Demand Management, Energy Efficiency, Energy Procurement  -  August 7, 2018

Digital Realty aggregates customer demand to cut energy costs

Digital Realty, a global provider of data center, colocation, and interconnection solutions, announced it is contracting electricity supply in bulk to achieve lower prices throughout the year, while simultaneously providing protection against escalating prices during seasonal spikes.  

"Aggregating cumulative customer load demand across multiple Digital Realty facilities within a given metropolitan area enables us to obtain substantial discounts on our projected utility load for extended periods of time," said Erich Sanchack, executive vice president of operations in a statement.  "These agreements represent some of the lowest-cost pricing within our portfolio.  As a result, we are able to help insulate our customers from financial risk and cost volatility, leading to competitive advantage and greater customer satisfaction.  We pass the savings directly along to our customers, significantly lowering their total cost of ownership."

Digital Realty is applying this method in the deregulated markets of Connecticut, Illinois, Massachusetts, New Jersey, New York and Texas. The company recently executed an energy consolidation strategy for its greater Chicago portfolio, reporting locked-in rates more than 20% below current market through 2022.  

 The statement noted that in Texas, scorching temperatures in Dallas, Austin, San Antonio and Houston recently drove the state electric grid to an all-time peak demand record of more than 73,000 megawatts.  The spike in demand, along with reduced generation reserve from the retirement of coal plants, pushed daily market pricing as high as $184 per megawatt-hour.  “Digital Realty was able to capitalize on its market presence, energy procurement strategy and investment grade credit ratings to protect customers by securing low market rates for the majority of its load.”

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