Tech companies are using their balance sheets to finance solar, wind and other renewable-energy projects on an unprecedented scale. In some countries, developers say the willingness of tech companies to sign off on commitments to buy energy at a fixed price for a longer period of time—has made corporations more important than government subsidies as the main drivers of renewable investment. have helped.

amazon, alphabet Inc. of

google, facebook Inc.

and microsoft Corporation

Four of the top six corporate buyers of publicly disclosed renewable-energy-purchase agreements account for 30%, or 25.7 GW, of their cumulative total from corporations globally, according to research firm BloombergNEF. Amazon is the largest corporate buyer worldwide, with other top buyers including French oil company TotalEnergies SE and AT&T. Inc.

“It’s almost like a stampede for clean energy,” said Michael Terrell, energy director at Google.

The scale of these investments is putting tech companies under pressure to show that the projects actually add new renewable capacity to the energy grid rather than sucking up already existing supply. A thorny issue is whether tech companies’ green-power purchases replace electricity generated from carbon-emitting plants or increase electricity production to feed rising global energy consumption. This is important because companies want to tell consumers and investors that they are helping to reduce carbon production, not just turning it around.

“Just because you put a clean electron on the grid doesn’t mean you’re displacing a carbon-based electron,” said Brian Janus, general manager of energy and renewable energy at Microsoft. Mr Janaus said Microsoft is now analyzing the power grid to determine which locations and days of additional renewable-energy generation will replace most generation from existing fossil-fuel-powered plants to determine Know where to invest.

Amazon’s latest projects in seven US states as well as Canada, Finland and Spain push the firm’s signed commitments to a total of 10 gigawatts of renewable generation, the company said. Following the new deals, Amazon is the top corporate buyer of clean energy in the US, according to the Renewable Energy Buyers Alliance, a group of companies promoting renewable energy purchases. The new plants, which will supply Amazon Web Services, Amazon’s cloud-services arm, are due to come online in the next one to three years.

Nat Sahlstrom, director of energy at Amazon Web Services, said the company looks for projects where it may be the first to set up a commercial template other companies can follow to help jump-start demand. . He added that Amazon only selects projects based on whether its purchase commitment is critical to the projects’ viability. “If it was not for our investments in these projects, they would not have progressed,” he said.

Google, which said it has matched its energy consumption with renewables starting in 2017, says it now has a tougher goal: to align its consumption with renewable energy not only annually but hour by hour. . That means the company is trying to make sure there is enough carbon-free energy on the electric grid to function when it is using electricity, including at night and during times of peak demand. also includes.

“I think growth has to be focused not only on quantity but also on quality of sourcing,” said Mr. Terrell of Google.

Promoting purchases is skyrocketing data usage and computer processing. According to the International Energy Agency, over the past decade, increasing efficiency has largely offset increased use, as companies have moved from on-premises computer servers to more efficient cloud providers. But while there’s more efficiency to tap into, according to researchers, it’s not clear why, especially with the rise of 5G networks and more of the world’s more people living and working online.

“The data-center industry is one of the largest electricity consumers worldwide,” said Stefan-Jörg Gobel, senior vice president of wind and solar for Norwegian energy company Statkraft AS. “They are changing the demand side of the industry with the pure physics of it.”

The data centers were estimated About 1% of global electricity use, according to a 2020 paper in the journal Science.

Big tech companies say they have built in-house teams with former deal makers in electric utilities who can negotiate deals directly with providers, often bypassing an industry of middlemen and brokers that typically Handles electricity deals. According to developers, firms like Amazon often blanket a country they have operations in with requests for energy projects.

“We would say, hey, we want to look at every potential project that could be in development in a country,” said Amazon’s Mr. Sahlstrom of his team that is looking for power-purchase agreements, or PPAs.

Developers of wind and solar power projects say that the demand for big tech has spurred a rise in demand for PPAs from other corporate buyers. Because projects require huge upfront investments that take years to recoup, banks often won’t finance them – or offer less favorable terms – unless the projects have an anchor buyer, which is a great deal for developers and energy. Promises to buy most or all of the production according to financier

In Spain, where Amazon has committed to buying power from five solar plants, developers say several big tech companies are looking for new deals.

“We are talking to all of them,” said Martin Scharer, who leads such conversations for renewable-energy producer Enkevis. AG

About tech companies. Mr. Sharer previously inked a deal with Amazon to sell energy from a solar plant outside Seville, Spain.

Facebook said last year it had reached its goal of buying enough renewable energy to cover its global operations, including data centers, but it continues to strike new power deals as its energy use soars. According to Facebook’s annual sustainability report, electricity usage grew by 39% in 2020. “This is showing that voluntary targets are really driving the market,” said Urvi Parekh, director of renewable energy at Facebook.

Microsoft said it has power-buying deals it has yet to announce that will propel it to the top of the world’s biggest green-energy buyers. Mr Janaus said his company focuses on shared environmental goals rather than rankings, but added: “We know what rankings are and, trust me, my boss knows what rankings are, and whenever If someone new comes, I’ll hear about it.”

https://www.wsj.com/amp/articles/amazon-and-other-tech-giants-race-to-buy-up-renewable-energy-11624438894