Microsoft is considering whether to push back or reduce one of its boldest clean energy targets. This comes as the company’s rapid construction of AI data centers makes it harder to meet those goals. Microsoft has not made any public statements, but Bloomberg reports that the company is discussing its goal to match hourly clean energy use.
The tech giant previously stated that by 2030, it aims to match 100% of its hourly energy consumption with clean power from the same grid. However, Microsoft’s urgent need to build AI data centers has reportedly caused internal discussions about whether this pledge is getting in the way of its growth plans. Microsoft declined to comment on the internal debate about the hourly matching goal. Instead, a spokesperson told TechCrunch that the company continues “to look for opportunities to maintain our annual matching goal.”
Hourly targets, like the one Microsoft set, are much stricter than annual targets. Because a power grid needs a constant balance of supply and demand, matching energy use hour-by-hour helps develop clean energy sources that more accurately align with when a company actually uses power.
Annual targets are more flexible. They are essentially accounting methods that, for example, allow a company to buy more solar power than it might use at midday. Other customers on the grid use that energy, but the company that paid for the solar panels gets to claim the renewable power they generate. This convenient arrangement has sped up the installation of wind, solar, and batteries. However, annual targets alone won’t completely eliminate fossil fuels. Hourly targets help promote renewable development that more closely resembles how a truly net-zero world would get its power.
Large tech companies such as Microsoft, Meta, Google, and Apple have generally been leaders in reducing emissions, setting aggressive net-zero goals. Many have eliminated their carbon emissions on an annual basis. Microsoft, for example, said it met that goal last year.
But as data centers grow in size and number, these same companies are increasingly turning to natural gas. Microsoft is among them; last month, the company announced it was working with Chevron and Engine No. 1 to build a massive natural gas power plant in West Texas. This plant could eventually generate up to 5 gigawatts. Despite the West Texas project, Microsoft is still widely seen as a leader among tech companies striving for net-zero emissions. By 2030, Microsoft intends to remove more carbon from the atmosphere than its operations produce.
An internal carbon tax has driven part of the company’s push for renewable energy. The Microsoft spokesperson did not answer questions about the company’s carbon tax. If it remains, some of the internal debate around hourly matching might involve looking at the costs and benefits of this change. If Microsoft were to drop its hourly-matching target, the company would also lose some credibility when trying to convince the public about its data centers.
As data centers have become more common, the public has started to push back against them, citing concerns about pollution, electricity prices, and water use. When Microsoft brings its own clean power to a project, it can reasonably claim to have addressed two of those concerns. Without it, building new data centers might become a harder sell to the public.
