Does Amazon Use 100% Renewable Energy?
Amazon has set ambitious goals of powering its global operations with 100% renewable energy by 2025 and reaching net-zero carbon emissions by 2040. However, while the e-commerce giant has made significant progress in ramping up its use of renewables, it has not yet reached full100% renewable energy usage across the board. Amazon still relies on fossil fuels for portions of its energy needs, especially for its transportation services. Though critics have pushed Amazon to move faster, the company contends it is making steady advances despite the challenges of its massive scale and energy appetite. This article will explore Amazon’s renewable energy commitments, analyze its current usage and remaining gaps, assess challenges to reaching 100% clean power, and look ahead at what it will take for Amazon to fully transition to sustainable energy.
Amazon’s Public Renewable Energy Goals
In 2014, Amazon first announced a long-term goal of powering its global infrastructure using 100% renewable energy (1). Specifically, this meant having renewable energy match the amount of electricity used by both its direct operations like fulfillment centers and AWS data centers, as well as the energy attributable to the manufacturing and transportation of products sold on Amazon (2). This ambitious pledge was made as part of the company’s Climate Pledge commitment.
According to Amazon’s public sustainability reports, this 100% renewable energy goal aims to be achieved by 2025 for its direct operations, and 2030 for the full life cycle emissions across its businesses (1). The timeline was moved up in 2015 to target 50% renewable energy use by the end of 2018, and 100% by the end of 2020 for Amazon’s direct operations. However, Amazon did not quite achieve these accelerated timelines.
Sources:
(1) https://sustainability.aboutamazon.com/climate-solutions/renewable-energy
(2) https://www.aboutamazon.com/news/sustainability/amazon-sets-a-new-record-for-the-most-renewable-energy-purchased-in-a-single-year
Progress So Far
As of November 2022, Amazon had reached 85% renewable energy across its operations (Amazon Sustainability, 2022). This represents a significant increase from previous years. In 2019, Amazon reached 42% renewable energy and in 2020 they hit 63% (Amazon News, 2023). Amazon’s renewable energy capacity also grew substantially, reaching 20.5 gigawatts in 2022 compared to 12.3 gigawatts in 2021 (CNBC, 2023). This allowed Amazon to generate 50,000 gigawatt hours of renewable energy in 2022.
Renewable Energy Usage by Division
Amazon breaks down its renewable energy usage across its various business divisions and facilities including AWS data centers, fulfillment centers and warehouses, Whole Foods Markets, Amazon Go stores, Amazon Books stores, and corporate offices.
The lion’s share of Amazon’s renewable energy usage comes from powering its AWS data centers. As of November 2022, AWS accounted for approximately 66% of Amazon’s total renewable energy usage.1 This makes sense given the massive amounts of electricity required to power AWS’s global infrastructure.
Amazon’s fulfillment network, including its warehouses and logistics operations, accounted for 26% of total renewable energy usage. The remainder came from other divisions like Whole Foods Markets (5%), Amazon Go and Amazon Books stores (2%), and corporate offices (1%).
As Amazon continues expanding its renewable energy portfolio, it aims to increase renewable energy use across all its divisions. However, AWS will likely continue accounting for the largest share due to its high electricity demands.
On-Site Renewable Energy
Amazon has installed on-site solar panels at many of its fulfillment centers and sort centers around the world. According to Amazon’s sustainability website, the company had installed solar systems at more than 130 fulfillment and sortation facilities globally by the end of 2021. This included rooftop solar installations at facilities in India, Australia, France, China and the United States [1].
Some of Amazon’s largest on-site solar installations are in the United States. For example, the company installed a 6.5 MW solar array at its facility in Chester, Virginia which generates enough renewable energy to power 560 homes per year [1]. Other major rooftop solar projects include a 3.8 MW system at a fulfillment center in California and a 2.6 MW array at a New Jersey facility [2].
In addition to rooftop solar, Amazon has installed a number of on-site wind projects to help power its facilities. This includes two 2.5 MW wind turbines at Amazon’s fulfillment center in Tilbury, UK [1]. Overall, while most of Amazon’s renewable energy comes from large off-site projects, the company is gradually expanding its on-site solar and wind capacity to help meet its sustainability goals.
Utility-Scale Offsite Renewable Deals
One of the main ways Amazon grows its renewable energy capacity is through significant utility-scale contracts for offsite projects. These large renewable energy facilities help increase the amount of clean energy available in the electricity grids that power Amazon’s operations.
