Big Tech drove report clear power purchases in 2021

Tech firms drove a surge in company purchases of fresh power final 12 months, in line with a brand new analysis by BloombergNEF.

Overall, firms purchased a report 31.1 GW of fresh power in 2021, equal to greater than 10 % of all new renewable power capability added worldwide that 12 months. Over half of the ability buy agreements for clear power made by firms have been signed by tech giants, together with Amazon, Microsoft, Meta, and Google.

Agreements with utilities or builders to buy sufficient clear energy to match annual electrical energy use are one technique that firms use to assert they’re operating their operations on 100% clear power. In actuality, that clear power often isn’t flowing straight into company places of work and factories 24/7 as a result of the grids they’re hooked as much as may not have sufficient renewables on-line but. In different phrases, most energy buy agreements that American firms signal are thought-about “virtual.”

“Companies like Google and Apple and Microsoft and Meta, they’re the pioneers of the virtual power purchase agreement as we know it today,” Kyle Harrison, head of sustainability analysis at BloombergNEF, tells The Verge. Still, there’s extra progress tech firms have to make to wash up their operations.

Data on Google’s energy buy agreements final 12 months highlights an rising development that would assist firms scale back their air pollution whereas probably getting extra carbon-free power onto energy grids. Google was once the highest company purchaser of fresh power however has fallen behind Amazon, Microsoft, Meta, and a pair different firms exterior of tech. That’s as a result of Google is pioneering a brand new technique for assembly its environmental objectives that includes matching its electrical energy wants with clear power on a round the clock foundation, in line with the BloombergNEF report. To accomplish that, it’s searching for totally different sorts of renewable power investments and contracts apart from conventional energy buy agreements.

Google first introduced plans to acquire clear power for its knowledge facilities and campuses on a 24/7 foundation by the tip of the last decade in 2020. Doing so includes investing in new applied sciences, pushing for “smart policy,” and bringing new sources of fresh power on-line. For instance, in May, Google signed a deal with startup Fervo to develop a brand new geothermal undertaking in Nevada that ought to ultimately feed energy to the native grid that serves Google’s knowledge facilities. While photo voltaic and wind are nonetheless the sources of fresh electrical energy most wanted by firms, the shift towards 24/7 clear power objectives is prone to improve demand for different kinds of carbon-free power that don’t fluctuate a lot relying on the climate — like geothermal, hydropower, and nuclear power.

Last 12 months, Microsoft introduced the same purpose of matching its electrical energy use with renewable power on a 24/7 foundation. It nonetheless depends closely on energy buy agreements, though Microsoft instructed The Verge final 12 months that it was beginning to change its agreements in an effort to convey extra clear power to native grids the place it operates. The firm was the second-biggest company purchaser of fresh power in 2021.

Amazon, which has but to make a 24/7 clear power matching dedication, narrowly beat out Microsoft to carry onto the highest company clear power purchaser spot for the second 12 months in a row. Amazon’s clear power portfolio is now the twelfth largest amongst every kind of firms globally, in line with BloombergNEF.

Companies exterior of tech haven’t been transitioning to wash power with as a lot enthusiasm. While the whole renewable power bought by firms in 2021 was nearly 24 % larger than the earlier 12 months, the general variety of firms making clear power purchases truly shrank.

“This dominance by tech, it’s kind of also a testament to the fact that this market hasn’t expanded into other sectors as fast as you would have hoped,” Harrison says.