by Brad Smith, President and Chief Legal Officer, Microsoft
Our lives, our cities and our world are rapidly transforming with the rise of cloud technology. And as the adoption of the cloud accelerates, so does the electrical consumption of the data centers that fuel this new era. At Microsoft, we recognize that our responsibilities as a leading cloud services provider require that we transform the way we power the cloud.
That’s why we are announcing our largest wind energy purchases yet — 237 megawatts (MW) of wind energy — that will allow our data center in Cheyenne, Wyoming to be powered entirely by wind power. We’ve also structured the purchase and partnered with the local utility in novel ways to make it easier and more affordable for cities and states to move to a cleaner energy grid. And, we’re making our data centers backup generators available to the local grid, boosting reliability while keeping prices low for all ratepayers.
This investment in wind energy keeps us on pace to meet the energy goals we set last spring. We announced earlier this year that roughly 44% of the electricity consumed by Microsoft’s data centers comes from wind, solar and hydropower, and we committed to raising this to 50% by 2018 and to 60% by early in the next decade.
Today’s purchases involve two important partnerships. We have procured 178 MW from the Bloom Wind Project in Kansas through Allianz Risk Transfer (ART) to help bring this new project online. We’ve also partnered with Black Hills Corp. to purchase wind power from the 59 MW Happy Jack and Silver Sage wind farms in Wyoming. The combined output of the Bloom and Happy Jack/Silver Sage projects will produce enough energy on an annual basis to cover the energy used at the data center.
These latest purchases bring Microsoft’s total purchase of wind energy in the US to more than 500 MW, which is in addition to the energy Microsoft purchases from the grid that comes from wind, solar and hydropower sources in the markets where we operate.
Benefits from these latest wind deals extend well beyond Microsoft’s own facilities. They are good for the utilities, the environment and local ratepayers.
Microsoft today becomes the first buyer to participate in ART’s efficient and cost-effective finance structuring of wind generation projects. This structure offers a new model to enable faster adoption of renewables. It does so by lowering costs, reducing risks and improving certainty. By partnering with ART to deliver this new financial deal structure, we hope to help serve as a model that spurs other markets to accelerate the rate at which wind and solar energy projects come online.
Today’s announcement also represents another form of innovation.
Traditionally, when presented with a constraint on the system relating to reliability, load growth or the introduction of intermittent generation, a utility had one option: build new infrastructure, such as new substations, power plants or transmission lines. This ordinarily means higher costs to ratepayers. However, Microsoft envisions a future where it and other customers bring their own assets to utilities, whether new renewables, energy storage or even cloud technologies that optimize customer usage patterns, to help create a lower-cost, more efficient and cleaner energy grid.
In this case, Black Hills Energy was faced with the potential need to build a new plant in Cheyenne. Instead, Microsoft approached Black Hills Energy with an innovative new solution to deliver reliability without additional costs for ratepayers. Microsoft and Black Hills Energy established a new tariff, available to all eligible customers, that lets the utility use our data center’s backup generators as a secondary resource for the entire grid. Unlike traditional backup generators that run on diesel fuel, these natural gas turbines offer a more efficient solution and, more importantly, ensure the utility avoids building a new power plant.
This is a small step toward a future where other customer-sited resources may help make the grid more efficient, reliable and capable of integrating intermittent energy sources like wind and solar. And as we recently demonstrated in our pilot with Agder Energi in Norway, this future will be enabled by the application of cloud technologies that enable utilities to visualize and optimize resources, providing the foundation for a low carbon energy future.
Innovation and sustainability go hand in hand. We’re thinking differently about our data centers and how we can build and operate them in a more sustainable way. And the innovations we’re piloting in this deal are not only good for business, but also good for local communities and the environment as well.
We’re focused on building a cloud that serves the broader good, a cloud that is trusted, inclusive and responsible. That means thinking beyond our own operations and working with partners to accelerate the pace of clean energy and build a greener grid for all, while keeping costs low for customers and ratepayers. By thinking creatively about our energy needs and the assets at our data centers, we’re able to deliver an innovative solution in Wyoming that does just that — and serves as a model from which we all can learn.
As well as purchasing wind power and generating solar power, Microsoft offsets the remainder of its electricity use by purchasing renewable energy credits, meaning that it has already met its RE100 commitment to 100% renewable electricity. Find out more in our interview with Rob Bernard, Microsoft's Chief Environmental Strategist.
For more about its sustainability work, visit Microsoft Environment.