential to unlocking a cost effective, rapid, clean electricity transition for all customers.  RTOs can provide participants billions in benefits by: 

Successfully navigating RTO governance structures is key to achieving decarbonization efforts because governance decisions shape market performance and benefits. An RTO’s governing body determines which stakeholder concerns are addressed, how issues are resolved, and how rules and operating procedures are designed. Stakeholders are increasing their involvement in RTO decision-making as industry experts acknowledge that these markets are instrumental in achieving a zero-carbon future. 

The energy customer voice needs to be present in RTO governance to ensure an RTO’s market design accelerates grid decarbonization and benefits flow to the end-use customer. There are several barriers that can limit large customer engagement in RTO stakeholder processes, including a lack of customer education. Each RTO has a unique stakeholder process that allows customers to weigh in and make proposals. Learning the ins and outs of RTO governance can help renewable energy customers participate in stakeholder processes and champion decarbonization.

While stakeholders continue to engage in existing markets, there is growing momentum to expand RTOs into areas where this level of regional coordination is absent. In the West, the Southwest Power Pool (SPP) is developing a proposal to operate a market called “RTO West” by 2024. Similarly, CAISO has continued to build out its Energy Imbalance Market. At the state level, Colorado and Nevada have enacted laws requiring utilities to join RTOs by 2030. The expansion of well-designed and implemented organized wholesale markets is imperative to reach zero-carbon targets, and requires the customer voice be incorporated into decision-making. Understanding the landscape of existing governance mechanisms is fundamental for energy customers evaluating proposed governance structures and mechanisms proposed within new markets.

For energy customers and other stakeholders looking to learn more about the basics of RTO governance, the REBA Institute’s U.S. Organized Wholesale Electricity Markets Governance Primer is an educational resource that introduces key governance elements and foundational concepts necessary to understand and engage with RTOs. The Primer covers how each RTO manages and changes market rules and operations as well as how customers can participate in stakeholder processes. Acquiring knowledge on decision-making processes allows energy customers an opportunity to engage and provide input on decisions that could impact their renewable energy goals. Elevating the customer voice within dialogues on proposed governance in new markets is also key to accelerating the clean energy transition in those regions.


 1Though there are some small differences between an RTO and an ISO, the terms are often used interchangeably. Here both entities are referred to as RTOs for simplicity.

Approaches to Resource Adequacy and How They Impact Energy Customers

Energy customers are increasingly interested in resource adequacy because it plays an important role in ensuring grid reliability and impacts clean energy integration. Resource adequacy – or the ability of the electric grid to balance forecasted electricity supply and demand with sufficient energy resources – is critical for making sure the lights stay on. Now more than ever, extreme weather as a result of climate change plays a leading factor in grid interruptions, with weather-related events causing a 67% increase in power outages affecting at least 50,000 customers between 2000 – 2019. Compared to other grid disruptions like cybersecurity and the COVID-19 pandemic, weather-related events caused a record number of end-user disruptions over a five-year average, according to the North American Electric Reliability Corporation (NERC). Reliable electricity is incredibly important to customers as power outages can lead to significant public health and safety risks and economic losses.

Basic Resource Adequacy Planning Steps

At the most basic level, resource adequacy planning requires grid operators to forecast future demand, and then determine the amount of additional generation needed to protect against potential outages, known as a target reserve margin. Grid operators then utilize existing market and regulatory mechanisms to meet the target reserve margin. These steps are illustrated below.

resource adequacy figure
Figure 1. Steps to Managing Resource Adequacy. Source: REBA Institute Resource Adequacy Primer.

Though resource adequacy is a foundational component for maintaining grid reliability, having an adequate supply of resources to meet demand does not ensure reliable delivery of electricity. As seen in the August 2020 heat wave and February 2021 deep freeze, in addition to accurately forecasting demand, grid reliability can suffer if equipment is not properly weatherized. Inaccurate resource adequacy planning can impair reliability if resources are under-procured, while overprocurement of resources leads to excess costs. Both scenarios can negatively impact energy customers who want to minimize outages while avoiding unnecessary costs.

