Amazon Accelerates Corporate Green Energy Buying and Electric Transportation

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When it comes to going green, Amazon is not just blowing smoke. The technology giant continues to set the bar. BloombergNEF’s latest analysis says that corporations bought a record 31,000 megawatts through power purchase agreements in 2021, and Amazon was the leader. 

Amazon’s use of sustainable technologies is far-reaching. Beyond entering into long-term contracts with wind and solar plant developers, it is also constructing those facilities and building out its electric vehicle fleet. And it has started Amazon’s Climate Pledge Fund — sourced initially with $2 billion to help Amazon and other carbon-conscious companies become net-zero by 2040. The fund invests in promising ventures in transportation, energy generation, manufacturing, buildings, materials, food, and agriculture.

“Amazon has varied business units. We are a logistics company, a retailer, and a grocery store,” says Matt Peterson, director of new initiatives and corporate development for Amazon, in a talk with this writer. “If any company wants to get to net-zero today, the technologies don’t yet exist. Our fund’s purpose is to invest in those technologies that will help Amazon and others get to net-zero by spurring innovation. We are investing in transportation, energy, buildings, materials, food, agriculture, and the circular economy.” 

One of the companies Amazon is investing in is Rivian, an electric vehicle maker. Moreover, it has agreed to buy those cars. Amazon is also working with EO Charging to service its electric delivery trucks. It wants to electrify 100,000 vehicles by 2030, and it inked a three-year deal in March 2020 with EO to provide its services. Already, EO is servicing 5,000 charging stations for Amazon.

The transportation sector is responsible for roughly 28% of the CO2 releases in the United States. As a company with vans and trucks traversing the roads, Amazon wants to cut those emissions. It has also invested in Infinium, which converts carbon dioxide and hydrogen feedstocks into net-zero carbon fuels for use in today’s air transport, marine freight, and heavy truck fleets.

It uses CO2 and hydrogen as raw ingredients to create liquid fuels. It allows Amazon to utilize its present infrastructure. Still, it is not extracting fossil fuels. It uses captured carbon. And it is working on green hydrogen — a zero-emissions energy source that relies on wind and solar power to create a pure hydrogen source to turn that into electricity through electrolysis.

“If we can de-carbonize our delivery fleet, then others can do likewise,” says Peterson. “If we lead by example, we can influence others.” 

Pricing Power 

According to BloombergNEF, 137 companies in 32 countries bought green energy using power purchase agreements. Technology companies are the most active. In 2021, Amazon was the biggest buyer globally, announcing 44 offsite power purchase agreements in nine countries, totaling more than 6,000 megawatts. Altogether, it has 14,000 megawatts. Microsoft, Meta, and Google followed. 

As part of Amazon’s overall effort, it wants to run all of its operations with renewable energy by 2025. Its wind and solar plants are enough to power 2.5 million homes or 10,000 megawatts. Among the new projects are 11 in the US, including the first solar projects in Arkansas, Mississippi, Pennsylvania, and Canada. It also has renewable energy projects in Spain and Finland. 

Amazon now has 232 renewable energy projects around the world. That comes to 85 utility-scale wind and solar projects and 147 solar rooftops on facilities and stores worldwide.

“It is no longer a matter of whether corporate clean energy procurement will grow each year, it’s a matter of how much,” says Kyle Harrison, head of sustainability research at BloombergNEF. “More corporations are making new sustainability commitments, costs for renewables are plummeting and regulators around the world are slowly coming around to the fact that clean energy might be a silver bullet in the decarbonization of the private sector.”

Power purchase agreement prices for wind and solar power are also competitive with other resources, adds Deloitte Insights. In 2021, the weighted average for such agreements was $31 a megwatt/hour for solar and $37 a megawatt/hour for wind. That compares to a weighted average wholesale electricity price of about $34 a megawatt/hour. In many cases, it adds, it costs less to build wind and solar plants than it does to continue running coal plants.

Amazon is also part of the Science Based Targets initiative. A science-based target is when a company sets its personal goals in line with the best available science to limit global temperature increases to less than 2 degrees Celsius from the pre-industrial era. Roughly 400 companies use the standard, including Xerox Corp., Wal-Mart Stores, and Dell Technologies.

“It is becoming increasingly clear that corporations such as Amazon see solar and other renewable resources as the path forward to meet their energy and business needs, and we stand ready to support Amazon and other companies of all sizes in their decisions to go solar,” says Abigail Ross Hopper, chief executive of the Solar Energy Industries Association.

Being environmentally aware is part of tech sector’s ethos. But those innovators are also driven to reduce energy and transportation costs. That is why they invest in renewable energy plants and long-term power purchase agreements. Amazon’s leadership role is evidence — a company leveraging its market power to create economies of scale so that other businesses can also benefit.