Microsoft, a technology giant, has recently expanded its energy portfolio by adding 389 megawatts of renewable energy to meet the growing power demands of its artificial intelligence initiatives. This new energy supply comes from three solar projects developed by EDP Renewables North America, with two located in southern Illinois and one near Austin, Texas.

By purchasing the electricity generated from these projects, Microsoft supports local operations while obtaining renewable energy certificates to address energy needs in other regions. According to Microsoft's 2024 Sustainability Report, the company has contracted nearly 20 gigawatts of renewable energy capacity, and this acquisition represents an approximately 2% increase in total capacity.

In order to keep pace with the rapid expansion of its cloud services and AI businesses, Microsoft continues to scale up its electricity procurement efforts. Similar to many peers, Microsoft prefers renewable energy due to the short construction timelines and relatively low costs associated with wind and solar power. Solar farms, for example, can begin generating electricity within as little as 18 months after development begins. Developers often plan these projects in phases to ensure timely delivery of power to data centers.

To ensure round-the-clock energy availability, some renewable energy providers are adopting hybrid systems that integrate solar and wind power with one or more types of battery storage. These batteries charge when renewable sources generate excess power and discharge during periods of reduced generation. Last week, Amazon signed a contract with a similar project based in Portugal.

Through its commitment to renewable energy purchases, Microsoft is able to power its core business operations without producing pollution. This move also contributes to Microsoft's pledge to become carbon negative by 2030, which requires the company to remove and store more carbon than it emits.

To achieve carbon negativity, Microsoft is investing in various carbon removal technologies, including direct air capture, enhanced rock weathering, and reforestation. Last month, Microsoft announced an agreement with Chestnut Carbon to purchase over 7 million tons of carbon credits, sufficient to offset about half of Microsoft's emissions in 2023.