Oracle Corporation signs VPPA for majority of Ranchero wind output
Scout says Oracle's VPPA covers a majority of the output from its operating 300 MW Ranchero farm; contracted megawatts, price and start date were not disclosed.
Julian Okafor
A Texas wind contract links an operating farm to a 2035 carbon-free electricity target for AI data centres. Oracle Corporation NYSEORCL, the database and cloud infrastructure supplier, has signed a virtual power purchase agreement for a majority of the output from Scout Clean Energy's 300-megawatt Ranchero Wind Farm, Scout said Wednesday.
Scout Clean Energy, a privately held renewable developer in Brookfield's portfolio, announced the agreement on Oct. 7. Its Ranchero project in Crockett County reached commercial operations in 2019. Scout did not disclose an exact contracted capacity, a start date, the duration or the price of Oracle's agreement.
Oracle shares were at US$144.32, down 0.31 per cent, at 1:52 p.m. EDT Wednesday in the NYSEORCL quote.
The signed Ranchero contract puts a specific farm behind part of Oracle's Sept. 15 Texas wind announcement. Oracle said then it was investing in more than 1.7 gigawatts of generation across 10 projects, with Scout among its suppliers. Those projects feed the Texas grid that powers Oracle's Abilene facility, according to the company, though the earlier release did not identify Ranchero as one of them. Oracle estimated that the group of projects would generate enough electricity each year for more than 525,000 U.S. homes.
Oracle's energy plans accompany a rapid expansion in its cloud business. In its Sept. 10 fiscal first-quarter results, the company reported US$7.4 billion of cloud infrastructure revenue, up 121 per cent from a year earlier. It also said it had delivered an additional 850 megawatts of data-centre capacity during the quarter.
Ranchero Was Operating Before the Agreement
Scout calls Ranchero its largest operating renewable project and says it owns and operates 1,200 megawatts of renewable assets. Ranchero's 300-megawatt capacity describes the whole farm; Scout's estimate that it generates enough electricity annually for 177,000 homes also describes the entire project. Neither measure states how much electricity Oracle has contracted.
"The Ranchero Wind Project supports our goal to match 100 percent of our custom AI data center electricity with carbon-free electricity by 2035, while enabling a more reliable, resilient, and affordable energy system for Texans."
Julia Robin, head of infrastructure planning for Oracle Cloud Infrastructure, said this in Scout's Oct. 7 announcement. The release describes a virtual agreement, which does not identify a physical supply route from Ranchero to an Oracle server building.
The U.S. Environmental Protection Agency explains that a virtual, or financial, power purchase agreement sends the generator's electricity into the grid. The buyer purchases the electricity it physically uses separately, while the contracting parties typically settle the difference between a set contract price and a market price. The agency also says a buyer needs the associated renewable certificates, or their retirement on its behalf, to claim the project's green power.
Scout's release gives no contract price, settlement terms or description of who receives Ranchero's renewable certificates. Nor does it state contracted annual megawatt-hours, a figure that would put "majority of output" into a measurable electricity volume. Those missing terms leave Oracle investors unable to calculate the agreement's payment exposure or verify how this farm counts toward the company's carbon-free matching target from the announcement alone.
Black Hills Names a Late 2027 Service Start
Black Hills Corp. NYSEBKH, a South Dakota utility, gave specific terms for its Wyoming data-centre power agreement in an Oct. 6 release. It said it would provide up to 590 megawatts of grid-connected service and manage output from about 2.1 gigawatts of separately contracted resources. Black Hills expects service to begin in late 2027, while Scout gave no Ranchero VPPA start date.
Read more: Black Hills signs Google power agreements for up to 590 MW in Wyoming
Oracle is also seeking renewable generation in another state. Its Sept. 8 New Mexico request for proposals seeks 2 gigawatts of new projects. Oracle wants them to deliver between 2027 and 2031, tied to a 2031 carbon-free matching target for its planned Project Jupiter site. That request was for bids; Scout's Texas announcement describes a signed agreement for an existing wind farm.
Oracle's Sept. 15 Texas release sets a 2035 goal to match its custom AI data-centre electricity use with carbon-free power. Neither that release nor Scout's Oct. 7 announcement gives a date to disclose Ranchero's contracted output or renewable certificate allocation.
