Birch Infrastructure has created a customized solution that will enable data center leader Iron Mountain to continuously and cost-effectively power its data centers in five states with renewable power. That energy, produced at the Ringer Hill Wind Farm in Pennsylvania and the Dermott Wind project in Texas, will be financially firmed up into a reliable 24/7 power solution, thereby avoiding the cost and complexity standard in traditional renewable energy purchases.
Iron Mountain had previously announced its Ringer Hill and Dermott wind power agreements in 2016 and 2017. Mark Kidd, Iron Mountain’s Executive Vice President and General Manager of Data Centers, commented: “Iron Mountain’s Data Center business has been powered with 100% renewable energy since 2017. Power Purchase Agreements with projects such as Ringer Hill and Dermott are a key part of that strategy. Birch has enabled us to manage the risks inherent in this type of agreement and confidently enter into additional agreements to responsibly power our rapidly growing data center footprint.”
“Utilizing risk management tools and assembling the right team is how we’re able to help partners like Iron Mountain meet their renewable energy and financial goals,” said Kenneth Davies, Chief Strategy Officer at Birch. “Our aim with all of our clients is to reduce the risk and uncertainty that comes with renewables while providing clean energy reliably and cost-effectively. That’s what we were able to do for Iron Mountain.”
To help reduce risk and costs and simplify renewable energy for Iron Mountain, Birch teamed up with REsurety, a provider of valuation analytics and risk management services in the renewable energy market. Specifically, Birch incorporated two weather-linked risk management products to improve on the standard virtual Power Purchase Agreement (vPPA) – a Settlement Guarantee Agreement (SGA) and a Volume Firming Agreement (VFA).
These tools allow corporate clean energy purchasers to limit their exposure to variability from weather and power market fluctuations while investing in offsite renewable energy. Birch executed the SGA and VFA for Iron Mountain with Allianz Global Corporate & Specialty’s Capital Solutions unit, in collaboration with Nephila Climate. REsurety provided the valuation and risk analytics in support of the transactions, and will serve as the calculation agent for their ongoing tracking and settlement.
“vPPAs are great tools for corporates to achieve their sustainability goals,” said Lee Taylor, CEO of REsurety. “Unfortunately, on their own they can result in ineffective hedges on energy consumption costs or speculative exposure to commodity markets and weather. Birch and Iron Mountain recognized these challenges, and we are delighted to have supported their transition to this new solution – ensuring Iron Mountain achieves its sustainability goals and its financial goals, simultaneously.”
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