The capacity will be used to support Microsoft’s data centers in California and builds on an earlier supply agreement between the two companies in Virginia.
AES and Microsoft have entered into a 20-year agreement under which AES will provide renewable energy to power Microsoft’s California data centers.
Under the agreement, AES will partially match the load of Microsoft’s California Data Centers with electricity generated from a portfolio of 110 MW of solar projects and 55 MW/220MWh storage projects, all set to be constructed in California.
This deal builds on a previous supply agreement that AES made with Microsoft, a 15-year supply agreement, signed in November 2021, under which AES will use both existing and to be developed renewable energy projects to supply renewable energy to Microsoft’s Virginia data centers. For this agreement, AES will source the energy from a portfolio of 576 MW of contracted renewable assets, including wind, solar, as well as battery energy storage projects in PJM.
“Microsoft continues to be a leader in the clean energy transition,” said Andrés Gluski, AES president and CEO. “Working in tandem with Microsoft, we co-created a scalable 24/7 carbon-free solution to power its data centers in Virginia, and we are now proud to move forward on another innovative renewable energy supply structure in California.”
Connecting data centers to renewable energy supplies is a bit of a specialty for AES, as the company has also signed an agreement to supply Google’s Virginia-based data centers with 24/7 carbon-free energy under a 10-year supply contract. According to AES, the transaction will result in construction of around 500 MW of renewable energy and storage projects to ensure Google’s Virginia-based data centers will be 90% carbon-free when measured on an hourly basis.
AES put together the 500 MW portfolio from a combination of the company’s own renewable projects and those of third party developers, which were selected, sized and contracted to meet Google’s energy needs. The portfolio is expected to require $600 million in investment and generate 1,200 jobs, both permanent and construction, in the host communities.
As for Microsoft, the company signed two significant non-AES supply deals in July of 2021. On July 15, the company announced it reached an agreement with Volt Energy for the supply of 250 MW of utility scale solar energy. In addition, Volt Energy and Microsoft will invest a portion of the revenue from the power purchase agreement in community impact funding initiatives. Those initiatives will support programs that bring the benefits of renewable energy closer to communities that have not had equitable inclusion in the wave of clean energy initiatives undertaken by the private and public sectors.
On July 20, Sun Streams 2, a 200 MW solar project in Maricopa County, Arizona, near Phoenix entered service, a project which has a 20-year revenue agreement with Microsoft for the project’s energy, renewable energy credits, and capacity, which will support its new datacenter region known as West US 3.
