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How Amazon Matches Energy Demand to Green Energy Sources

Posted on by darion

Last week, Amazon announced it had already achieved its goal of 100% renewable energy — seven years early.

Green news from the world’s largest retailer has been more upbeat than from its cloud-computing rivals. In early July, Google said its total emissions in 2023 rose 13%, blaming AI’s growing energy needs.

Microsoft also reported an overall increase of 29%, which it said was mostly due to new data center construction. (Progress was made in several areas; Microsoft said it saw a 6.3% reduction in emissions from company-controlled assets and power supplies, known as “Scope 1” and “Scope 2” emissions.)

Amazon is indeed the world’s largest buyer of solar and wind power, and it continues to fund hundreds of different clean energy projects. But how do you calculate the impact of those projects—when other parts of Amazon’s business still contribute greenhouse gases? That’s a key question that has implications for other companies, the renewable energy sector, and ultimately, planet Earth.

But perhaps the debate itself shows how seriously this challenge is being taken…

Top or bottom?

Amazon’s announcement begins by acknowledging a 7% increase in emissions from its own direct operations, “primarily from the use of transportation fuels.” But then it reported an 11% reduction in emissions from electricity, plus a 5% drop in indirect emissions and supply chain emissions, calculating an absolute 3% drop in carbon dioxide emissions.

Still, “critics say the calculations are misleading,” the Seattle Times reported Wednesday, adding that Amazon’s carbon emissions “are still nearly 20 million metric tons higher than they were at the start of its five-year run… the company’s carbon footprint has yet to fall below 2019 levels, the first time it has disclosed its carbon emissions.”

What’s happening? Amazon announced that all of the energy used by its operations (including data centers) in 2023 is now “matched” by renewable energy. Amazon’s video shows that in 2019, they matched about 42% of their energy use to renewable energy — so that matching has increased significantly over the past five years.

In February, research group BloombergNEF reported that, in part because of this alignment, Amazon actually bought more solar and wind power in 2023 than all three of the world’s next largest buyers combined. (That’s Meta, LyondellBasell, and Google…) In fact, Amazon alone accounted for nearly a fifth of all renewable energy purchase agreements in 2023.

BloombergNEF Chart of Renewable Energy Purchases in 2023 by Amazon, Meta, and Google

That gave Amazon the eighth-largest clean energy portfolio in the world, according to BloombergNEF (“though Amazon does not own its projects”). Kyle Harrison, head of sustainability research at BloombergNEF, said in February that “Amazon’s commitment to clean energy demonstrates how a single company can help accelerate the transition to a low-carbon economy on a global scale.”

However, this approach has been met with criticism from an activist group called Amazon Employees for Climate Justice.

Last week, the group issued a forceful counter-statement that claimed Amazon often buys power from local grids — “investing in data center expansion in locations heavily dependent on oil, gas, and coal — such as Northern Virginia and Saudi Arabia.”

The group claims that Amazon offsets these carbon emissions by financing renewable energy generation elsewhere — and estimates that about 68% of these offsetting purchases of Renewable Energy Certificates (or “RECs”) “are low-quality and do not contribute to the creation of new, additional renewable energy; these credits simply trade on paper claims for electricity that other people have already generated and consumed.” (They base this claim on data they say Amazon provided to a long-standing international nonprofit, CDP (originally the Carbon Disclosure Project).

Amazon responds

Asked for comment, Amazon accused the group’s report of “flawed findings and assumptions, likely because, as its authors admit, it relies on data and opinions from people outside the company” — while Amazon’s recently published Sustainability Report “contains accurate data, transparent published methodologies, and third-party assertions.”

Amazon’s sustainability report acknowledges that while the company saw an 11 percent decrease in emissions from energy use in 2023 (4% of its total carbon footprint), this was due to the use of renewable energy and the purchase of renewable energy certificates.

An Amazon spokesperson explained to The New Stack that “the solar and wind projects we invest in can take several years to be built and generate renewable energy. In the meantime, we are purchasing unbundled renewable energy credits to temporarily bridge the gap until the project goes live. This allows us to continue to signal to the market our support for renewable energy.”

