Microsoft will power its data centers in Virginia with 24/7 clean energy through a 15-year agreement with AES Corporation.
The partnership supports Microsoft's goal of matching 100% of its electricity consumption with zero carbon energy purchases by 2030.
"By leveraging AES' capability and presence in the PJM market, we are able to both secure additional renewable supply in support of meeting our commitment to use 100% renewable energy by 2025, and also take a meaningful step toward having 100% of our electricity matched by zero-carbon resources all of the time in the region," said Brian Janous, General Manager Energy & Renewables at Microsoft. "We believe innovative commercial structures like this with AES and integrating new technologies will be key as we continue to move toward our 100/100/0 commitment."
AES will source the energy from a portfolio of 576 MW of contracted renewable assets, including wind, solar, as well as battery energy storage projects in PJM.
"Microsoft is a leader in the energy transition with its commitment to being 100% powered by zero-carbon electricity by 2030. We're proud of the solution we co-created with Microsoft to help meet that commitment with the delivery of 24/7 zero-carbon electricity to its Virginia-based data centers," said Andrés Gluski, AES President and CEO. "Working together with leading corporations, we are setting new standards for decarbonizing their operations and the grid."
By matching energy consumption with clean energy produced elsewhere on the grid, power purchase agreements have allowed corporations to take action to address the current and future risks posed by climate change.
But, in some cases, there's an opportunity to go beyond the PPA, and more effectively decarbonize the grid through hourly load matching, or 24/7 matching, according to an analysis by RMI. RMI defines hourly load matching as "where a buyer attempts to procure sufficient carbon-free energy to match a given facility's load in every hour."
The findings of the "Clean Power by the Hour" determined: costs increased with the level of hourly load matching compared to costs for meeting annual procurement targets, near-term emissions reductions for hourly load matching depend on the regional grid mix, and hourly procurement strategies can create new markets for emerging technologies.
"Overall, we find that hourly load-matching strategies can help lay the groundwork for a decarbonized grid in the long term but should be carefully tailored to region-specific grid dynamics to also maximize emissions reductions in the near term," RMI authors wrote in the report. "Buyers who have not yet offset 100% of their annual electricity use with procured (carbon-free energy) can feel confident that doing so based on annual targets in regions with low renewable energy adoption will continue to create material climate benefits. This can be done even as buyers who have already met that goal continue to push the envelope of sophistication and pave the way toward a 100% CFE grid."