The Big Data Center Deception – Amazon Dumps Scioto Ridge

As the year comes to a close, Senator Matt Dolan’s New Year’s Resolution appears to be his commitment to re-introduce his wind turbine setback legislation as fast as he can in 2019. Speaking to the statehouse news service, “Sen. Dolan said he plans to continue working to better inform his colleagues about the issue, describing it as an “education process.” That would otherwise be known as a “disinformation” campaign and will require State Senators and Representatives in the NW quadrant of Ohio to be effective spokespersons skilled at countering the fake news. By way of example, Sen. Bob Hackett of Madison County is adamant that there are no setbacks in any state bordering Ohio that are longer than Ohio’s. Because he has been misled, Hackett intends to help Sen. Dolan in the 133rd General Assembly as a co-sponsor of a setback bill.

The Senate will return to session to start the 133rd General Assembly on Monday, Jan. 7. The Senate’s calendar calls for members to be back in Columbus for a full session after that on January 30. The committee hearing process is set to begin on Tuesday, Feb. 5. The House has yet to release its session schedule for the new year.

In addition to setback legislation, the Senate is likely to consider a ZEN bill which provides a Zero Emissions Nuclear energy program to bail out First Energy. Not surprisingly, this idea is vigorously opposed by left-wing groups like the Union of Concerned Scientists who think support for nuclear energy is a way to block clean/renewable energy. Whatever the outcome, there is no way some wind farms in NW Ohio can replace the jobs lost or devastating economic dislocation brought about by the closing of nuclear facilities.

One of principal arguments for wind and solar development put forward by politicians is the need to have renewable energy available for the new tech economy and, in particular, fast growing data centers. We decided to look into this a little deeper and were surprised to find that Amazon Web Services does not support that view. In fact, their much touted contract to buy the power generated by EverPower’s Scioto Ridge (aka Hardin Wind) in Hardin and parts of Logan County was quietly ripped up in 2017.

In a December 14, 2018 press report from The Information, a “senior AWS executive told colleagues inside the company that renewable energy projects are too costly and don’t help it win business.” The article goes on to say that data center operators purchase wind for “the public relations benefits that come from being good corporate citizens and also to lock in long-term power supply contracts. In a moment of candor, Amazon admits renewables are too costly and they have not made any wind purchases in over two years since they walked away from EverPower’s Scioto Ridge.

Greenpeace, Sierra and other environmental activists are going after Amazon to force them into achieving 100% renewable power by 2020. That is a tall order. Amazon currently stands at 50%+ renewable. It is sickening that the charade of renewable energy being able to affordably and reliably power intensive energy users is allowed to warp reasoned energy policy. It is worse that politicians like Senator Dolan play a part in this charade.

In the meantime, earlier this month Ohio Montauk Innovations LLC, a Google data center affiliate, received a set of incentives from the State of Ohio for a $600 million data center in New Albany, a high income suburb of Columbus. The project is intended to create $2.5 million in payroll. The Ohio Tax Credit Authority approved a 100 percent, 15-year data center sales tax exemption, though it has the option to be renewed for up to 40 years through October 30, 2058. That agreement would be worth $43.5 million over the life of the tax credit, which it can claim on sales and use taxes associated with data center equipment purchases at the site.

Approximately one mile from the new Google data center, Facebook is building a $750 million data center. A recent look at national data center development by Data Center Dynamics explains that “the American Midwest has become a region of choice for colocation and data center investments, offering a cost-effective and reliable alternative to many densely populated coastal regions. Also, being centrally located between both coasts affords an abundance of network connectivity and affordable power, it’s pretty easy to understand why this region continues to develop. “

Given the above, we can say once again that the “emperor has no clothes”. Data Centers aren’t waiting on reduced wind turbine setbacks or renewable energy mandates in Ohio to build. But data centers do need affordable energy. If they are forced to buy Ohio renewables by environmental activists and politicians who want to look ‘green,’ that high-cost energy would need to be made cheaper by federal PTC subsidies, county Payments-in-Lieu-of Tax (PILOT), and stolen easements across non-participating properties through setbacks measured from homes. Otherwise, data centers can buy cheaper renewables from windier states. They could also buy nuclear energy which eco-activists oppose despite it being clean energy. And then there is always natural gas! Or clean coal!

An important article in this issue speaks to “energy realism” as demonstrated by the United States at the recent climate conference in Poland. “There are reasonable nations who are willing to confront the fundamental financial and technological realities of today’s energy landscape. By hosting a side panel at the climate talks focusing on how nuclear energy and technology to burn fossil fuels cleanly can contribute to achieving emissions goals, the U.S. has positioned itself firmly as the leader of the latter.”

“The Trump administration’s willingness to shake off pressure from other developed countries to focus exclusively on renewable energy fits into the policy of energy realism which has characterized Rick Perry’s tenure at the U.S. Energy Department. Secretary Perry laid out his vision for American energy policy in March at the CERA Week energy conference in Houston, emphasizing that “we don’t have to choose between growing our economy and caring for our environment. By embracing innovation over regulation, we can benefit both.”

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