Amazon isn’t the only company that’s matching its energy usage to its renewables investments. “A total of more than 200 corporations have announced power purchase agreements in 2023,” BloombergNEF wrote, “showing the popularity of clean energy purchases as a decarbonization tool for the private sector.” In fact, all corporate power purchase agreements totaled 46 gigawatts—up from just 41 gigawatts in 2022, and the seventh consecutive year that the total has increased.

So what’s the significance of offsetting carbon-based energy with renewable energy produced elsewhere? “The collective action of the corporate community has allowed this renewable energy industry to move quickly, to do this in a short period of time,” explains an Amazon video touting Amazon’s billions of dollars of investment in more than 500 projects around the world.

And Amazon’s announcement of its latest sustainability report highlights some firsts. “We were the first corporation to enable utility-scale renewable energy projects in India, Greece, South Africa, Japan, and Indonesia,” the company said in its announcement, “among other countries. To achieve this, Amazon worked with policymakers to enable first-of-its-kind policies that help corporations support the construction of new solar and wind projects…”

However, the activist group’s counter-statement includes this counter-argument from former NASA scientist Dr. James Hansen (also director of the Climate Science, Awareness and Solutions Program at Columbia University). “The great tragedy is that virtually the entire world has permission to use this trick.” However, given Amazon’s size, Hansen believes it’s important to call attention to their use of this tactic.

And it could have real-world implications, climate scientist Dr. Sarah Myhre says in a counter-statement from the group. Myhre believes Amazon’s energy use “is being used to justify building new fossil fuel infrastructure, such as pipelines, export terminals, and refineries, and to delay the retirement of coal-fired power plants.”

We are moving forward

The group of workers summed up their grievances succinctly with a quote from Brenda Huerta Soto, a community organizer with People’s Collective for Environmental Justice. “As long as Amazon keeps pushing diesel trucks into our communities and polluting our air, there’s no way their claim of 100% renewable energy is true.”

But Amazon continues to pursue a wide range of other climate initiatives going forward. Last week, Amazon announced that it would “prioritize working with suppliers that have also committed to decarbonizing and achieving net zero emissions… We have identified a list of the highest-emitting suppliers that directly support our operations. We expect suppliers that collectively contribute more than 50% of global emissions to Amazon’s Scope 3 footprint to submit a plan on how to decarbonize their operations and demonstrate real progress over time.”

The same announcement also saw the launch of a website featuring “previously proprietary information to help other companies make significant progress towards achieving net zero emissions.”

As a companion site, Amazon has also launched The Science Exchange to help develop new solutions (current work includes information on alternative fuels, construction materials, and packaging materials, as well as cross-sector measurement tools, datasets, methodologies, and industry mechanisms).

An example is the Amazon Sustainability Data Initiative, which gives anyone access to large sets of sustainability-related data while offering cloud grants “to people interested in exploring AWS technologies and scalable infrastructure to solve large, long-term sustainability problems using this data.”

Amazon is also undertaking a number of renewable energy initiatives:

  • In May, Amazon announced 650 megawatts (MW) of new renewable energy projects in Mississippi to fund two new data centers (in partnership with local utility Entergy) as well as “fund future upgrades to the local power grid and energy infrastructure over the next two decades.”
  • There is also Amazon’s $2 billion Climate Pledge Fund, a corporate venture program that has invested in 26 “emerging” climate-focused startups to date.
  • Rivian’s order for 100,000 electric vans is the single largest purchase of an electric vehicle in the world, Kara Hurst, vice president of global sustainability at Amazon, told NBC News.
  • Amazon’s sustainability website says the company is also expanding its use of zero-emission transportation beyond electric delivery vans to include electric cargo bikes as well as foot deliveries.

These are just a few of Amazon’s climate-focused initiatives. And as the work continues, Amazon’s announcement ended with a look into the future that was decidedly optimistic…

“We love taking on big challenges and are proud of the progress we’ve made so far.”

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David Cassel is a proud resident of the San Francisco Bay Area, where he has covered technology news for more than two decades. Over the years, his writing has appeared everywhere from CNN to MSNBC to the Wall Street Journal Interactive…

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