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3 Ways Microsoft Is Rethinking Its Energy Supply

This article is more than 10 years old.

I'm mostly kidding, but maybe we should go back to calling cloud services by one of its earlier names, utility computing. After all, this whole evolution is inspiring high-tech vendors from Apple to eBay to Google to focus far more closely on their relationships with the utility sector or (as is the case with all three of these companies) to invest directly in on-site production. Essentially, they are all getting into the power business in some capacity.

This week, we're hearing more about Microsoft's strategy around this challenge, in the form of the developer's new three-year relationship with the University of Texas at San Antonio (UTSA). The pact includes a $1 million research grant to the university meant specifically to fund research into distributed, clean generation technologies, including micro-turbines that can replace diesel generators in periods of peak demand.

"This is one of our first major research partnerships to use data centers as a laboratory for next-generation energy technologies, but it will certainly not be our last," writes Brian Janous, in a Microsoft Green Blog post. "Distributed generation will be an important part of how we power our data centers as we continue to pursue Microsoft's energy strategy of transforming the energy supply chain."

Why San Antonio? The location was picked for several reasons, most obviously because of Microsoft's $250 million investment in a new 256,000-square-foot data center next to its existing facility there, which is about 427,000 square feet. The local utility, CPS Energy, is the biggest publicly owned purchaser of wind power with more than 1,059 megawatts (MS). It has 89 MW of solar power in operation, with another 350 MW in contract.

"We believe that this research partnership will help make distributed generation more economically viable while helping the city achieve its goal to be the leading U.S. city in clean energy technology," Janous writes.

Microsoft's commitment to green power is actually part of its Global Public Policy Agenda, and is perhaps best illustrated by its move last November to sign a 20-year power purchase agreement (PPA) with RES Americas for wind power in Texas. It's buying all the power generated by the 110 MW Keeh Wind project (one of the turbines there is pictured in the image above). The  55-turbine farm is on the same grid as the aforementioned San Antonio data center. Construction began early this year, and the farm is expected to go online in early 2015.

That PPA, by the way, is funded by Microsoft's innovative internal carbon fee, which basically sets a price for the carbon dioxide emissions related to a given division's office space and other infrastructure.

Moving forward, Microsoft's strategy for sourcing energy will take three primary forums:

  1. Investments and experiments in distributed generation technologies, such as the UTSA relationship
  2. Direct purchases of renewable energy, such as the PPA agreement in Texas
  3. Research into the next generation of energy technology, including how to incorporate energy storage into data centers

"These initiatives are bound together by our objective to transform the energy supply chain toward radically greater efficiency and reduced environmental impact," Janous writes.

Photo by Michael Carmichael, courtesy of RES Americas