Case in point: Microsoft, which just signed a 15-year contract to buy 100 percent of the wind energy from a new 37-megawatt wind farm in the Irish countryside, built and owned by GE. The software company will use all energy produced from the farm to power its Irish data center.
The crossover between the worlds of kilobytes and kilowatts is not unheard of. Tech companies like Microsoft, Amazon, Facebook and Apple have made similar deals tapping wind and solar installations to power their massive, power-hungry data centers. What’s different about Microsoft’s latest investment is how it came together. GE Capital financed the farm, which uses GE turbines and battery solutions, and partnered with GE Renewable Energy to arrange the power contract, in effect making GE a one-stop-shop for connecting Microsoft to an individual wind farm. The farm is also using GE software to manage wind power.
Until recently, that wasn’t possible. “It’s not like power supply of the past where you had a bunch of nuclear power plants, a couple coal plants and some gas-fired generation with the odd renewable asset thrown in, and then a jumbled mix of grey and green power being sold at the consumer end,” says Uli Suedhoff, a director at GE Renewable Energy in Europe. “Now you have thousands of different wind farms.”
The new model being pioneered by GE sees wind farms channeling power straight to energy buyers like Microsoft, Suedhoff says. That means a turbine manufacturer like GE can take on the role of enabler for the first time. “It’s new in the sense that [GE] is arranging the whole equation between demand and supply,” he says.
Corporate power contracts are good for small and medium-size wind farms, whether they’re owned by a project developer, investment fund or are a community wind farm. Traditional available power contracts tend to be short term — because power prices can quickly change — and as renewable energy subsidies disappear, wind farms will need long-terms contracts to secure financing. Suedhoff believes the agreement GE is pioneering with Microsoft can serve as a model for future wind purchases.
The wind farm has other new features. For example, given that wind generation can be highly irregular — the wind doesn’t always blow — the farm will use Predix, GE’s software platform for the Industrial Internet, to smooth out its output.
Apps running on Predix can also alert wind farms to needed maintenance. Over time that can lower costs by up to 5 percent and boost the farm’s power by roughly the same amount, Suedhoff says.
Tech companies are increasingly looking to green energy for power, especially as prices become more competitive. “It’s not just fluffy corporate responsibility strategies,” Suedhoff says. “They want to buy competitively priced energy.”
Future customers won’t necessarily be technology companies. It could be an industrial company, says Suedhoff. To that end, GE is currently talking to many members of the renewable 100, a list of large companies that includes The Coca-Cola Company, Ikea, BMW and others. They have all committed to going 100 percent carbon-free over time and might also prefer to buy their power directly from a wind farm. The appetite is certainly there. “There are more companies getting serious about their green supply,” Suedhoff adds. “Their shareholders are asking for it.”