Saving the planet – Microsoft and Brookfield
Earlier this month, Microsoft and Brookfield Renewables agreed the “largest ever corporate renewable energy deal”, as described by both companies: a 5-year power purchase agreement (PPA) that will support the construction of 10.5 GW of new clean energy in the US and Europe. This deal is a key component in Microsoft’s “100/100/0” clean energy goal: having 100% of its electricity consumption, 100% of the time, matched by clean energy supplies, by the year 2030.
However, let us ask the following questions:
What price is Microsoft paying for its electricity under this deal – and how does this price compare with the current forward price in the relevant wholesale market? (“Relevant” because this question may be asked separately in each jurisdiction.)
If Microsoft is getting a good price (or set of good prices, one in each relevant market), does that not mean that the new renewable energy is competitive – and hence would probably be developed anyway?
What government-backed support mechanisms are available to the new projects in the deal (e.g. support under the Inflation Reduction Act in the US, Contracts for Difference in the UK and Ireland, Germany’s renewable energy levy, etc.)? Apart from financial support, there may be support in terms of planning permission, relevant permits, etc. Can Microsoft produce a table ranking the countries involved in terms of the level of government subsidy paid to Microsoft?
If public support for the new projects is available, would it not be reasonable to attribute some of the reduction in emissions (vis-à-vis normal grid supplies) to the general public rather than all of it to the offtaker – in this case Microsoft?
What is the increase in electricity consumption by Microsoft associated with this deal?
What would be the measured increase in carbon emissions, associated with this electricity consumption, if only a fraction of the new clean energy is attributed to Microsoft and the remainder is socialised, pursuant to Q4? Or if none of it is attributed to Microsoft, pursuant to Q2?
How might the answers to questions 5 and 6 affect the measurement of progress towards Microsoft’s 100/100/0 goal?
What emissions are associated with the new infrastructure and hardware (e.g. data centres, cables, hardware) that Microsoft may construct in relation to the power supplies in this new deal?
If these embodied emissions are also taken into account, how does the measurement of progress compare with the 100/100/0 goal?
What efforts are being made to reduce Microsoft’s demand for electricity? Can these efforts be quantified – including, specifically, efforts to make Microsoft’s AI algorithms as efficient as possible so that they are using the least amount of server energy?
Perhaps Microsoft (or Brookfield) has good answers to these questions. If so, we should hear them.