The rapid expansion of AI infrastructure, cloud computing, and hyperscale data center development is increasing pressure on data center operators to secure reliable electricity while advancing sustainability objectives. Against this backdrop, renewable energy credits (RECs) have emerged as an advantageous instrument, among other renewable energy strategies.
In a recent article for Reuters, partner Levi McAllister discusses how RECs are being used as a key tool to address the growing carbon footprint of data centers amid rising electricity demand. The article also examines how RECs may be used alongside broader renewable energy procurement strategies, including power purchase agreements, utility green tariff programs, and bundled or unbundled renewable energy transactions.
As energy demands continue to rise, sustainability considerations are becoming more closely integrated into commercial contracting, infrastructure planning, and public reporting. Companies developing, operating, or relying on data centers should pay close attention to how agreements address ownership of RECs, timing of transfer, retirement obligations, emissions reporting, and the substantiation of environmental claims.
These issues are likely to remain important in negotiations as organizations balance operational growth with evolving ESG, disclosure, and decarbonization priorities.
Legal practice assistant Alyssa Yocum contributed to this blog post.