Market Mechanisms and Planning Approaches

Regional regulatory structures often determine market mechanisms or planning approaches. Grid operators in markets operated by Regional Transmission Organizations (RTO) or Independent System Operators (ISO) either operate capacity markets to incentivize future resources or rely on energy only markets with bilateral contracting to drive investment. A key feature of RTO and ISOs is resource sharing across utilities which reduces costs. In regions without organized wholesale markets, such as the southeast and west, resource adequacy planning responsibility is managed by utilities.  

Resource Adequacy and Clean Energy

Resource adequacy approaches matter because they not only impact reliability and cost, but they also affect clean energy integration. Rules or practices that favor certain resource characteristics can advantage fossil fuel resources and limit the participation of wind, solar, and demand response.  Finally, overprocurement can crowd out development of clean new resources or mute market signals that would support development of flexible resources to support greater renewables.

What’s next for resource adequacy?

Resource adequacy is a key component to reforming and expanding well-designed and implemented organized wholesale markets to accommodate higher renewable energy penetration while ensuring grid reliability. Resource adequacy and how it evolves is essential to REBA’s mission of achieving a decarbonized grid at the lowest cost for customers. The Resource Adequacy Primer: General Approaches and Importance to Customers is the first REBA Institute resource in a new series focused on resource adequacy. The primer highlights the importance of resource adequacy to customers and describes various approaches and their implications on cost and clean energy. Future products will dive deeper into approaches in specific markets and outline proposals to improve resource adequacy planning.

REBA Member Highlight: Vantage Data Centers

What prompted your organization to join the Future of Internet Power (FoIP) program?

Vantage Data Centers recently committed to achieving net zero carbon emissions globally by 2030. We recognize that procuring renewable energy will be a key enabling strategy to reach our own sustainability goals, as well as those of our customers. We are taking a forward-looking approach to decarbonization by investing in the team, technology, and processes needed to actively reduce our carbon footprint across the design, construction, and operation of our data center campuses. 

We recognize that we cannot achieve our sustainability goals alone.  Organizations like REBA help enable additional collaboration and networking among industry leaders so that we can partner together to solve problems and learn from each other.  The FoIP program offers valuable resources and opportunities for networking with our customers and peers to find solutions to address barriers to energy efficiency and renewable energy procurement. 

What are some of the biggest challenges when it comes to working with your customers to mutually pursue energy goals? 

While renewable energy projects are important to helping us reach our carbon goals, we can’t forget that the greenest kWh is the one you never use. We can design and build a high performance and energy efficient facility; however, we won’t see the full benefits of the design if we don’t follow best practices in the day-to-day operations. Getting the most out of our facilities requires a strong commitment to communication and teamwork to closely monitor the performance of our facility and resolve issues quickly to avoid wasted resources and keep equipment operating in optimal conditions. We partner with our customers to implement industry best management practices such as hot and cold aisle separation, elimination of bypass air, and optimizing tile management to reduce energy use. These are just a few examples of how we maintain the optimal power usage effectiveness (PUE) for the data modules in our facilities which helps us, and our customers, save energy to reach our goals. 

What does the future of customer engagement look like for your organization, in terms of energy management?

Vantage is excited to continue partnering with our customers to reach sustainability goals. Our newest commitment to net zero carbon emissions by 2030 is in alignment with many of the sustainability objectives of our customers, and we are excited about the new opportunities that this provides.  Reducing the emissions associated with our industry will require a high level of engagement with our customers, utility partners, and our vendors to assess and implement new technologies and processes.  

Envision a future where every organization has a path to renewable energy – what is the next step towards a zero-carbon energy future?

The idea of a zero-carbon energy future is an exciting one, but it won’t be easy.  Achieving this goal will require a commitment to innovation, partnership, and continuous improvement from everyone in our industry.  Organizations need to continue to collaborate with utility partners to help manage and reduce demand while integrating large-scale storage solutions to back up renewable energy power production. These solutions will enable more reliable, carbon-free energy at all hours of the day. In addition to continued collaboration and support of renewable energy solutions, we should also work with local communities to develop solutions that support their sustainability initiatives. For example, in Zurich, Vantage Data Centers has designed our facilities with the ability to connect to district heating for municipal projects.  This would enable the redeployment of waste heat generated by our data centers to create a heating source for other buildings creating a valuable community resource. To reach our goals, we all will need to work together and learn from each other to develop and implement innovative solutions that will help us build the future we want to see. 

