AES has become tech's renewables matchmaker
Tech giants are increasingly turning to AES, a Fortune 500 energy company, to help meet net-zero goals.
Why it matters: Tech giants alone could support a billion-dollar business when it comes to net-zero-focused enterprise contracts.
Driving the news: In its earnings call Friday, AES announced a deal with Amazon to provide 675 megawatts (MW) of renewable energy to the e-commerce behemoth.
- The deal included a 450 MW allotment of solar power combined with 225 MW of 4-hour-duration battery energy storage.
- AES will deliver the renewable energy in the California Independent System Operator (CAISO) market.
State of play: AES also supplies renewable energy to Microsoft and Google via long-term power purchase agreement contracts. The company declined to disclose the monetary value of the contracts to Axios.
- AES supplies 500 MW to Google in the Pennsylvania, New Jersey and Maryland (PJM) combined market.
- It supplies a combined 741 MW to Microsoft, with 576 MW in PJM and 165 MW in CAISO.
- The contracts take into account the companies' focus on hourly outputs instead of annual net-zero targets, AES CEO Andrés Gluski tells Axios.
Context: All three tech giants have aggressive net-zero targets, but are unable to build entirely new renewable energy production facilities that are instrumental in reaching those targets.
- Working with existing producers like AES is a time- and cost-efficient way to transition to renewable energy.
- Gluski tells Axios that tech company contracts can often extend beyond the company's U.S. footprint. Both Google's and Microsoft's contracts have spurred deals in Chile, he says.
💭 Our thought bubble: As with other global trends, like remote work, tech companies are in a unique position to dictate how corporations work with renewable energy suppliers in the energy transition.
- And that could be a boon for facilitators and producers like AES.