According to Amazon’s sustainability website, the company has “contracted more than 6.5 GW of renewable energy capacity globally through over 50 projects.” The contracted capacity comes from a mix of utility-scale solar and wind farms.
Some of Amazon’s largest solar energy contracts have been with developers in the U.S., including:
– A 410 MW solar project with Recurrent Energy in Texas announced in 2017, which was the largest corporate solar deal at the time.[1]
– A 100 MW project with Shell Energy North America in Virginia in 2018.[2]
– A 150 MW project with Perpetual Energy in Ohio in 2019.[3]
Some of Amazon’s largest wind farm contracts have included:
– A 253 MW wind farm in Scurry County, Texas developed by Lincoln Clean Energy in 2017.[4]
– A 100 MW wind farm in Ireland developed by GE in 2017.[5]
– A 180 MW wind farm in Ohio by EDP Renewables in 2018.[6]
Renewable Energy Credits
Renewable energy credits (RECs) play a key role in Amazon’s renewable energy strategy. Amazon uses RECs to account for the clean energy generated by its renewable energy projects and match its electricity consumption (Amazon Sustainability). When Amazon builds or contracts an offsite renewable energy project, it retains the renewable energy certificates from that project. Amazon then redeems these RECs to cover its electricity usage within the same grid region.
According to Amazon’s renewable energy methodology whitepaper, the company uses RECs to “track and record the environmental benefits of renewable energy projects” (Amazon Sustainability). By retiring RECs, Amazon is able to make claims about powering its operations with renewable electricity. The use of unbundled RECs is an important mechanism enabling Amazon to expand its renewable energy footprint, even in regions where it lacks its own renewable energy projects.
Criticism and Challenges
Despite Amazon’s public commitments to 100% renewable energy, there appear to be gaps between their goals and actions. An April 2019 report from Greenpeace found that Amazon Web Services was only meeting 12% of its renewable energy commitment for its data centers. The report accused Amazon of abandoning its 100% renewable energy pledge as its energy demand has grown on the East Coast of the U.S.
Critics point out that while Amazon has invested in some large-scale renewable energy projects to help power its operations, the actual energy mix powering its data centers and warehouses includes non-renewable sources like gas and coal from public utilities. Amazon’s renewable energy usage claims rely heavily on the purchase of renewable energy credits to make up any shortfalls.
Some analyses have found discrepancies between the renewable energy powering Amazon’s operations versus their public claims and goals. This demonstrates potential challenges for Amazon in trying to rapidly transition its energy supply to 100% renewable sources as its operations expand globally.
The Path Ahead
Based on the current progress, Amazon still has significant work to do in order to reach its goal of 100% renewable energy by 2025. According to Amazon’s sustainability website, the company reached 65% renewable energy usage in 2020. While this demonstrates great progress in a short amount of time, Amazon will need to greatly accelerate its investments in clean energy to get to 100% in just a few years.
To achieve its ambitious goal, Amazon may need to build even more solar and wind farms to supply its energy-hungry data centers and operations. According to CNBC, Amazon already owns a majority of the internet’s renewable energy infrastructure. However, with the company’s rapidly growing electricity usage, simply maintaining 65% will require massive new renewable energy projects annually. Reaching 100% in a few years will likely require even greater investments and deals.
Amazon also faces the challenge of powering its transportation fleets and physical retail stores with renewables. While data centers can run directly on solar and wind power, ships, planes, delivery vans, and Whole Foods locations cannot. Amazon will need to explore emerging options like renewable hydrogen and biofuels to decarbonize these aspects and achieve its ambitious company-wide renewable energy goal.
Conclusion
In summary, Amazon has made significant progress towards using 100% renewable energy but still has more work to do. The company has pledged to reach 100% renewable energy usage for its operations by 2025 and 80% renewable energy by 2024. So far, Amazon has reached 65% renewable energy usage across its business divisions. This includes both on-site renewable energy projects at Amazon facilities as well as large-scale off-site wind and solar projects that generate renewable energy credits. While admirable, only about half of Amazon’s renewable energy usage currently comes from direct electricity consumption with the remainder coming from purchased renewable credits. Critics argue Amazon must focus more on direct renewable energy projects to fully move away from fossil fuels. Amazon’s commitment is a positive step but the company will need to continue executing its strategy and increasing on-site renewable energy projects to fully achieve 100% renewable operations in the years ahead.
