For the first time Microsoft is buying a wind energy company to help power a data center in San Antonio

Microsoft announced that it has entered a deal to buy 110 MW of wind energy from a wind farm that will be located just outside of Forth Worth, Texas, and will be connected to the power grid that supplies power to Microsoft’s San Antonio datacenter.

The wind farm — called the Keechi Wind project — will be owned and operated by RES Americas and will go under construction next year (with power flowing in 2015).

The wind farm will use 55 wind turbines made by Vestas and Microsoft is buying the power through a 20-year contract called a power purchase agreement.

“We have a long standing ambition to move in the direction of sourcing more clean energy as a company, so over the last few years we’ve increasingly purchased something called RECs – renewable energy credits (more than 2.3 billion kWh globally) – and so this is an opportunity to go to the next stage and invest directly in green energy,” says Rob Bernard, Microsoft’s chief environmental strategist. He sees Keechi as a “moment in our journey” that includes an increased focus and acceleration in the direction the sustainable energy strategy the company has pursued over the last several years.

“When influential companies such as Microsoft sign up to buy wind power, it sends a strong signal on the importance of taking meaningful action on sustainability,” says Susan Reilly, president and CEO of RES Americas, the energy developer behind the Keechi project, and chair-elect of the board of the American Wind Energy Association (AWEA). “By signing a contract to buy power from the Keechi Wind project, Microsoft is making the financing, construction, and operation of this 110 megawatt project possible. To be clear: it would not have happened otherwise. The Texas electrical grid is like a pool, and Microsoft is adding clean, green wind power to that pool.”

It takes about one megawatt (MW) of energy to power 500 Texas homes on the same electric grid as Microsoft’s San Antonio datacenter. In an area 70 miles northwest of Ft. Worth, construction begins in December to build the Keechi Wind project. This power purchase agreement represents a sizable investment in the wind energy sector in Texas – which has a strong wind resource and has invested in building out its transmission infrastructure to improve integration of these resources into the broader grid. Texas has more installed wind capacity than any other U.S. state, with a total of 12.2 gigawatts of capacity. Wind energy is the source of 9.2 percent of all electricity generated in Texas.

“All of the electricity we consume is from the power grid, through local utilities, which includes a mix generation resources including hydro, natural gas and wind,” says Brian Janous, director of energy strategy at Microsoft’s Global Foundation Services. “This project gives us a stake in putting more renewable power in the grid. We’re not having this power delivered directly to us. We’re going to continue to consume power as we always have for our buildings and datacenters — but we’re affecting the mix of generation, adding 110 MW of green power that wouldn’t have been there otherwise and displacing carbon fuels. We’re driving change in the generation mix on the grid in Texas.”

Microsoft is driving change in many other ways, too.

This past year Microsoft began building a pilot datacenter in Cheyenne, Wyoming that will run completely independent of the grid from energy generated from biogas, a byproduct of a nearby water treatment plant. Another datacenter in Dublin, Ireland, has implemented a thermodynamic cooling process that happens without loss or gain of heat, which reduces energy costs per megawatt by up to 30 percent. Microsoft is also retrofitting existing datacenters to be more efficient with harder-working, lower-energy servers, compressor energy reduction and custom light-emitting diode (LED) lighting.

An internal carbon fee — which Microsoft charges to business groups based on their output of carbon, primarily through electricity and air travel – helps fund these projects and the Keechi Wind project. The fee is the cornerstone of Microsoft’s commitment to carbon neutrality. The funds generated from the carbon fee are used for investing in energy efficiency projects, carbon offsets and for the direct purchase of renewable energy.

Microsoft offset more than 300,000 metric tons of CO2 emissions through that growing portfolio of innovative carbon-offset projects in 2013, and purchased 2.3 billion kilowatt hours (kWh) of renewable energy in 2013— more than twice the amount bought the previous year. This year, the Environmental Protection Agency recognized Microsoft as the second largest purchaser of green power in the U.S. And when Microsoft pledged to become carbon neutral in fiscal year 2013, the National Resources Defense Council (NRDC) validated that the company made good on its promise.

Bernard says Microsoft has spent a little more than two years rethinking its own infrastructure – the “smart buildings” concept captured in the “88 Acres” story. “Let’s use ourselves as an experiment to see what’s possible. We spent time and focused on our campus. Now we’re taking what we’ve learned from our own experiences to Seattle and CityNext. Now we’re going to the next level — can we help our customers save energy as well?”

One way customers can reduce their energy use is by transferring from on-premise installations to cloud computing, Bernard says. At the very least, that transfer causes a 30 percent energy reduction, up to a best case scenario of 90 percent, depending on an organization’s size, efficiency and what product lines they’re using.

“Public support for renewable energy is strong and growing. Consumers are more aware than ever of the harmful effects of carbon pollution and the role renewable energy can play in reducing these impacts. They want the electricity that powers their lives to be green,” Reilly says. “RES Americas and other companies have long been selling power from wind projects to electric utilities. Selling directly to companies that use a lot of energy, such as Microsoft, is an important trend in the industry, and we expect to see more deals like this.”

The physical manifestation of this deal will start appearing in December. Like a lot of things in Texas, these wind turbines are big. Looming nearly 312 feet in the air – that’s the same as a 29-story high-rise building – one rotor on these wind turbines measures 328 feet in length – a few stories higher than the shaft it’ll rotate around. Each turbine will generate about 2 MW a piece.

And because each part has to be trucked in and assembled there, it’s going to take the better part of 2014 to get those 55 wind turbines going. But even before all 55 are all operational, they’ll start generating power.

“If you look at the company strategy overall, it’s across three areas: demonstrate responsible environmental leadership, enable energy efficiency both in and through the use of information technology, and accelerate scientific development,” Bernard says. “So when we look at something like Keechi, in the context of that framework, it’s part of a portfolio of activities that are happening in our datacenter division aimed at improving efficiency, lessening our power supply, and greening it when possible.”