Equipment Related to Power Purchase Agreements and Fuel Delivered to Customers, net

6 Months Ended

Jun. 30, 2021

Equipment Related to Power Purchase Agreements and Fuel Delivered to Customers, net

Equipment Related to Power Purchase Agreements and Fuel Delivered to Customers, net

6. Equipment Related to Power Purchase Agreements and Fuel Delivered to Customers, net

Equipment related to power purchase agreements and fuel delivered to customers, net at June 30, 2021 and December 31, 2020 consisted of the following (in thousands):

	June 30,		December 31,
	2021		2020
Equipment related to power purchase agreements and fuel delivered to customers	$	97,547	$	92,736
Less: accumulated depreciation		(18,629)		(16,929)
Equipment related to power purchase agreements and fuel delivered to customers, net		78,918		75,807

As of June 30, 2021, the Company had deployed long-lived assets at customer sites that had associated Power Purchase Agreements (“PPAs”). These PPAs expire over the next one to ten years. PPAs contain termination clauses with associated penalties, the amount of which cause the likelihood of cancellation to be remote.

Depreciation expense was $2.0 million and $2.2 million for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense was $3.8 million and $4.3 million for the six months ended June 30, 2021 and 2020, respectively.

The Company terminated its contractual relationship with a fuel provider effective March 31, 2021. The Company has historically leased fuel tanks from this provider.  As a result of this termination, the Company recognized various costs, primarily for removal of tanks, reimbursement of unamortized installation costs, costs to temporarily provide customers with fuel during the transition period, and certain other contract settlement costs. These costs amounted to approximately $16.0 million for the six months ended June 30, 2021, which are recorded in the Company’s unaudited interim condensed consolidated statement of operations as cost of revenue – fuel delivered to customers for the six months ended June 30, 2021. The Company also purchased certain fuel tanks from the fuel provider during the three months ended June 30, 2021.