- Amazon.com Inc AMZN planned to announce commitments to buy 1.5 gigawatts of production capacity from 14 new global solar and wind plants to purchase enough renewable energy to cover every company activity by 2025, the Wall Street Journal reported.
- Amazon, Alphabet Inc’s GOOG GOOGL, Google, Facebook Inc FB, and Microsoft Corp MSFT are four of the top six corporate buyers of publicly disclosed renewable-energy- purchase agreements, accounting for 30%, or 25.7 gigawatts, of the cumulative total from corporations globally.
- Amazon is the largest global corporate purchaser with other top purchasers, including the French oil company TotalEnergies SE TTE and AT&T Inc T.
- The projects come with a colossal upfront investment that takes years to recover.
- The scale of the investments is pressurizing the tech companies to prove that the projects add new renewable capacity to the energy grid instead of sucking up pre-existing supply.
- A thorny issue is whether the green-power purchases reduce the carbon footprint or increase power generation to feed growing global energy consumption.
- Now, Microsoft is analyzing power grids to determine the locations and times when additional renewable-energy production will replace the most output from existing fossil-fuel-powered plants to decide where to invest.
- Amazon’s latest projects, across seven U.S. states, Canada, Finland, and Spain, have pushed the firm’s signed commitments to a total of 10 gigawatts of renewable production. The new plants, which will power Amazon’s cloud-services arm, Amazon Web Services, are scheduled to come online in the next one to three years.
- Google is attempting to ensure sufficient carbon-free energy on electrical grids where it operates using power, including at night and at times of peak demand.
- Data centers were estimated to account for roughly 1% of global electricity use, according to a 2020 journal Science paper.
- According to developers, big tech companies have built up in-house teams staffed with former deal makers at electrical utilities to source deals directly with providers. Firms like Amazon often blanket a country where they have operations with requests for energy projects.
- Big tech’s demand has fueled demand for power-purchase agreements (PPAs) from other corporate buyers due to banking finance constraints as per wind- and solar-energy project developers.
- Facebook reportedly accomplished its carbon-neutral goal in 2020. However, it continues to strike new power deals due to growing energy usage. Facebook’s electricity use rose 39% in 2020.
- Microsoft’s undisclosed power deals are estimated to catapult it to near the top of the biggest global green-energy buyers as per the company.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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