Amazon has become the largest buyer of renewable energy through power purchase agreements (PPAs) across several regions worldwide. In 2023, the company contracted 8.8 GW of renewable energy generation capacity through 74 PPAs in 16 different regions, more than double the 3 GW procured by second-largest buyer Meta. Amazon is now involved in over 600 solar and wind projects globally, ranging from small rooftop PV installations to large-scale solar and wind farms.
Amazon’s Approach to Renewable Energy
Rather than directly matching its energy consumption to renewable energy output, Amazon is focusing on reducing overall grid carbon emissions. “We want to drive grids to get greener along with our own operations,” said Patrick Leonard, principal for energy strategy at Amazon Web Services (AWS). “Instead of just serving our consumption, hour by hour, we measure success in terms of reducing overall grid carbon emissions.”
Focus on High-Emission Regions
This strategy has led AWS to prioritize projects in regions with high grid emissions. For example, Amazon’s nine projects in India avoid 55 times the emissions of the same renewable energy capacity added in Sweden, due to India’s higher reliance on coal power.
Expanding Renewable Energy Capacity
In regions with a higher share of renewable energy, Amazon is deploying energy storage to help supply solar and wind-powered electricity over longer periods. The company has around 2.7 GW of energy storage projects and “energy firming technologies” in its portfolio. In California, Amazon has participated in several battery projects to reduce reliance on fossil fuels outside peak solar generation hours.
Supporting Data Center Expansion
As a large energy consumer, Amazon needs to consider available electricity to supply its data centers and other operations. As part of its expansion plans in Mississippi, the company has announced plans to develop 650 MW of new renewable energy capacity in the state, alongside its new data centers.
Economic Considerations
While decarbonizing grids is a key goal, Amazon is also focused on the economics of its renewable energy investments. “Frugality is one of our leadership principles, so we are focused on the economics,” said an Amazon spokesperson. “But the case for these projects depends on where in the world we are and how we are participating, whether as an offtaker or in some other structure.”
Diversifying into Nuclear Power
Amazon plans to continue investing in solar, wind, and energy storage, while also making significant investments in nuclear power. The company sees nuclear as an important piece of the puzzle in meeting increasing energy demands at all hours. Amazon has invested in X Energy, a U.S. company developing small modular nuclear reactors, with plans to see energy commercially generated in the early 2030s.
“Wind and solar are great, and storage alongside them helps you add some hours,” said the Amazon representative. “But the grid is increasingly needing more energy at all hours.” Amazon is also planning to site a new data center near the Susquehanna nuclear power plant in Pennsylvania, and enter into a PPA with its owner, Talen Energy.
Innovation and Future Technologies
Amazon is willing to work with new technologies coming to the market and be among the first to adopt them. The company has recently used new installer robots at a U.S. solar project. While there are no plans to invest in supporting the next generation of solar and battery technology, Amazon is open to innovating in areas with more risk and uncertainty due to its size and scale.
