Microsoft Invests in a Texas Wind Farm

Wednesday, November 6, 2013 @ 09:11 AM
posted by Admin

In a move that underlines the growing appeal of corporate investment in renewable energy, Microsoft announced that it will power one of its data centers with electricity from a Texas wind farm.

The software giant has agreed to buy all of the output from the 110 megawatt (MW) wind farm for 20 years. The project, to be built by RES Americas, will send electricity into a local grid that serves a Microsoft data center in San Antonio. Construction is set to start next year and be completed in 2015.

For businesses that want to cut their carbon emissions, renewable energy might sound like a natural choice. But for years, the more popular option has been for businesses to buy renewable-energy credits associated with renewable-energy-generation projects rather than investing in those projects directly. Buying credits seems easier: it doesn’t require a business to sign long-term power contracts or commit the hefty capital – and time – required to build its own wind or solar-power projects.

ElectricityRates.comBut as the wind and solar markets grow, thanks in large part to federal and state tax breaks and other subsidies, the cost of building and owning renewable-energy projects – along with the price of renewable energy – has steeply declined. The average long-term price for wind power to US utilities plummeted to $40 per megawatt-hour, in 2012 contracts, from $70 per megawatt-hour in 2009, according to Lawrence Berkeley National Laboratory report.

Meanwhile, the marketing benefit of investing in renewables remains strong. Buying wind power or owning wind farms, for example, represents a deeper commitment to fighting climate change than simply buying credits. Both approaches provide the crucial, long-term capital for growing the renewable energy market. In many cases, they also help companies reduce their utility bills and could even generate profits in the long run.

Microsoft, of course, is hardly the first corporation to invest in renewables. Google has been a trend setter, both signing long-term wind-power contracts and investing in building wind and solar farms.

The company buys renewable energy that flows into grids where its data centers are located. It also co-owns renewable energy power plants that sell electricity to utilities, and Google expects to make good returns on those investments. Overall, the company has invested – or agreed to invest – in more than $1 billion worth of wind and solar power projects than collectively exceed 2 gigawatt (GW) of generation capacity.

Aside from signing power purchase agreements, a growing number of businesses also have installed renewable-energy equipment on their own properties to generate power on site. Solar panels’ smaller footprint – they sit atop unused space on roofs instead of requiring a dedicated piece of land like most wind turbines – makes solar appealing for onsite generation and use.

Corporate investment in solar energy, whether via solar-electricity purchases or onsite installations, also is growing: the top 25 corporate solar-electricity users have enabled the installation of more than 455MW of capacity in the US to date, a 48% jump from a year ago, the Solar Energy Industries Association reported last month.

Walmart took the top spot on the list, followed by Costco, Kohl’s, Apple and Ikea. Overall, commercial solar-power projects nationwide reached 3,380MW in the second quarter of this year, up 40% from a year ago, according to the solar industry trade group.


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