Microsoft shells out for 2.5GW of solar. Not that it'll make a big dent in its emissions
Unless it's hooking up all those panels to your PCs and servers
With just seven years left to achieve its 100 percent renewable energy goals, Microsoft said it would add as much as 2.5 gigawatts of solar power to its operations under a partnership with South Korea's Hanwha Qcells.
Microsoft has a massive energy footprint with more than 200 offices and 60 cloud regions; many of these facilities consume tens of millions of watts of power every hour as the racks of servers churn through petabytes of data.
It's not uncommon for a cloud region to have 50MW or 60MW of capacity. And with hotter, higher wattage CPUs and GPUs beginning to hit the market, power consumption in many of these facilities will no doubt increase, as cloud providers, like Microsoft, transition to higher rack densities.
Under the agreement announced today, Microsoft said it would work with Qcells to engineer, procure, and construct solar power installations using power purchase agreements. PPAs are a mechanism for companies and institutions to fund renewable or clean energy production within a region. Under these PPAs, customers agree to buy the power generated by these facilities or installations at a set price over the course of a decade or two.
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Microsoft has used PPAs extensively as it has worked to end its reliance on fossil fuels and other nonrenewable energy sources. However, Microsoft's strategy for offsetting its carbon footprint has evolved over the past few years. In 2012, the Windows titan said it purchased enough renewable energy credits (REC) to offset the greenhouse gas emissions generated by its facilities.
But Redmond later moved away from RECs in favor of PPAs. According to Microsoft, PPAs are preferable because RECs can't reliably guarantee the renewable energy is generated on the same grid as where it's consumed.
As of last November, the software giant claims it has signed PPAs for more than 10 gigawatts of renewable energy capacity including 900MW of capacity for facilities in Ireland.
While Microsoft's plan to end its reliance on non-renewable energy is commendable, it's worth pointing out only a fraction of the mega-corp's greenhouse gas emissions are attributable to either scope 1 or scope 2 sources. Scope 1 being emissions directly resulting from an organization's operations, and scope 2 being emissions a company indirectly causes by having energy produced for it.
In other words, only a fraction of its emissions are directly generated by Microsoft facilities and vehicles, or are generated by the utilities that provide power to them.
According to the corporation's latest sustainability report [PDF], the vast majority of Microsoft's emissions — 13.7 million metric tons of CO2 as of 2021 — are attributable to emissions from the purchase or sale of goods and services, the transportation of those services, and the use of those products over their lifetimes.
While Microsoft says its primary emissions fell 16.9 percent in 2021, the business's overall emissions actually increased almost 23 percent. According to Redmond, this increase was driven by the growth of its cloud services business and a growth in sales. So, it's safe to say the Windows goliath has a long way to go to achieve its goal of going carbon neutral by 2030. ®