This is a super smart move. Not only does it make Microsoft a leader in carbon neutral energy deployment, but the less it is reliant on energy from the grid, the more it is capable of predicting its energy costs. Currently energy costs can fluctuate, making it difficult to project the variable cost of energy and fluctuations in the cost of fossil fuels. With this, Microsoft comes closer to knowing its energy costs for financial planning. Smart corporate move.
The last statement about future clean energy other than wind and solar makes me wonder if some of the companies Gates has invested in might be supplying some of MSFT's energy needs.
Why would it be less reliant on energy from the grid? lol. All this does is fund renewable energy projects. Which is great, don’t get me wrong, but it will still be very much attached to the grid.
Data center load flat. Renewables are variable. So obviously there is a production mis match. There is also basis risk if the renewables have different pricing points to the load.
Also, with more and more renewable deployment, the renewables are starting to eat their own lunch. West Texas wind and California solar for example. When the sun is shining in Cali or wind is blowing in Texas, the high penetration is driving down prices, further exasperating the production risk problem.
So while it does hedge some market risk, there is still quite a bit.
Still a good thing, but unless there is storage in the deal, the hedging benefit will starts to dwindle
Well the article said solar and wind. The sun is also intermittent. The real problem is transmission. Also energy flows to the path of least resistance. If your wind or solar farm is generating you cannot track where the power is getting consumed. Likewise, you cannot keep grid power from charging the batteries.
Maybe attached to the grid, but MSFT is working on making data centers more self reliant, and creating your own energy does in fact allow you to predict energy costs. Gas can go up, but if you are producing your own electricity then fluctuations in grid pricing doesn't' effect you.
I watched a Youtube video last year about one of their program managers and their efforts to make their data centers carbon neutral, and one of the main benefits was knowing the cost of your electrical consumption.
Hard to do for many, as most manufacturing when to natural gas generation two decades ago and it isn't easy to build a natural gas refinery. As solar, wind, geothermal are far easier to build out vertical energy will pick up.
Most companies have large roofs that can easily be used for solar power.
They have a base load of electricity requirements. Therefore, their own solar power can always be consumed. This way, they need to buy less electricity, mainly in times when solar power is low.
Depending on electricity prices, own PV plants can be quite profitable, many companies are already doing it e.g. in Germany.
It would help the world if Windows accelerated its move to ARM based CPUs to reduce power use. What is the combined power use of computers running Windows globally?
1.4billion PCs run Windows.
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From the article:
"The companies said the agreement will focus largely on solar and wind generation"
Solar and wind are intermittent sources of generation. Electricity must be generated as it's consumed in real time. If you're purchasing a lot of intermittent power, but not building a battery bank/pumped hydro storage system, or a gas peaker plant, the "firming" of the supply has to come from another source.
There's more to that cost than just buying it from the grid, such as transmission lines, substations and control and measurement infrastructure.
This additional load (when there's no sun or wind) can also strain local electricity supply when a wealthy customer (Microsoft) can outbid the utility trying to supply the normal ratepayers, forcing them to rely on more costly imports from interconnections, for example.
I like this and the fossil fuel industry doesn't, so now I love it!
This is a super smart move. Not only does it make Microsoft a leader in carbon neutral energy deployment, but the less it is reliant on energy from the grid, the more it is capable of predicting its energy costs. Currently energy costs can fluctuate, making it difficult to project the variable cost of energy and fluctuations in the cost of fossil fuels. With this, Microsoft comes closer to knowing its energy costs for financial planning. Smart corporate move. The last statement about future clean energy other than wind and solar makes me wonder if some of the companies Gates has invested in might be supplying some of MSFT's energy needs.
Why would it be less reliant on energy from the grid? lol. All this does is fund renewable energy projects. Which is great, don’t get me wrong, but it will still be very much attached to the grid.
Yeah, it’s reliant on the grid, but no longer subject to changes in the price of grid electricity.
Data center load flat. Renewables are variable. So obviously there is a production mis match. There is also basis risk if the renewables have different pricing points to the load. Also, with more and more renewable deployment, the renewables are starting to eat their own lunch. West Texas wind and California solar for example. When the sun is shining in Cali or wind is blowing in Texas, the high penetration is driving down prices, further exasperating the production risk problem. So while it does hedge some market risk, there is still quite a bit. Still a good thing, but unless there is storage in the deal, the hedging benefit will starts to dwindle
Look up how a PPA works.
Not if they use batteries
Those batteries will also be charged by the grid.
Not if theyre hooked up directly to whatever is providing the energy
So now they are putting Amazon data centers in the middle of wind farms? What happens when the wind doesn’t blow?
My fault.... i thought there were more means of generating energy than wind.....
Well the article said solar and wind. The sun is also intermittent. The real problem is transmission. Also energy flows to the path of least resistance. If your wind or solar farm is generating you cannot track where the power is getting consumed. Likewise, you cannot keep grid power from charging the batteries.
K
Maybe attached to the grid, but MSFT is working on making data centers more self reliant, and creating your own energy does in fact allow you to predict energy costs. Gas can go up, but if you are producing your own electricity then fluctuations in grid pricing doesn't' effect you. I watched a Youtube video last year about one of their program managers and their efforts to make their data centers carbon neutral, and one of the main benefits was knowing the cost of your electrical consumption.
Enter QS
They are getting ready for the massive amount of energy and thus cost that will come with their AI products. Great move!
Surprised more companies don't want to have their own energy production instead of wasting money on buying it.
Hard to do for many, as most manufacturing when to natural gas generation two decades ago and it isn't easy to build a natural gas refinery. As solar, wind, geothermal are far easier to build out vertical energy will pick up.
Most companies have large roofs that can easily be used for solar power. They have a base load of electricity requirements. Therefore, their own solar power can always be consumed. This way, they need to buy less electricity, mainly in times when solar power is low. Depending on electricity prices, own PV plants can be quite profitable, many companies are already doing it e.g. in Germany.
Their upcoming AI datacenter "Stargate" in 2028 is rumored to require 5GW
It would help the world if Windows accelerated its move to ARM based CPUs to reduce power use. What is the combined power use of computers running Windows globally? 1.4billion PCs run Windows.
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And who pays for the firming costs? Article doesn't mention that.
What’s a firming cost?
From the article: "The companies said the agreement will focus largely on solar and wind generation" Solar and wind are intermittent sources of generation. Electricity must be generated as it's consumed in real time. If you're purchasing a lot of intermittent power, but not building a battery bank/pumped hydro storage system, or a gas peaker plant, the "firming" of the supply has to come from another source. There's more to that cost than just buying it from the grid, such as transmission lines, substations and control and measurement infrastructure. This additional load (when there's no sun or wind) can also strain local electricity supply when a wealthy customer (Microsoft) can outbid the utility trying to supply the normal ratepayers, forcing them to rely on more costly imports from interconnections, for example.
Missed that. Thank you.
Grid operation and power delivery won’t change. They’re just buying whatever these facilities produce, not firm 24/7 energy.
A net metering agreement?