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Microsoft mulls project stakes as renewables base grows

Software giant could follow likes of Ikea in adding ownership of projects to renewables strategy, says executive

Microsoft could follow the likes of Ikea by owning stakes in projects as it pursues its renewable energy ambitions, and expects to see more procurement deals involving offshore wind, a senior executive for the software giant told Recharge.

The US technology group has not so far used ownership as part of its model as it built up a 1.9GW portfolio of wind and solar deals to help power its data centres and other facilities, most recently signing a 230MW power purchase agreement (PPA) with Engie plants in Texas.

Vanessa Miler-Fels, renewable energy and sustainability strategist at Microsoft, said ownership stakes in projects along the Ikea model “is certainly something we are considering” as it expands its clean power procurement to the equivalent of almost 1GW annually, and looks at different ways to mitigate future risks of a zero-carbon supply portfolio.

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“We’re looking into that. We haven’t executed anything like that so far,” Miler-Fels told Recharge on the sidelines of the RE-Source corporate sourcing event in Amsterdam, adding that project ownership brings its own risks and would have to be done in conjunction with suitable partners.

“We would be considering it in Europe or also in other markets, if there is the right kind of value and benefits,” she added.

Microsoft earlier this year signed its first deal for offshore wind power, with an agreement to take 90MW from the Eneco/Shell-developed 731MW Borssele 3&4 project in Dutch waters.

Miler-Fels said she “absolutely” expects to see more deals in the offshore sector, citing its higher capacity factors and more stable output as a potential advantage over onshore wind plants.

The Microsoft executive added that the software giant sees “no market limitations” as it ramps up procurement with a view to having its data centre fleet 100% renewable-powered by 2030 at the latest.

“There will be enough supply of renewable energy. The key questions will be the price – how competitive are renewables,” said Miler-Fels.

She said grid-parity is only part of the challenge, with Microsoft also seeking ways to manage risks such as intermittency or price cannibalisation.

“We’re making sure we have the proper tools – financial and technological – to address some of the risk, to make sure the price is the right price.”

Miler-Fels cited storage as a potential technological tool, and innovative financial models such as the recent 'volume firming agreement' struck with Engie for its US output.

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