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Tech industry takes vast lead in green energy spending, biggest companies vie for top spot

Big tech has doubled down on clean power contracts as the sector seeks to dodge energy costs and meet climate goals

Companies in the tech industry have contracted more renewable energy across 2022 than any other sector in a year that saw record investment in clean power, according to a new report. 

326 companies invested in 77 gigawatts (GW) of domestic clean energy throughout the year, enough to power more than one thousand data centres and worth more than $55 billion (£44.6 billion) in capital investment.

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The tech sector alone accounted for 48% of all wind and solar power totalling 36.8 GW, with the energy industry coming in second at just 6.7 GW, according to the American Clean Power Association's figures.

Tech giants Amazon, Meta, and Google have contracted the most of all companies in the sector. By the end of 2022, the companies had contracted 12.4 GW, 8.7 GW, and 6.2 GW respectively.

Over half of the contracted power is not yet operational. But 36 GW, equivalent to 16% of all renewable power operating in the US, now stems from corporate funding as companies look to decrease carbon impact across their supply chains and invest in renewables for long-term stability.

Large tech firms have typically chosen to invest in clean power contracts close to locations of important operations such as offices, warehouses or data centres.

Those with more operations centres have invested in more geographically-diverse projects, with only Meta, Amazon, Google, Microsoft, Verizon, and Walmart having started projects in ten or more states.

Meta’s contracted projects, for example, have been built in close proximity to its regional data centres which make up much of the company’s annual energy demand. Each Meta clean power project across 22 states operates on the same grid as a Meta data centre, apart from its planned centre in Kuna, Idaho.

The location of clean power projects is largely influenced by power purchase agreements (PPAs) - the most popular mechanism used by companies to purchase renewable energy.

These see a company agree to purchase energy from a generator that owns and operates a project at a set price, rather than a utility company. Companies obtain renewable energy credits which add to their sustainability records.

Texas, for example, accounts for 35% of all corporate clean energy contracts partly because the state is well-situated for both solar and wind power, but also because of relatively cheap PPAs with The Electric Reliability Council of Texas (ERCOT).

Green energy keeps data centres affordable

Analysts say that businesses are increasingly betting on sustainability to tackle disruption, and contracting power generation is key to this long-term investment.

In 2022, Gartner warned that the energy crisis will hit data centre budgets by 40% or more. Tiny Haynes, senior research director at Gartner, told the IT Pro Podcast that prices could remain volatile for years.

Renewable energy is cheaper to generate than it has ever been thanks to investment in wind and solar technology, and is already being embraced by companies seeking to slash their energy bills.

Firms are more aware of the cost of sticking with fossil fuels than ever, especially after the scare of rising fossil fuel prices driven by Russia’s invasion of Ukraine.

Corporate investment has turned to solar over wind power, as firms look to shore up utility-scale energy security with 14.4 GW of procurement in 2022. 58% (45 GW) of corporate contracted renewable energy is in solar, though only 28% of this is currently in operation.

Amazon has an official target of running on 100% renewable energy by 2030, though claims it is set to reach this goal by 2025. Google has committed to operations on “24/7 carbon-free energy” by 2030, while Meta targets [PDF] net-zero greenhouse gas emissions across its "value chain" by 2030.

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