Microsoft has agreed to support the development of 10.5 gigawatts of new renewable energy worldwide.
Incidentally, 10.5 gigawatts of renewable energy is equivalent to almost half of California’s solar and wind power in 2022. According to BloombergNEF, this is literally a huge deal and is in fact the largest purchase of renewable energy by a company to date. contract. Microsoft signed the deal yesterday with Brookfield Asset Management.
Microsoft is putting a lot of resources into AI products for its customers, including investing more than $13 billion in OpenAI; AI is known to be an energy monster and risks increasing the company’s greenhouse gas emissions as its data centers consume more and more electricity. This is a problem if Microsoft is serious about its commitment to reduce carbon emissions to zero by the end of the decade. More renewable energy needs to be deployed around the world to prevent carbon emissions from rising.
BloombergNEF estimates that it would cost between US$11.5 billion and US$17 billion to increase the renewable energy capacity scheduled to come online between 2026 and 2030. (Microsoft and Brookfield declined to confirm this amount.)
According to Brookfield, the deal will allow it to invest in new renewable energy projects in the US, Europe, Latin America, Asia and the Pacific. Microsoft will buy the electricity generated at each new location.
Microsoft has previously committed to meet 100% of its electricity use with carbon-free energy purchases by 2030. This will not be possible until more wind and solar farms are connected to the grid, and Microsoft will support this with this agreement.
To become carbon negative by the same date, the remaining emissions that cannot be reduced by clean energy will need to be captured. But carbon capture is still too expensive and not yet proven scalable. Solar power has become the cheapest power source in history.
Adrian Anderson, Microsoft’s General Manager for Renewable Energy, Decarbonization and Carbon Removal, said in a press release: “Microsoft wants to use our influence and purchasing power to make a lasting positive impact on all electricity consumers.
As new AI data centers are expected to put pressure on the grid, the grid needs all the additional capacity it can get. According to the International Energy Agency, AI could consume 10 times more electricity in 2026 compared to 2023.
