Do you think Jeff Bezos uses Amazon.com to buy solar panels and windmills for his distribution facilities? Does he do his own product research, or does he just select something from the “Amazon’s Choice” list? Perhaps his cart looks similar to the one below but with much larger numbers, and therein lies the point. Big technology companies like Amazon, Google, and Facebook have changed the world in remarkable ways, but what is less known is the enormous amounts of power their servers and distribution centers require. This is where demand meets supply, since these corporates are increasingly “demanding” their power come from renewable energy.
In December, Bloomberg New Energy Finance (BNEF) reported that recent contracts signed by Amazon for renewable energy have pushed them past Google as the world’s top corporate clean energy buyer. The numbers are astounding, with Amazon approaching 6.9 gigawatts (GW) of renewable energy capacity. Add in demand from Google (6.4 GW) and Facebook (5.7 GW) and you’re at 19 GW. Putting this into perspective, the world’s largest supplier of renewable energy (Nextera Energy) boasts 19 GW of capacity, equivalent to the demand of the above three digital giants. It goes beyond this though.
Other corporate highlights include Apple pledging to become carbon neutral within the next ten years. Google has been reported to have purchased an equivalent amount of wind and solar energy for its EU data centers to power half a million homes annually. However, the most aggressive clean energy plan may be from Microsoft. While it is currently only the fourth largest corporate purchaser of green energy, it plans to become carbon negative by 2030 and to offset all the emissions it has produced since its founding (1975) by 2050.
Initiatives like the RE100 are helping drive the transition to 100% renewable energy by “bringing together the world’s most influential businesses”, and there are now over 280 companies that have made this commitment. That’s a lot of demand to support incremental investment in renewable energy. In fact, using data gathered by BNEF, RE100 electricity demand fell just shy of 330 TWh in 2020 of which 42% was supplied by clean energy. Through 2030, electricity demand from these companies is forecast to reach 455 TWh that according to the pledge, at some point over the coming decades, will need to be supplied entirely by clean energy.
We’ve said over and over the vast majority of capital invested in renewable energy will be towards infrastructure. Whether it’s BNEF’s prediction of $9 trillion (below) or McKinsey’s range of $13-$27 trillion, the number is always in the trillions and not the billions. The runway for growth is very long for the renewable infrastructure megatrend.
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