Microsoft tempted to hit the gas as renewables can't keep up with AI

Microsoft says there is plenty of wind and solar to power datacenters in the US, but it is still eyeing natural gas generation as it juggles the growing energy needs of AI with its own net-zero commitments.

The Redmond tech biz has continued to pour investment into scaling up its infrastructure to support AI. President Brad Smith said in January that it would spend $80 billion this year on what he called a "golden opportunity."

The rapid expansion of bit barns from Microsoft and others has, however, created problems in accessing enough energy to power them all, coupled with warnings that their energy requirements could expand 160 percent by 2027, exceeding the ability of utility providers to keep pace.

At the CERAWeek Global energy conference in Houston this week, Microsoft indicated there was plenty of potential for wind and solar expansion in the US, but conceded it is "open" to deploying natural gas with carbon capture technology to meet its energy requirements.

According to separate reports, VP for Energy Bobby Hollis said renewables have an important role to play in the energy supply mix, at least for places where this makes sense - in states where there is plenty of sunshine or wind for electricity generation.

However, he also claimed that Microsoft has "always been cognizant" that fossil fuels would not disappear as fast as everyone hoped, that renewables alone are not enough to meet the needs of datacenters, and that the company sees natural gas as the near-term solution to meeting its energy needs.

In this, Hollis was following the lead of US Secretary of Energy Chris Wright, who earlier in the week delivered a speech at the same event promoting natural gas for generating electricity and criticizing the Biden administration's "irrational quasi-religious policies" on climate change.

"The Trump administration will treat climate change for what it is, a global physical phenomenon that is a side effect of building the modern world," Wright said, claiming that "everything in life involves trade-offs," and noting that he has been called a climate change denier.

Microsoft previously thought differently. It made commitments in 2020 to be carbon negative by 2030, meaning the company would remove more carbon from the atmosphere than it emits.

The company was reiterating its commitment to this as recently as last December, when it posted a blog on its "bold commitment and progress." This states that by 2025, "Microsoft aims to power its datacenters and operations with 100 percent renewable energy."

The latter seems to have gone out the window if Hollis is talking of using natural gas to power bit barns. The company had in any case disclosed last year that it actually increased its CO2 emissions by nearly 30 percent since 2020, mostly from the construction and provisioning of more datacenters to meet AI demand.

At the time, Hollis argued that AI's benefits will outweigh its environmental impact, stating: "We fundamentally believe that the answer is not to slow down the expansion of AI but to speed up the work needed to make it more environmentally friendly."

For context, Microsoft isn't the only datacenter operator turning to fossil fuels to help keep the lights on. Last year, Schneider Electric advised that on-site deployments of gas-powered turbines were the best short-term answer for bit barns to cover any shortfall in supply from the electricity grid.

Also last year, it was even revealed that the need for energy to drive those bit barns is prolonging the life of coal-fired power plants in some areas of the US. ®