- By 2022, Amazon is buying 10.9 gigawatts of clean energy, enough power to power the entire nation of Ecuador, according to BloombergNEF.
- Amazon has pledged to power its operations with 100% renewable energy by 2025. As of January, Amazon had 164 solar and wind farms, and 237 rooftop solar power plants.
- Bringing new wind and solar power to the U.S. grid required strategic planning due to supply constraints. In some countries, new regulations are required.
Featured here is Timber Road, a wind farm in Ohio that is part of Amazon’s Clean Energy portfolio.
Image courtesy of Amazon.
Clean energy procurement is led by Big Tech companies. Among the leading business groups, Amazon consistently beats all the big tech companies.
In 2022, Amazon purchased 10.9 gigawatts of clean energy, making it the largest combined buyer of renewables, according to data from a market research firm. Bloomberg. That is enough energy to run the entire nation of Ecuador.
It’s also more than four times the amount of clean energy purchased by the second largest buyer of clean energy, Facebook’s parent company Meta, in 2022. Google, Microsoft and Codelcothe state-owned copper mining company in Chile, among the top five.
In 2019, Amazon announced its Climate Pledgemade a public commitment for the entire company to be net zero carbon by 2040. At the time, Amazon accelerated its commitment to run its operations on 100% renewable energy from 2030 to 2025.
He said: “When we announced the Commitment in 2019, we were very specific and I would say loud and clear about our approach to renewable energy.” Charlie DeitchDirector of Power and Water Infrastructure at Amazon Web Services, Amazon’s cloud computing company.
Daitch oversees many of Amazon’s renewables interests — including the acquisition of renewable projects for Amazon’s fulfillment warehouse network, Whole Foods markets, and freight distribution. Rivian fleet of electric cars making deliveries – but it’s an AWS member because AWS and all of its associated computing uses a large portion of Amazon’s electrical footprint.
Since 2019, Amazon has expanded From having one gigawatt of renewable energy to more than 20 being re-publicized.
Amazon has accelerated its purchases of renewable energy because it is now a technology that is so readily available that Amazon can disrupt its business, Deitch told CNBC.
“We knew this was where we could make an impact at scale today,” he said. Low-carbon jet fuel technology, for example, has not yet reached a large scale. Amazon is funding innovation in high-demand and challenging cutting-edge decarbonization areas through its multibillion-dollar venture capital fund, the Climate Promise Fund.
As of January, Amazon has 401 renewable energy projects in 22 countries, This includes 164 utility-scale wind and solar farms and 237 rooftop facilities in fulfillment centers, AWS data centers, corporate offices and physical stores. A rooftop solar system on top of a North American fulfillment center can generate up to 80% of the charging station’s energy, depending on the time of year and other parameters.
The solar farm in Prince George’s County, Virginia is called the Fort Powhatan Solar Center, which is part of Amazon’s portfolio.
Image courtesy of Amazon
In order for Amazon to meet these renewable energy goals, Amazon will use some Renewable Energy Credits, or RECs. Electric grids carry power from all kinds of sources, some clean and some dirty. REC is a legally acceptable way for a company to calculate its energy consumption and document that it is buying clean energy.
While Amazon will buy RECs, that’s not the focus of its renewable energy vision. Deitch told CNBC that Amazon is aiming to build new wind and solar projects.
“If we have a project coming online in 2025, we can buy a certain amount of credit up front to signal our support for renewable energy in that market before it comes online. But this is really a bridging solution and not our main strategy which is about enabling wind projects new and solar energy.
In addition, Amazon is not buying more RECs than it is investing in actual renewable projects and the goal is to reduce its reliance on RECs over time, Deitch said. “The largest and most important part of our portfolio is around new wind and solar projects that we are developing around the world,” he said.
In the United States, connecting new wind and solar power to the national grid is a challenge because the transmission system is already underserved. In order to get projects connected to the national grid, new energy sources, such as wind or solar power, must go through an approval process called an interconnection agreement that can take years to go through.
“From a corporate strategy perspective, we were fortunate to sign a lot of projects in 2020 and 2021. So a lot of our projects are already waiting on that waiting list,” Ditch said.
“Two years ago, the average wind or solar project in the U.S. got a schedule of two and a half to three years. I think realistically now, on most networks we’re looking at five years or more.”
Although Amazon benefits from planning ahead, it knows that congestion in the US is a problem that will cause problems.
“Our goals for 2025 and the projects we set are not affected by these long lines like others may have if you want to implement projects now or in the past six months but we are still working on them because we know they exist. an important part of our long-term strategy.”
Amazon meets The federal Energy Regulatory Authority, He said that the main regulatory agency in the United States is responsible for managing the transportation of energy and the wholesale sale of electricity. “We have been advocating policies that allow transport operators to make investments going forward. Right now, transportation plans are very active,” he said.
This wind farm in Sweden, called Backhamar, is part of Amazon’s clean energy portfolio.
Image source: Daniel Larsson / Eolus.
Amazon is starting to build wind and solar projects in the US and Europe because that’s where most of Amazon’s businesses operate and also because that’s where its real bottom line is.
“The United States and Europe have regulatory systems and policies that allow vehicles for buyers of companies like Amazon to invest directly in projects. So I don’t want to say it’s easy, but there is a way to do it on a very large scale. in the United States and European countries.” “This is not true all over the world.”
In some countries, especially where the energy infrastructure is owned by the government, Amazon must work with governments and regulators to build wind and solar energy sources. He said Amazon has a well-known brand that has “senior corporate leaders and senior government officials sitting with us.”
The company’s reputation as a major clean energy producer also helps. “Our track record of success in deploying renewable energy around the world gives us that credibility,” he said.
For example, Amazon had to create new regulations to be able to do a Solar company contract in South Africa. In Indonesia, Amazon is partnering with PLNwhich is a facility owned by the government, to be able to invest in solar energy projects there.
Amazon hopes other companies will benefit from the line it has created.
“When we use these different standards and structures to build renewable projects, it’s not just Amazon. Any company can come to South Africa now and benefit from the tariffs and structures we put in place to build wind and solar projects,” said Dit. “And we hope other companies will benefit from that. “
Another challenge is the emergence of supply chains in many countries.
Although renewable energy projects in places like South Africa and Indonesia face obstacles, the upside is that they have a significant impact on carbon reduction because these countries have more coal-fired power plants.
As Amazon looks to expand AWS into new areas, access to renewable energy is an important part of the conversation, said Daitch, but so far, Amazon has found a way to build renewable energy in any country it wants to enter.
“We want to be open and transparent about the challenges we face, but if we limit ourselves to saying, ‘Yes, we will scale up our business where we know we can get 100% renewable energy without off-the-shelf equipment. and there are no changes to legal or regulatory structures ,’” “We didn’t have the opportunity to make some of the impact that we had in these new countries and we opened the door to renewable industries in the region,” said Deitch.
In addition to organizational innovation, Amazon also innovates from a technology perspective. For example, in India, where The electricity grid is still operating with a very dirty electricity supplyHe said Amazon is putting solar panels and wind turbines in the same project. “The more renewable energy we can put on the grid, the more carbon we can reduce. Bringing wind and solar together is a very attractive way to do it,” he said.