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AES has become tech's renewables matchmaker

In this illustration, solar panels are designed to look like 100 dollar bills.

Illustration: Aïda Amer/Axios

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.
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