Multinational corporations across the world have started to work towards reducing their carbon footprint. The big technology companies have taken the lead in this space. The use of energy-intensive data centres – which are mostly run on fossil fuels – by these companies has been a key reason why decarbonisation activities have taken centre stage. With the increasing use of the internet, the number and size of data centres has been growing and so are carbon emissions. The procurement of renewable energy has become a popular way to offset these carbon emissions. Instead of taking the traditional route of buying electricity from utilities, the tech giants are either taking the indirect route of buying renewable energy certificates (RECs) or the direct route of investing in on-site renewable energy projects. The second route also involves purchasing renewable energy through open access by signing power purchase agreements (PPAs) with developers.
Out of these tech giants, the Indian arms of Amazon and Microsoft have procured renewable energy in India, albeit at a much smaller scale compared to their global procurement. Other technology companies procuring renewable energy in India include Infosys, Cisco, Adobe and Qualcomm. The bulk of the push came a few years back in Karnataka when the open access policies in the state were less stringent. However, on-the-ground experiences in India in this space have not been hunky-dory.
Renewable Watch lists technology companies that are procuring renewable energy in India and have ambitious decarbonisation plans…
In June 2018, Amazon India announced a new initiative to generate clean energy through the installation of rooftop solar systems at its fulfilmentcentres and sortation sites across the country. At that time, Amazon India had already installed close to 1.6 MW of solar power capacity at its two fulfilmentcentres in Delhi and Hyderabad. The company planned to further deploy large-scale rooftop solar systems at five additional fulfilmentcentres and two sortation sites located in Bengaluru, Mumbai and Chennai, and expand its existing solar capacity in Delhi. With this deployment, by the end of 2018, Amazon India planned to install over 8 MW of solar capacity in the country. This investment in the solar energy space in India was in line with Amazon’s vision to deploy solar systems at 50 fulfilment and sortation centres globally by 2020. Amazon India has also set up solar energy systems at Amazon Cares Community and Resource Centres in Haryana. The company has donated solar energy systems to over 40 government schools across India and a mini-planetarium in Bhiwandi, Maharashtra. During Jeff Bezos’ trip to India in January 2020, Amazon India announced plans to add 10,000 electric vehicles (EVs) to its delivery fleet by 2025.
Amazon has been much more active globally in the procurement of renewable energy and in initiating decarbonisation. The most important announcement in this regard came in September 2019 when Amazon announced The Climate Pledge jointly with Global Optimism, a social and environmental change organisation. In this pledge, the company committed to meet the objectives laid out in the Paris Climate Agreement by 2040, a decade earlier than the agreement’s 2050 goal. In 2019, Amazon also announced its Shipment Zero initiative, which aims to make 50 per cent of all of the company’s shipments net zero carbon by 2030. Amazon has a long-term commitment to achieve 100 per cent renewable energy usage for the global Amazon Web Services infrastructure footprint. It has committed to source 80 per cent of its power requirements from renewable energy by 2024.
Among the technology companies in India, Infosys has been actively trying to decarbonise its businesses. In 2011, long before the Paris Agreement was announced, the company had made three voluntary commitments: to become carbon neutral, to transition to 100 per cent renewable energy and to improve per capita energy efficiency by 50 per cent. However, at the time no formal timelines were announced. The seriousness of the company’s commitments became evident when it became the first Indian firm to join the RE 100 initiative in 2015. With this, Infosys committed to source 100 per cent renewable energy for its electricity needs and become carbon neutral by 2018. However, the path to decarbonisation in India was not that simple. The company faced policy and regulatory issues related to open access policies in some states. Due to this, it extended the timeline of its renewable energy and carbon neutral target by two years to 2020.
During 2019-20, 44.3 per cent of the total electricity need across the company’s campuses in India was met by renewable energy sources. In the same year, it commissioned an additional 10 MW solar capacity in Sira, Karnataka, where a 30 MW solar plant had already been set up. With this capacity addition, the company has now invested in over 60 MW of solar projects across India and this includes both rooftop and ground-mounted solar systems. Infosys has also invested substantially in the clean cooking space in the country. Apart from investing in renewable energy projects, the company purchases renewable energy through PPAs in Tamil Nadu, Maharashtra and Karnataka. As the process of PPA signing and open access is quite cumbersome and the company’s portfolio of captive power plants is increasing, it is planning to slowly reduce power procurement through the PPA route. In June 2020, Infosys joined The Climate Pledge.