Learn more about the REBA FOIP program

LESsor Sustainable Energy Network (LESSEN): A Lesson in the Value of Community-Based Education

Large energy buyers continue to drive progress through their ambitious clean energy goals in effort to reduce greenhouse gas emissions. Corporate initiatives like the Business Alliance for Scaling Climate Solutions and  Amazon’s Climate Pledge are emerging with increasing frequency, and the number of companies setting Science Based Targets continues to grow rapidly. Knowledge-sharing and education among large energy buyers is critical to meet the pace and scale of corporate climate ambition.

Renewable Energy Buyers Alliance (REBA) members, who are leaders in corporate sustainability and renewable procurement, are quick to say that they are never done learning. While REBA provides its members with a place to address market barriers, discuss new solutions, and engage in policy advocacy, first and foremost, REBA provides a place to build and learn from a community. One opportunity to engage in community-based learning is REBA’s LESsor Sustainable Energy Network (LESSEN) program, which concluded its first season in May 2021.

LESSEN is a training program for owners and operators of data centers and commercial real estate that focuses on the key elements of a successful sustainable energy strategy. The program combines presentation of foundational knowledge with real-world insights from experienced energy buyers serving as faculty who engaged with topics first-hand. Large energy buyers who have pitched a business case for renewable energy, pursued on-site generation, or completed an off-site deal can share best practices for project execution, as well as the common pitfalls to avoid:

“This program educated me on all of the different options for renewables in the context of real estate. A huge value-add was having experts who had been through the process before and could share their experiences.” – LESSEN Season 1 attendee 

While most participants joined the program to address specific questions about renewable energy procurement, what they found beyond knowledge acquisition in the sessions was a community that can support them going forward in their renewable energy journey, long after the LESSEN program is over:

“My goal was to absorb as much information as I could about sustainability. While I now feel equipped to get into the weeds, my biggest takeaway from the program was my connection to this group of people who have extensive knowledge of renewable energy and can give me honest guidance about how to move forward with my process.” – LESSEN Season 1 attendee 

“I can hire the experts I need to do a project, but having the LESSEN network is the most important thing to me as I’m building out our sustainability program.” – LESSEN Season 1 attendee

As more corporations recognize the imperative to decarbonize their entire value chain, including data services and leased space, LESSEN serves as a strong reminder of the importance of community-based learning to advance corporate renewable procurement. 

The second season of LESSEN begins this September. To learn more on how to join this program, contact supplychain@rebuyers.org

If you are not a REBA member, find out how you can join this community of collaborative learning

Increasing Engagement at the Federal Energy Regulatory Commission

The Renewable Energy Buyers Alliance continues to leverage the voice of large energy buyers to guide federal policy discussions.

As an independent agency that oversees components of natural gas, oil, hydropower, and the electricity industry sector, the Federal Energy Regulatory Commission’s (FERC) decisions influence how fast the U.S. power sector can adopt zero-carbon energy sources. Therefore, it is critical that the needs and priorities of large energy buyers are considered during FERC’s regulatory review process to ensure that resulting policies green the grid for all energy customers while addressing reliability, equity, and cost allocation concerns. 

One of REBA’s key priorities is to support ambitious decarbonization goals of large energy buyers by increasing access to clean energy through well-designed organized wholesale markets operated by Regional Transmission Organizations (RTOs), which also requires development of transmission infrastructure. FERC’s jurisdiction over the electric industry – including regulation of interstate transmission and oversight of wholesale power markets – reinforces the importance of raising awareness of energy consumer needs through available platforms.

FERC provides the ability to provide feedback on proposals being considered by the agency through a comment filing period, which serves as means to engage and gather views of stakeholders. REBA submitted a filing in response to the Commission’s June 23-24 Technical Conference on Resource Adequacy in the Western Interconnection (Docket AD21-14) to increase awareness of energy buyer priorities in the West, support state-led efforts to coordinate on electricity markets, and highlight the benefits of RTOs in resource adequacy planning. These comments closely followed REBA’s first-ever standalone filing at FERC highlighting the value of organized wholesale markets, which was submitted on June 25 as part of the Commission’s review of the financial incentives utilities receive for joining an RTO (Docket RM20-10). 

