Microsoft is adding another 475 megawatts to its already substantial renewable energy-powered portfolio to supply the data center’s growing energy appetite. The company recently signed a deal with AES energy provider for three Midwest solar projects, one in Illinois, Michigan and Missouri.
The ramp up reflects the immediacy of Microsoft’s needs. When it comes to powering data centers, it is difficult to discuss with solar. Easy, inexpensive, modular installations are quick and perfect for high-tech companies that currently require power.
Microsoft taps solar with some degree of regularity. In February, he signed 389 megawatts from three solar projects in Illinois and Texas. And late last year, the company announced that it would lock its $9 billion renewable power alliance hosted by Acadia. The Redmond-based company’s own renewable portfolio already includes capacity of over 34 GW.
While tech companies have been gaining interest in nuclear power over the last few months, the cost and speed benefits of renewable energy continue to flow through solar power.
Renewable power itself is not as consistent as nuclear and natural gas, but developers pair it with battery storage to provide 24 hours a day.
This combination is more expensive in itself than solar and wind, but as the costs of both solar and battery drop rapidly, so-called hybrid power plants are beginning to invade the prices of new natural gas production capabilities.
So far, new nuclear prices remained significantly higher than renewable energy or natural gas power plants.
Time is extremely important for high-tech companies and data center developers. Demand for new computing power is growing at such a rate that by 2027, up to half of all new AI servers may be short of. Most new natural gas and nuclear power plants are not scheduled to be online until a few years later.
However, renewable energy can start to power quickly, and utility-scale solar projects begin to produce electrons in about 18 months.
Its speed has proven attractive, leading to several large transactions. For example, Microsoft signed a contract with Brookfield asset management last summer for its 10.5 gigawatt renewable capabilities in the US and Europe. All of these will be available by 2030.
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