Why Tech Giants Became Biggest Clean Energy Buyers?

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Summary

• As awareness slowly drives up the demand for renewable energy and technology, companies are taking note and changing their game plan.
• International tech giants like Amazon, Apple, Google, Microsoft Corporation and Facebook have immersed themselves in the clean energy business over the last few years.
• Studies show that the five tech giants named above record a combined electricity usage of more than 45 terawatt-hours a year.

While some continue to deny the existence of climate change, people in general are becoming more aware of the impact of their actions on planet Earth. Not everyone is changing, but a general shift towards environment-friendly practices can be noted. Major governments around the world are changing their laws, practices such as recycling are becoming more common, and the use of clean power is gaining momentum.

As this awareness slowly drives up the demand for renewable energy and technology, companies are taking notice and changing their game too. And one of the top sectors that is aligning to this shift is tech.

International tech giants like Amazon Inc (NASDAQ:AMZN), Apple Inc (NASDAQ:APPL), Google (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT) and Facebook (NASDAQ:FB) have immersed themselves in the clean energy business over the last few years.

Why is that? Let’s find out.

Biggest Corporate Buyers of Renewable Energy

Let’s roll back down to the basics here. Gadgets run on electricity. The more gadgets there are, the more electricity they will require. And when it comes to a tech company, there is the requirement of powering data centres, cooling server systems, etc. Hence, their power consumption is generally massive.

Studies show that the five tech giants named above record a combined electricity usage of more than 45 terawatt-hours a year.

©Kalkine Group 2021

That’s not all. With the pace at which technology and its demand is advancing globally, its power usage is only likely to grow further. A 2015 research by Information and Communications Technology (ICT) academic Anders Andrae predicted that the sector could alone be contributing to 20 per cent of all electricity consumption by the year 2030.

The tech giants realized this quite early in the game, although fingers were already being raised at how much electricity they were burning through on a daily basis.

Let’s take a look at the major renewable energy commitments tech juggernauts signed up for in the last few years.

Google

Around 2010, Google took the first big step towards green power by signing its first large-scale, long-term power purchase agreement (PPA). As it entered more PPAs over the years, the company turned carbon neutral in 2007 and 100 per cent renewable energy dependent in 2017, as per its 2019 blog.

©Kalkine Group 2021

Microsoft Corporation

Microsoft weaned off of carbon emissions completely in 2012, as per a 2019 market announcement, via a mixture of PPAs and renewable energy certificates (RECs). It plans to be 100 per cent clean energy powered by 2025 without the help of financial instruments, and carbon negative by 2030.

Amazon

Amazon is said to have invested in 18 utility-scale wind and solar energy projects in the US that will deliver over 4.6 million megawatt hours of renewable energy in a year. It plans to be completely powered by clean energy by 2030 and achieve net zero carbon emission by 2040, as per an October 2019 market announcement.

Apple

The smartphone maker achieved 100 per cent clean energy dependence by April 2018 and has encouraged 23 of its suppliers to take a similar initiative, as per its 2018 market announcement.

Facebook

While late to the clean energy movement, Facebook quickly caught up to commit to renewable energy and carbon emission reduction as it entered PPAs for wind energy in Texas and solar energy in other parts of the US in 2019.

While the cause may have been for the greater good, the goal of signing more clean energy and climate-oriented deal quickly became a competition among the tech giants. At the same time, their involvement in the renewable sector saw the fossil fuel industry lose its shine.

The Big Tech also seems to be pushing the idea that switching to clean energy and adopting other practices such as carbon capture, etc. will solve the climate change crisis – a point that has bee contended by many activists. Whether planet Earth will live long enough to see who is right remains the question.