Procuring 60 megawatts of distributed solar could be less risky than developing a centralized plant.
A bid by tech giant Microsoft to become the largest distributed solar offtaker in Singapore sounds ambitious. But it could actually be safer than buying a utility-scale project, according to Brian Janous, Microsoft’s general manager of energy.
Earlier this month, Microsoft announced plans to procure 60 megawatts of solar energy in Singapore.
Speaking to The Interchange podcast this month, Janous told GTM that plans to source that capacity from rooftop solar would not be as risky as trying to get the whole amount from a single plant.
“There is a small amount of volume risk,” he said. “But what you don’t have is the risk that the entire project doesn’t get developed. We’ve had other projects that have had challenges related to permitting issues that may put in jeopardy 100 percent of the output.”
“With this one, because it is distributed, in some ways you reduce that development risk. You might have slightly more uncertainty — is it going to be 60 megawatts or 58 megawatts? But you’re distributing some of that exposure you have in traditional development projects,” explained Janous.
In the Interchange interview, Janous also talked about Microsoft’s outlook for battery storage and pairing renewable energy directly with localized demand at facilities around the world.
The procurement agreement, with Singaporean PV developer Sunseap Group, marks Microsoft’s first clean energy deal in Asia and will create the largest solar portfolio in Singapore to date, Microsoft said.
The build-out, which will span “hundreds of rooftops across the nation,” according to Microsoft, is also said to be the first rooftop solar portfolio in the country focused on serving data center energy consumption.
“Our cloud services are helping to power Singapore’s digital transformation, and today’s agreement will ensure that transformation is increasingly powered by clean energy,” said Kevin Wo, managing director of Microsoft Singapore, in a press release.
Microsoft, which has more than 850 employees in Singapore, will not own the solar plants itself, said Janous. Instead, it will buy 100 percent of the energy produced by solar plants built, owned and operated by Sunseap, over a 20-year period.
Microsoft was forced to look at distributed generation because there was simply not enough space for utility-scale projects in Singapore, Janous said. “We were really limited to just looking at what is available, and in Singapore it’s rooftops,” he commented. “That was the only clear route we had to get to a material amount of energy.”
Another problem for Microsoft was that it needed much more space than could be found on its own buildings. Microsoft’s data centers are about the size of a Walmart Supercenter, said Janous, but “we’re consuming 10 to 20 times the amount of electricity.”
The amount of energy that could be generated on Microsoft’s data center rooftop space in Singapore would only serve the adjacent offices, he said. The company’s Singapore data centers deliver Microsoft Azure, Office 365 and numerous other cloud services for customers.
The deal is Microsoft’s third international clean energy announcement, following two wind deals announced in Ireland and the Netherlands in 2017.
Once operational, the new solar project will bring Microsoft’s total global direct procurement in renewable energy projects to 860 megawatts, said Christian Belady, general manager for cloud infrastructure strategy and architecture at Microsoft.
The Singapore deal puts Microsoft on track to power 50 percent of its global data center load with renewable energy this year, he added.
The contract is also a major coup for Sunseap, which in January signed a 21-year power-purchase agreement for 4 megawatts of generation with port operator PSA, and has assets including a 140-megawatt solar farm in India and a 10-megawatt PV project in Cambodia.