Digital Realty has taken an uncommon—and strategic—step in the U.S. data center market: signing a 500 GWh annual hydroelectric power purchase agreement (PPA) with Current Hydro LLC, sourced from three plants located on the Ohio River. The commitment, which includes carbon-free energy attributes (certified renewable energy certificates), covers 68 MW of installed capacity distributed among New Cumberland (19.99 MW), Pike Island (19.99 MW), and Robert C. Byrd (28.5 MW), situated between West Virginia and Ohio. The energy will be injected into the PJM Interconnection market and allocated to the Digital Realty data center portfolio in Northern Virginia, the largest data center cluster in the world.
The agreement introduces a crucial nuance for the market: beyond its label as renewable, hydroelectric power provides baseload capacity with a predictability that variable technologies like solar or wind cannot always offer. This firm profile is especially valuable at a time when AI computation demand is increasing for continuous loads and unprecedented thermal densities per rack.
Why Hydroelectric Power Matters for Data Centers (and AI)
For years, hyperscalers and large colocations have maintained their decarbonization strategies through portfolios of solar and wind PPAs. This approach has been effective in balancing annual emissions and achieving 100% renewable targets “on balance”. However, the hourly consumption pattern of data centers—especially with AI workloads that demand near-continuous capacity for training and inference—is accelerating a paradigm shift toward 24/7 supply and dispatchable or baseload energy.
Here, hydropower offers comparative advantages: stability, good capacity factors, and technological maturity. In this case, analyzing the committed data—500 GWh per year over 68 MW—yields an annual utilization factor close to 84%, consistent with series utilization on a regulated river flow. This profile quality allows operators like Digital Realty to more realistically align their hourly demand with carbon-free supply, a goal increasingly valued by clients, regulators, and local communities.
It’s Not Just “Green”: It’s Decarbonization Where It Matters
The agreement specifies that the energy and its attributes will be delivered in PJM and allocated to Northern Virginia. In other words: decarbonization takes place within the same electric region where Digital Realty’s large-scale campuses are concentrated (Loudoun, Prince William counties, and surrounds). The geographic additionality criterion is becoming increasingly important: buying renewables in another region or country does not always reduce the local carbon footprint of actual consumption.
Additionally, Current Hydro specializes in activating existing, non-electrified dams and optimizing run-of-river systems. This minimizes additional environmental impacts, leverages already-built hydraulic infrastructure, and creates local value (income and employment) with new turbines and equipment. In a context where public opinion scrutinizes every megawatt demanded by data centers, upgrading or electrifying existing assets is often more socially acceptable than new greenfield developments.
Timeline and Scope: 2029 as the Entry Horizon
The commercial operation of the three projects is planned for 2029. This timeline aligns with the surge in demand anticipated from major tech companies for the massive deployment of AI and cloud growth. Meanwhile, PJM—one of North America’s most complex and liquid markets—provides financial and physical delivery mechanisms that facilitate 24/7 structures and hourly matching with increasingly sophisticated instruments.
For Digital Realty, tying down 500 GWh with baseload technology means reducing volatility in part of its energy mix and improving its climate performance. For clients—from banks to big tech—it helps mitigate reputational and regulatory risks and align with internal decarbonization strategies based on actual rather than just accounting metrics.
A Move That Breaks the Mold (and Sets Trends)
While hydropower is common in regions like the Northern European countries, few direct PPAs have been signed specifically between data center operators and hydroelectric providers in the United States and continental Europe. Digital Realty had already signaled its interest with a hydropower agreement in Germany and throughout 2025, has announced multiple renewable supply deals—from 13.4 MW of solar in Illinois (alongside Soltage) to its participation in 24/7 “energy matching” programs in Sweden and France (February).
The hydro trend in Virginia fits within a broader industry dynamic: this year, Google became one of the first hyperscalers to sign large-scale hydro supply agreements in the U.S., closing a 3 GW framework deal with Brookfield, with its initial contracts executed at Holtwood and Safe Harbor in Pennsylvania, providing over 670 MW capacity with 20-year commitments. The message is clear: fewer “offsets” at year-end and more long-term contracts, with technologies aligned to the load profiles of data centers.
Market Signal: Strength, 24/7, and Steady Growth
For investors, utilities, and regulators, the message is twofold:
- Resource reliability. The hydro power agreed upon anchors a significant volume of consumption with carbon-free energy and a stable profile within the electric region where the consumption materializes. This reduces mismatches between “green” energy purchased and energy actually consumed each hour.
- Transition to 24/7. By combining hydro with solar and wind, it improves hourly coverage. This is a step toward 24/7 strategies that prevent gaps during nights or winter, and limit the need for external attributes (like non-coincident certificates).
Moreover, the agreement anticipates a key debate: how to grow in Northern Virginia—where grid capacity and social acceptance are tight—without increasing residual emissions or intermittency. Baseload contracts like this mitigate criticism and buy time for storage (BESS) and new grid infrastructure to mature.