In addition, REBA has elevated to FERC the need for a more competitive wholesale market structure and advocated for a technical conference on the benefits that can be unlocked in the Southeast. REBA and its Clean Energy Coalition partners—the Advanced Energy Economy, the Advanced Energy Buyers Group, and the Solar Energy Industries Association— submitted comments on March 15 and April 14 urging FERC to thoroughly assess the Southeast Energy Exchange Market proposal (Docket ER21-1111), which would enhance existing bilateral energy trading among utilities, to ensure it is just and reasonable for all ratepayers in the Southeast.

This series of filings in 2021 marks a monumental step forward for REBA in its engagement with FERC. With recent announcements from FERC to address important topics including transmission planning, cost allocation, and generator interconnection, REBA looks forward to additional engagement while representing large energy buyers in federal policy discussions. 
To learn more about REBA’s ongoing involvement at FERC and get involved, contact the REBA’s Policy Innovations team at innovation@rebuyers.org.

Call to Fund State Involvement in Organized Wholesale Power Market Expansion

REBA joins key peer organizations urging Congress to support a dedicated program at the Department of Energy’s Office of Electricity (DOE-OE) and the State Energy Program (SEP) that would provide technical and financial assistance to states related to organized wholesale power market expansion.

Organized wholesale power markets are essential for accelerating decarbonization efforts in the US. These markets are important mechanisms for ensuring grid reliability while reducing costs for energy customers in the transition to a carbon-free economy. While there is significant momentum at the federal level for increasing energy infrastructure and organized markets, REBA recognizes that states face additional barriers to participating in these markets. These barriers include the technical capacity to align with existing markets and to study the specific costs and benefits associated with joining a Regional Transmission Organization (RTO) or Independent System Operator (ISO). Congress should provide funding support to states through a dedicated program at the DOE-OE and the reauthorization of the SEP. Funding for these programs will facilitate greater state involvement in developing well-designed, customer-centric organized wholesale electricity markets that benefit end-use customers.   

Click below to download the full letter for additional details and list of signatories.

REBA 7/21/21 Letter

Building a Business Case for Renewable Energy

Why should your company buy renewable energy anyway? Many sustainability professionals see renewables as a way to combat climate change. But when you dig deeper, you’ll find that every department at every organization will view the reasons for going carbon-free in a different way. Communications might see it as an opportunity for good PR. Finance might appreciate the budget certainty that comes with some types of renewable energy. The list goes on…

A well-articulated business case for renewable energy not only jumpstarts an organization’s procurement process; it helps to level-set across an organization by providing a constant reminder of the company’s why and guiding the organization towards the types of renewable energy solutions that best align with its goals and values.

REBA’s member exclusive Building a Business Case for Renewable Energy Primer walks new large energy buyers through the process by outlining questions to ask to uncover company drivers and to promote action. The Primer examines criteria that may inform choices about the types of renewable energy solutions that work best for each organization, and offers lessons learned that illustrate how experienced buyers have approached the business case for their organizations.

  • What is your leadership team’s approach to renewables energy? Does the company want to lead or just keep up with the evolving market?
  • Are customers or investors asking your company power its operations sustainably? Could making the switch to renewable energy give you a leg up against your competition?
  • Could prioritizing renewable energy help you attract or retain talent? Potential employees are increasingly concerned about working for companies that are making the world a better place.
  • Might switching to renewable energy help control future costs or reduce your exposure to market volatility?

In many geographies, a wide variety of renewable energy solutions are available. Once you have your business case and have received support from the necessary stakeholders, the next step is to determine which types of renewable energy solutions are likely to be successful for your organization. Sometimes, creating the business case is intertwined with identifying suitable solution options; the processes aren’t always neat and sequential.When you truly understand the benefits of renewable energy to your organization, you will find it easier to gain initial buy-in, to identify best-fit solution types, to eventually obtain specific project approvals.

REBA members can access the Building a Business Case for Renewable Energy Primer through REBA InterConnect, a digital hub to help member companies accelerate their renewable energy goals. Not a member? Learn more about REBA membership options.