Newsletter: Big Tech is thinking hard about how — and where — to clean up the grid

Google and Microsoft face a raft of complexities as they choose how to invest their prodigious clean-energy budgets.

(Christine Roy/Unsplash)
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The U.S. Congress is currently deciding if it wants to engage in long-term planning for a clean electricity system. Some of the most valuable tech companies in the world are doing that already. 

Google and Microsoft already match their considerable annual consumption (hello, data centers!) with clean energy. Now they’re promising to take the next step, which is to match their consumption with clean energy produced in the same region, at the same time that it’s being used. 

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Those ambitious goals are pushing companies to make decisions about how to maximize their investments. The tech giants can focus on building clean energy for themselves — or on using their energy spending to build more clean power to feed into the dirtiest grids in the world (the carbon reduction bang-for-buck that we covered on Tuesday).

New research suggests that if tech giants build clean power for themselves, they could pay a lot more to achieve the same levels of carbon reduction than if they made strategic interventions in dirtier grids where they operate. 

  • This suggests that turning data centers into private clean energy plants probably isn’t the way to go.

  • But choosing to site data centers in areas with cleaner grids could reduce more carbon at lower cost.

This is pushing Google and Microsoft to refine their strategies on how to optimize clean energy impact, Jeff St. John reports in a follow-up to his emissionality story.

Brian Janous, Microsoft’s general manager of energy and renewables, acknowledged the diminishing returns of the isolated approach to sourcing 100 percent clean power 100 percent of the time. Instead, he’s thinking about how to reach 100 percent clean energy systemwide, rather than in separate corporate silos.

It goes far beyond the power that’s coming into our meter. It’s how we’re driving market behavior, how we’re pushing the boundaries on longer-duration storage — all the things we need by 2030 to some degree, and definitely by 2040.”

Here’s how Google’s Director of Energy Michael Terrell put it:

We’re not doing this on an island. We’re part of the system, and we recognize that to achieve our goal at every site, we need to drive system change at every site.”

What I see here is the energy transition unfolding in microcosm. 

Google and Microsoft are using some of their vast wealth to think harder about where they get their energy than most of us can afford to right now. They’re realizing that, while they could go it alone and build solar and battery and wind facilities to zero out their own carbon impact, that would cost more and help the climate less than taking a more holistic approach. 

Any user on the grid is part of a system. That system is currently governed by outmoded policies and market rules designed before the ascendance of clean and distributed energy broke and expanded our notions of what’s possible.

Democrats in Congress are deciding right now if they want to plan around some of these changes or keep thinking about infrastructure the way we have since before Google and Microsoft even existed. 

In the meantime, it’s the tech giants that have the will and the wherewithal to anticipate what a clean grid will need years from now — and to invest accordingly today.

Julian Spector is an editor at Canary Media and reports on the rise of clean energy. He worked at Greentech Media for nearly five years, and before that he reported for CityLab at The Atlantic.