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Microsoft signs the largest corporate solar deal

Microsoft Solar Deal

Microsoft signs the largest corporate solar deal with sPower to purchase solar energy from two of its plants based in Virginia. The plants will be producing 315 MW to power Microsoft’s Virginia Data Centers.

United States: Microsoft recently signed the biggest solar power deal in US corporate history. The firm already has renewable energy deals in the US as well as other countries and is now having a contract with sPower to purchase solar energy from the company’s two new power plants in Virginia. This is being termed as the biggest corporate solar agreement for Microsoft in the United States.

The plants are estimated to produce 500 MW, of which Microsoft will be buying 315 MW, which will power Microsoft’s Virginia data centers and operations for its cloud business. The company is aiming for 50% of the energy used by its data centers to come from renewable sources of energy by 2018 and then shift to 60% by 2020. The deal would put it over 50% and enable in doubling up the solar capacity in Virginia, a state which traditionally relied on Coal.

Microsoft’s data centers have been 100% carbon neutral since 2012.

The technology giant has till date invested in 1.2 GW of renewable energy, enough to light up 100 million LED bulbs. The company owns a 180 MW wind project in Netherlands, 60 MW rooftop solar project in Singapore, a 37 MW wind project in Ireland and wind projects in Kansas, Wyoming, Illinois and Texas.

RE100, an initiative by influential global businesses that are committed to using 100% renewable energy has already been signed by 130 of the world’s biggest companies that power the digital economy, like Google, Apple, Microsoft and Facebook. Most of the companies are switching to Purchasing Power Agreements (PPAs) directly with electricity generators. To the renewable energy developers, signing a PPA with a company as big as Microsoft or the likes, removes significant barriers that arise while financing or developing new facilities.

PPAs are being considered important for global electricity markets. Most of the time, utilities are owned by the government and can thus be easily influenced by forces on governments. The deal is a welcome move in shifting the decision of whether to build renewable or fossil fuel power plants to the buyers or companies like Microsoft.

The CEO of sPower commented that Microsoft’s involvement has been extremely fruitful as it will help the project in moving ahead despite the regulatory uncertainty.

According to TechSci Research, the initiative by Microsoft to buy Solar Power from sPower for its Virginia data center would act as a stepping stone and other large corporates will also follow suit.  The deal is in line with RE100, an initiative taken up by influential corporates to shift to using 100% renewable energy. The initiative will large organizations that consume a lot of electricity switch to renewable energy, transform the global energy market and help in evolving to a low carbon economy.

According to the recently published report by TechSci Research, Global Distributed Generation Market, By Technology (Solar PV, Fuel Cells, Reciprocating Engines, Wind, Micro Turbines, Gas Turbines and Others), By Application (On-Grid and Off-Grid), By End-User (Industrial and Commercial), By Company and By Geography, Forecast & Opportunities, 2023”, Global Distributed Generation Market is projected to reach USD 103.42 Billion by 2023, at a CAGR of over 11% during 2018-2023 due to increasing mandates to reduce global greenhouse gas emissions and rising demand for electricity from the industrial, commercial, and residential sectors. Based on technology, global distributed generation market is segmented into reciprocating engines, solar PV, wind, microturbines, fuel cells, and gas turbines. The solar PV is the fastest growing segment due to decreasing costs of solar installations, attractive incentives, and greenhouse gas emission restrictions. Europe & CIS region is expected to dominate the market during 2018-2023, owing to the increasing energy consumption mainly from by the industrial and commercial sectors. Some of the leading players in the distributed generation market include Siemens, Schneider, Mitsubishi, GE etc.

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