Register by Friday to get the best rate for VERGE, our climate tech event Oct. 29-31.

Article Top Ad

Microsoft signs its biggest renewable energy contract yet

Deal with Brookfield will add 10.5 gigawatts of wind and solar in the U.S. and Europe between 2026 and 2030. Read More

(Updated on July 24, 2024)

Microsoft is building its data center capacity to support artificial intelligence services

Microsoft will almost double its renewable energy capacity through a five-year deal with Brookfield Asset Management and Brookfield Renewable that will add more than 10.5 gigawatts of solar, wind and other “carbon-free” energy sources in Europe and the U.S.

The value of the contract is estimated at more than $10 billion based on current market conditions, according to news reports, although that amount was not officially disclosed. The transaction is more than eight times the size of any publicly disclosed power purchase agreement (PPA) to date, Microsoft and Brookfield said in a joint statement. For perspective, the U.S. installed about 20.8 gigawatts of utility-scale solar power in 2023.

Companies use PPAs to procure the output of new solar or wind installations, which increases the amount of renewable energy available on the electricity grid and allows them to claim emissions reductions. In 2023, corporations announced contracts for 46 gigawatts of solar and wind capacity, an increase of 12 percent over the previous year, according to BloombergNEF research. The top five buyers last year were Amazon, Meta, LyondellBasell, Google and Tatas Steel. Microsoft was in the top 10.

Powering energy-hungry data centers

As of August, Microsoft had signed contracts for 13.5 gigawatts of solar and wind power in 16 markets. The software developer has already contracted with Brookfield, one of the world’s largest renewables developers, for about 1 gigawatt of renewable electricity outside this contract.

The deal will support the buildout of data centers that will power artificial intelligence and other cloud computer services. Futurists have been sounding the alarm about the electricity required to train AI algorithms or run generative AI services. Right now, data centers account for roughly 2 to 3 percent of global annual power consumption, but Boston Consulting Group predicts that could triple by 2030.

While the deal focuses on new projects in the U.S. and Europe, it leaves open the possibility of expansion to other regions, including Asia Pacific, India and Latin America. It also could apply not just to solar and wind projects, but also to “new or impactful carbon-free energy generation technologies.”

The company previously signed a unique, long-term relationship with Qcells that will supply Microsoft with enough solar panels to build out 12 gigawatts of solar projects over the next eight years.    

Trellis Daily

Subscribe to Trellis Briefing

Now, more than ever, sustainability teams are working in tandem with functions across their organizations.
Coming up



Article Sidebar 1 Ad
Article Sidebar 2 Ad