Microsoft plans to build zero-carbon data centers in Sweden. Facebook is investing in a massive solar farm in Texas. And Google uses seawater from the Gulf of Finland to cool its Hamina servers.
Technology companies are ramping up their efforts to shift from fossil fuels, spurring renewable energy demand globally, amid mounting concerns that their powerful data centers are spewing carbon dioxide. The industry is under pressure from socially conscious consumers who are increasingly asking it to deliver on do-good promises and to align operations with international climate goals.
“These are customer-facing companies, and their customers care about the environment,” says Jon Koomey, an expert in energy and environmental effects of information technology and a special advisor to the chief scientist of Rocky Mountain Institute. Data centers are highly profitable, so addressing customers’ concerns is a priority, he says.
Big tech’s push to make clean energy commitments and affect wider change in the industry also dovetails with its penchant to be seen as a positive force in the world, says Matthew Chester, energy analyst for Chester Energy and Policy in Washington, DC
“Going green, in whatever way they do, is seen as a great PR move, a beneficial financial decision, and simply the right thing to do,” he said.
The stakes are high. Global emissions reached record levels last year, rising 2.7% from a year before, according to estimates by Global Carbon Project. The rapid growth in low-carbon technologies has not been sufficient to drive emissions down enough to avoid the worst impacts of climate change, the group said.
Racing against time, scores of corporations have made pledges to switch to renewable energy in the past decade. RE100, a global initiative to use 100% green electricity, counts 179 companies among its members, including Apple, Google and Microsoft. The tech industry has become the top corporate buyer of green energy, signing deals for 10.4 gigawatts as of last year, according to Bloomberg NEF.
The trend, which has fueled investments in solar and wind technologies and driven down green energy prices, is also creating opportunities for smaller players to embrace the renewables.
“Companies like Google, Microsoft, etc. are so huge that they have the sole ability to affect change in the market,” Chester said. “So in that way, any push they make in this regard is a win globally.”
Earlier this week, LevelTen Energy, a Seattle-based startup that allows companies of all sizes to buy clean energy online, raised $20.5 million in a Series B funding for expansion in the U.S. and Europe. Companies have procured over $1 billion worth of renewable energy through the LevelTen marketplace. They include Starbucks, which this month closed on a three-project portfolio, comprising wind and solar farms in North Carolina, Oklahoma and Texas.
In January, LevelTen helped Bloomberg, Salesforce, Gap Inc., Cox Enterprises, and Workday collectively purchase 42.5 megawatts of a 100-megawatt North Carolina solar project.
The soaring demand for cloud and Internet services has led to an explosion of data centers around the world. They consume up to 3% of global electricity, while emitting as much C02 as the airline industry. Meanwhile, the number of Internet-connected devices is expected to grow from almost 27 billion in 2017 to 125 billion in 2030, according to IHS Markit.
To meet their sustainable energy goals, tech companies sign standard power industry, long-term contracts known as Power Purchase Agreements (PPAs), to source electricity from major wind farms and solar projects. In the latest example, Microsoft this month agreed to buy 90 megawatts from the Eneco-developed offshore wind project in the Dutch North Sea, bringing its total clean energy portfolio to more than 1.5 gigawatts.
This strategy creates “more impact” than other methods, such as bundled renewable energy credits, because it spurs construction of green energy projects, according to Neha Palmer, Google’s director of operations, energy and location strategy.
Last year, the search engine giant met its 100% renewable energy target for the second year running, thanks to several PPA-driven projects, including wind farms in Scandinavia, dozens of wind turbines in Oklahoma, and more than 120,000 solar panels in the Netherlands.
Google also has partnered with several Dutch companies to buy renewables as a consortium, encouraging other small players to band together and save costs on larger deals.
“We want to make it simple for any business — be it a flower shop, retailer, or startup — to buy cheap renewable energy,” Palmer wrote in a blog post. “Though clean energy now makes economic sense across much of the globe, it remains difficult for many companies to access.”
Meanwhile, Facebook is investing in a solar farm in West Texas, expected to have capacity of 379 megawatts, enough to power up to 300,000 homes. The company has committedto cutting its greenhouse emissions by 75% percent and reaching 100% renewable energy in 2020.
Tech giants’ focus on renewables is also boosting the industry of smaller green solution providers, such as EcoDataCenter, a self-described “world’s first climate-positive data center” in Falun, Sweden.
“It is important that the market leaders are in the frontline in terms of sustainability,” which creates more awareness and drives demand, says the CEO of EcoDataCenter, Lars Schedin. “We can never compete with companies like Microsoft or Google. If the large players get 90% of the market volume, we and our competitors are happy to share the remaining 10%.”
Big data center owners like Google Cloud Platform and Amazon Web Services are increasingly building heat-emitting hubs in colder climates of Nordic regions, harnessing everything from arctic winds to frigid seawater of Gulf of Finland.
Seeking to offset environmental impact, many companies now redirect excess “IT heat” to local heating systems to warm people’s homes. A data center from Microsoft of 300 megawatts, for example, could heat about 150,000 homes.
“I truly hope this will become one of the development areas for our industry going forward,” said Schedin from EcoDataCenter, which recycles waste heat in a nearby wood pellets factory and in the local heating system during the winters. “If not, the heat ‘thrown out of the window’ from a datacenter is also adding to the greenhouse effect, increasing the temperature.”
Microsoft last month unveiled plans to build “the most sustainably designed” data centers in Sweden, powered by renewable energy sources targeting zero-waste operations. The country is also home to a newly opened AWS cloud computing facility in Stockholm as well as Facebook’s data center campus in Lulea.
“It’s great to see that these tech companies are feeding off of each other and pushing each other to be better,” Chester said. “Are they doing enough? Perhaps not yet, but they are doing more than other industries, and they’ll continue to be leaders.”
Anastasia Ustinova is a freelance business writer based in Seattle with more than 10 years of experience reporting around the world. Her stories were featured in Bloomberg News, Businessweek, the San Francisco Chronicle and the Houston Chronicle.