Microsoft Takes A Major Leap Towards Sustainability: Signs Biggest-Ever Clean And Green Energy Deal – Check Details (image source: Today Technology Market ResearchDigital)
Microsoft Corp. and Brookfield Asset Management’s green energy arm have inked a historic agreement, marking the largest corporate clean-energy purchase ever announced. This move comes as Microsoft intensifies its investments in artificial intelligence (AI)., Bloomberg reported.
Renewable Energy Capacity
Brookfield Renewable Partners will supply over 10.5 gigawatts of renewable energy capacity in the US and Europe from 2026 onwards, as per a statement released on Wednesday. This capacity is equivalent to about 10 nuclear power plants and underscores the surging demand for electricity from data centres and AI.
Tech Industry‘s Clean Energy Demand
The surge in electricity demand from data centres and AI initiatives is driving technology companies to seek more clean energy to fulfill their climate objectives. This trend coincides with the overall rise in energy demand. Kyle Harrison, an analyst at BloombergNEF, describes the deal as “the largest single announcement for a corporate clean-power purchase agreement ever,” solidifying Microsoft’s position as the second-largest corporate buyer of clean energy through Power Purchase Agreements (PPAs), after Amazon.
Cost Estimates and Growth Forecast
Estimating the cost for 10.5 gigawatts of new capacity is challenging due to variations in development costs across energy types and locations. However, based on BloombergNEF data, if all developments were US solar farms, they would exceed USD 11.5 billion build. The forecast for rapid growth in US power consumption, primarily driven by data centre expansion for AI development and operation, presents a significant challenge for technology companies striving to secure additional power supplies while reducing emissions.
Microsoft’s Climate Goals and AI Investments
Microsoft aims to match all its electricity consumption with zero-carbon energy purchases by 2030. The company is channeling substantial investments into AI development and the necessary data centers to support them. Microsoft views AI as a crucial tool to attract customers for its cloud computing services.
AI tools demand substantial resources to operate, and many companies lack the data center capacity to support large-scale AI operations. Consequently, they turn to major tech firms like Microsoft, Google, and Amazon for assistance in running AI programs on the cloud.
Financial Performance and Growth
Microsoft reported a 17 per cent revenue increase in the third quarter, reaching USD 61.9 billion, driven by soaring corporate demand for its cloud and AI offerings. Similarly, Amazon’s cloud unit witnessed robust sales growth, reinforcing the significance of AI and cloud services in the tech industry.
The deal between Microsoft and Brookfield is nearly eight times larger than any other single corporate power-purchase agreement. Additionally, there are plans to expand it to include new renewables capacity in Asia and Latin America. While the focus will primarily be on wind and solar, the agreement will also explore “new or impactful carbon-free energy generation technologies,” according to the companies involved.
