Microsoft Steps up Green Energy Usage at Data Centers

Microsoft plans to power its data centers using 50% renewable energy by 2018

m1Major technology companies including Microsoft Corp. (NASDAQ: MSFT), Alphabet Inc.’s (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Amazon.com Inc. (NASDAQ: AMZN) are going green in a big way and are committed to ramping up renewable energy usage. The availability of clean energy resources is a key consideration in where they locate corporate offices and data centers, in a move designed to save them millions of dollars in long-term energy costs. At the Verge16 Conference at Santa Clara, California, held on September 19th-22nd, 2016, Rob Bernard, Microsoft’s chief environmental & cities strategist, announced that Microsoft plans to power its data centers using 50% renewable energy by 2018. Moreover, the technology giant will also boost its usage of renewable power for its data centers to 60% by the early 2020s.

Earlier on May 19th, 2016, Microsoft said in a blog post that it will step up its commitment to reduce the impact its data centers have on the environment. Currently, roughly 44% of the electricity used by Microsoft’s data centers comes from renewable energy sources.

m2Microsoft’s announcement came after Apple committed to 100% renewable energy use by joining RE100, a global initiative with memberships from 77 corporations, including Microsoft. As more services move to the cloud, online giants are building more data centers to keep up with the shift. Tremendous amounts of energy will be required to power this data-driven revolution. Microsoft has committed to greater transparency of its energy consumption and the mix of power sources that it uses. It will also continue to report its total energy consumption and the impact of its carbon reduction program. Earlier in 2016, Microsoft signed a new deal to bring 20 megawatts of new solar energy onto the grid in Virginia.

Green beginnings

m3Microsoft has powered its global operations, which include manufacturing, licensing, and logistics, on 100% renewable energy since 2014. In 2013, it built a data center next to a Wyoming landfill in order to use its methane gas to power its facility. Microsoft buys renewable energy certificates that reflect investments in renewables, allowing it to claim credit for that energy even though it does not consume it directly. Its goal is to increase the renewable energy it uses to directly power its data centers.

Microsoft is cutting its energy usage in other ways as well. It charges business units a fee for their carbon usage, encouraging them to be more efficient. The Company is also experimenting with undersea data centers, which may be able to tap into offshore wind farms and require less energy for cooling. In 2004, Microsoft installed Silicon Valley’s largest solar power system, which produced 480 kilowatts at peak capacity. The solar farm comprises 2,288 tiles, and today offsets as much as 15% of Microsoft’s energy needs at a five-building campus with about 1,800 workers. Microsoft is also one of the largest purchasers of green power in the U.S., buying up more than 1.1 billion kilowatt-hours of green power a year, according to the U.S. Environmental Protection Agency (EPA).

Silicon Valley majors join green bandwagon

m4Other Silicon Valley companies are joining the trend too. In 2015, 35% of the energy that Facebook Inc. (NASDAQ: FB) consumed came from renewable energy sources, according to figures it posted online, and the social media giant is aiming for 50% by 2018. Apple uses a massive 100-acre solar energy farm to power its Maiden, North Carolina, data center.

Over the past six years, the growth in wind farm deployments in the U.S. has been second only to gas-powered electrical plants. The list of companies using and deploying renewable energy resources includes Intel Corp. (NASDAQ: INTC), Kohl’s Corp. (NYSE: KSS), Staples Inc. (NASDAQ: SPLS), Wal-Mart Stores Inc. (NYSE: WMT), and Lockheed Martin (NYSE: LMT), according to the EPA.

A greener Google

m5Google has pledged to reduce its carbon footprint to zero through energy efficiency and the purchase of carbon-free renewable electricity to power its data centers and corporate facilities. Currently, a third of Google’s energy consumption comes from renewable energy.

In 2011, Google signed two 20-year contracts to purchase power from wind farms in Iowa and Oklahoma for two of its data centers in those states. In 2012, Google also signed a wind power purchase agreement with the Grand River Dam Authority to power the company’s Mayes County, Oklahoma, data center with 48 megawatts of wind energy from the Canadian Hills Wind project.m6

Supporting the White House’s Clean Power Plan

Microsoft also supports public policies designed to accelerate the availability and affordability of renewable energy on the grid. Along with Amazon, Apple and Google, Microsoft signed an amicus brief in support of the White House’s Clean Power Plan, which is expected to enter oral arguments by the end of September 2016. The plan is a commitment by the U.S. and 19 other countries and 28 leading technology innovators to double funding and other resources for clean energy R&D.

Microsoft co-founder and philanthropist Bill Gates is also leading the Breakthrough Energy Coalition, which along with other high-profile investors, plan to provide money for the development of zero-emission energy technology. The coalition includes Salesforce.com Inc. (NYSE: CRM) founder and CEO Marc Benioff, Amazon founder and CEO Jeff Bezos, Virgin Group founder Richard Branson and LinkedIn Inc. (NYSE: LNKD) founder Reid Hoffman.

Stock performance

m7Microsoft’s stock stood at $58.03, gaining 0.14%, at the close on Wednesday, September 28th, 2016, having vacillated between an intraday high of $58.06 and a low of $57.67 during the session. The stock’s trading volume was at 20,473,948 for the day. The Company’s market cap was at $452.20 billion as of Wednesday’s close.

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