Local Impact: Jobs, Supply Chain, and Tax Revenue
Current Hydro highlights that developing hydro on existing dams with environmentally responsible criteria generates employment and leaves revenues in local communities in Ohio and West Virginia. The auxiliary industry—engineering firms, turbine manufacturers, electrical contractors—gains multi-year contracts; counties benefit from tax income and training programs tied to the plants’ lifecycle.
Meanwhile, Digital Realty bolsters its narrative with state and local authorities as a responsible operator investing in firm power and valorization of public assets (dams) within its regional footprint. In an ecosystem with temporary moratoria or stricter conditions for new campuses, these gestures carry weight.
What Does This Mean for Clients in the Virginia Hub?
For colocation and hybrid cloud clients, this agreement results in three practical effects:
- Better alignment with internal net-zero policies: the baseload supply reduces the need for offsets or external attributes.
- More predictable pricing: long-term PPAs with firm resources limit cost volatility, a critical factor in the data center’s OPEX.
- Traceability: the regional approach (PJM → Northern Virginia) enhances the credibility of ESG reports and eases audits.
Hydro + Solar + 24/7: A “Mix” with Fewer Gaps
The combination of hydropower with solar agreements (like the 13.4 MW deal in Illinois) and participation in 24/7 programs in Sweden and France creates a mix that covers more hours and reduces the “fossil islands” sometimes hidden beneath a 100% renewable annual balance. The industry roadmap indicates that as batteries and demand flexibility advance, these baseload PPAs will be essential transition pieces to maintain SLA and growth without increasing the carbon footprint.
Competitive Landscape: Few Hydro PPAs, High Demand
The text emphasizes that few data centers have engaged in direct agreements for hydroelectric supply. This “blue ocean” suggests an opportunity: operators with risk management capabilities and structuring expertise can secure firm megawatts at attractive terms before competition for baseload assets intensifies. Cases like Digital Edge (Philippines), Iron Mountain (U.S.), and Aruba (Italy) reinforce the idea that direct hydro fits specific geographies and systems where regulation and hydrology permit.
What’s Next?
With commissioning scheduled for 2029, focus will be on:
- Permitting and construction: adapting existing dams requires fine engineering and detailed schedules.
- Integration with PJM: structuring deliveries and attributes to maximize matching with Virginia loads.
- Stakeholder communication: local communities, regulators, clients, and markets will demand transparency on impacts and benefits.
- Evolution toward 24/7: consolidating hourly tracking tools and complementary contracts (like storage and demand response) to close residual gaps.
In conclusion, Digital Realty anticipates and leads an inevitable trend: decarbonizing with hourly profiles and signing clean energy where it’s actually consumed. In the planet’s hottest hub for data centers, securing 500 GWh of hydro is not just a figure; it’s a signal of seriousness on the path toward AI and cloud that are grid-compatible and socially responsible.
Frequently Asked Questions
1) What does hydroelectric power add compared to solar or wind for an AI data center?
Hydro offers a more stable (baseload) profile and greater hourly predictability. For AI workloads that require continuous capacity, this means fewer gaps to fill with attributes or batteries, and better 24/7 alignment between consumption and carbon-free generation.
2) What does it mean that energy is delivered in PJM and allocated to Northern Virginia?
PJM is the regional electricity market that coordinates transmission and liquidates energy across several states. Delivering energy and environmental attributes in PJM enables assignment to Digital Realty’s consumption in Northern Virginia, reducing the geographical gap between green generation and actual load.
3) Is 500 GWh enough to decarbonize an entire campus?
It depends on size and use case. 500 GWh/year roughly corresponds to significant baseload coverage. In practice, operators combine multiple PPAs (hydro, solar, wind), 24/7 programs, and increasingly storage to minimize residual fossil energy usage throughout the year and hour.
4) Why target 2029 as the date?
Activating new turbines on existing dams, obtaining permits, manufacturing and installing equipment, and completing interconnections take years. Setting 2029 aligns the entry of firm energy with the projected growth in AI workloads and cloud demand in the region.
Sources
- Energy purchase agreement between Digital Realty and Current Hydro: 500 GWh/year from New Cumberland (19.99 MW), Pike Island (19.99 MW), and Robert C. Byrd (28.5 MW); delivery via PJM to Northern Virginia; operational starting 2029.
- Statements by Jeremy King (CEO, Current Hydro) and Aaron Binkley (VP of Sustainability, Digital Realty) on renewable baseload energy and local benefits.
- Reference cases: previous hydro agreement by Digital Realty in Germany; Digital Edge (Philippines), Iron Mountain (U.S.), and Aruba (Italy) with hydro supplies; 3 GW Google deal with Brookfield (initial contracts at Holtwood and Safe Harbor, PA, over 670 MW, 20-year commitments); 13.4 MW solar deal in Illinois with Soltage; Digital Realty’s participation in 24/7 programs in Sweden and France (February 2025).