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Deals between large technology companies and major utilities are on the rise thanks to the boom in artifical intellitence and distributed computing. The increasing power demands of these computing resources are forcing tech companies and utilities to work in concert to develop new power projects. And these deals are increasingly focused on developing new sources of carbon free energy to lower the technological risk and cost associated with their development.

Earlier in June Google announced the development of a mechanism it calls a “Clean Transition Tariff” and an agreement with NV Energy to use the new rate as the companies develop enhanced geothermal systems to power Google data centers in the state. It’s the latest evolution in the technology industry’s pursuit for renewable energy to drive operations. The new payment being pushed by companies like Google as a way to get the renewable power they need by working directly with utilities and regulators rather than project developers.

For the last 16 years Google and other large corporations worked with renewable energy project developers to build wind and solar projects (roughly 200 gigawatts worth of wind and solar projects) to power their operations. Over time, companies have realized that to meet their around-the-clock power needs that wind and solar power needs to be supplemented by technologies like long duration energy storage, geothermal power, and, potentially, small modular nuclear reactors or fusion energy systems.

The growing realization drove the late May announcement between Amazon, Google, Microsoft, the steel manufacturer, Nucor, and Duke Energy to sign an agreement which will also use Clean Transition Tariffs to provide individualized cargon-free energy to commercial and industrial customers.

While the commitment between the North Carolina utility and its partners identifies a number of potential resources for carbon free energy, Google and NV Energy have already selected a vendor — the enhanced geothermal technology developer Fervo Energy.

Through the new deal, Fervo Energy will develop 115 MW of new, enhanced geothermal power for Google in the NV Energy service territory.

Google structured the CTT as a rate option available to any customer with a monthly energy demand above 5MW, allowing those customers to pay for the costs to bring clean, firm capacity onto the grid.

By using the CTT, the customers who pay up can access credits against both the energy and capacity of a particular project in a bundled rate. That should give customers more of a reason to ivnest in clean capacity resources.

The hope for these projects is that by integrating directly with utilities and working with regulators, they can avoid getting stalled in regulatory purgatory, which gives them an easier path to integration through direct conversations with utilities and the regulators on the public utilities commissions in charge of managing power resources and approving projects.

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