Cisco’s campus in Bengaluru uses solar power generated by two off-site solar installations located in Karnataka. From these installations it receives over 85,000 MWh of solar energy every year. In 2018, sourcing solar energy from these two projects provided nearly 40 per cent of the company’s electricity needs in Bengaluru. Globally, Cisco aims to achieve a 60 per cent greenhouse gas reduction and 85 per cent renewable energy procurement target by 2022.
In 2017, Adobe stated procuring solar power for its office in Bengaluru. It signed a 2.5 MW solar PPA, enough to cover its annual energy needs. Adobe is part of the RE 100 initiative and has committed to source 100 per cent renewable energy for all its operations by 2035. To this end, Adobe is focusing on procuring renewable energy through the open access route and not by carbon offsets or buying RECs. Apart from procuring renewable energy, Adobe is shifting to EVs to support decarbonisation in the country.
In March 2018, Microsoft announced its first renewable energy deal in India, in which it agreed to purchase 3 MW of solar power from Atria Power to help power its office in Bengaluru, Karnataka. Around
80 per cent of its electricity requirement is met by solar energy. Microsoft claims that it has been operating the entire company including its data centres at 100 per cent carbon neutrality since 2012. It has also purchased RECs to reduce carbon emissions. According to Microsoft, if investments in RECs are also included, 100 per cent of its consumption can be said to have been powered by renewable energy since 2014. The company has offset the carbon impact of air travel of its employees by investing in community projects such as clean cooking and solar lighting.
In January 2020, Microsoft launched an initiative focusing on carbon, water, waste and biodiversity. In this initiative, Microsoft committed to become carbon negative by 2030 and by 2050 remove from the environment more carbon than it has emitted since its inception in 1975. A $1 billion Climate Innovation Fund was also announced. From this fund, $50 million has been invested in Energy Impact Partners, an investment firm focusing on new technologies to transform the world’s energy and transportation systems. To reduce the direct and indirect emissions from its operations to near zero, Microsoft aims to procure renewable power for 100 per cent of its day-to-day power needs in its data centres by around 2025. Microsoft announced the plan to eliminate its dependency on diesel fuel by 2030. It also charted out its plan to focus on low-carbon-fuel sources, including hydrogen and energy storage. In July 2020, Microsoft extended the use of internal carbon tax to its suppliers as well.
Although Google is not procuring renewable energy in India, it is one of the largest corporate buyers of renewable energy in the world. In 2017 and 2018, it matched its entire annual electricity consumption with renewable energy. This means that for every unit of energy consumed, a unit of renewable energy was added to the power grid which was utilised somewhere else. The company’s data centres are not directly powered by 100 per cent renewable energy. This may be a difficult task considering the scale of Google’s operations and the need for regular supply of electricity to its data centres.
Google is well aware of its carbon footprint and is actively working to reduce it. In September 2019, it signed PPAs for over 1,600 MW of renewable energy projects. This increased Google’s portfolio of wind and solar agreements to 5,500 MW. It now aims to power its data centers and offices 24×7 using solely carbon-free electricity by 2030.
The way forward
A viewpoint is emerging that, going forward, technology companies with large carbon footprints should reduce and ultimately stop the purchase of carbon offsets and unbundled RECs as it does not lead to any on-ground developments in the renewable energy space. Instead, these companies should invest in on-site renewable energy projects or procure renewable energy through the open access route, which can actually help in decarbonisation of the grid. In India, the uncertainty regarding open access regulations and the high open access charges in some states are the elephants in the room. One can argue that often technology companies are made to bite off more than they can chew. Meeting the ambitious clean energy demands can end up being quite costly for any company irrespective of its scale of operations.
Even so, there is no doubt that big technology companies – with their deep pockets – can simultaneously work on offsetting their carbon emissions by procuring more renewable energy and invest in core businesses to provide better services to consumers. Also, the falling cost of renewables makes the procurement of renewable energy a prudent business decision and not just a PR exercise. Therefore, going forward, more technology companies will be willing to reduce their carbon footprint.
By Sarthak Takyar