Amazon (AMZN 1.49%) grew its renewable energy portfolio by 8.3 gigawatts (GW) in 2022. That set the record for the most renewable energy purchased by a company. It brought the company's total portfolio to more than 20 GW, which is enough to power 5.3 million homes.
With those purchases, Amazon remains the largest corporate buyer of renewable energy, a title it has held since 2020. The company continues to make new investments, positioning it to achieve its renewable energy goal well ahead of schedule.
Another record year
Amazon secured 133 new renewable energy projects across 11 countries last year, setting another record for securing new energy projects. They run the gamut. It continues tapping into one of the world's best renewable energy resources by securing new offshore wind projects in Europe. The company also added its first on-site solar project at the Amazon Air Hub in California. Meanwhile, it's supporting the development of three wind-solar hybrid projects in India.
These new additions grew Amazon's portfolio to 401 projects across 22 nations, including 164 wind and solar farms and 237 rooftop solar projects attached to its facilities. Once all these wind and solar energy projects enter service, they'll have the capacity to generate 56,881 gigawatt-hours of clean power each year. Most projects supply electricity to the grid, which Amazon buys to power its data centers, fulfillment centers, and physical stores.
The company is now on pace to power 100% of its operations with renewable energy by 2025. That's five years ahead of its original target.
Thinking outside the box to accelerate its strategy
Amazon is working with several developers and operators to achieve its climate goals. It's also using innovative deal structures to help accelerate renewable energy development. For example, the company partnered with Brookfield Asset Management, which chose Amazon Web Services as its preferred cloud provider last year. That deal will accelerate Brookfield's digital transformation, enabling it to modernize its technology infrastructure, optimize operations, and boost its innovation. In addition to that agreement, Brookfield's subsidiary, Brookfield Renewable, agreed to provide Amazon with an additional 601.6 megawatts (MW) of wind and solar energy from projects in Europe, North America, and India.
That agreement enhanced the strategic relationship between Brookfield and Amazon. In 2021, Brookfield Renewable signed a strategic collaboration agreement to develop renewable energy projects supported by power purchase agreements with Amazon that will help it achieve its climate goals. These agreements also enable Brookfield to advance its enormous pipeline of renewable energy projects.
Good for the environment and shareholders
Amazon is helping accelerate the global transition to cleaner power by supporting projects from developers like Brookfield. It's playing a pivotal role in getting projects off the ground that will be crucial to the future. For example, renewable hybrid systems in places like India will help accelerate that country's decarbonization by lowering energy costs. The hybrid system maximizes clean energy production to reduce variability and address a fundamental critique of renewable power.
Meanwhile, many of these developments will supply Amazon with clean energy at fixed rates set by the power purchase agreements, giving it visibility into its future energy costs. That's important given the amount of power it uses, especially at its data centers. By locking in prices, Amazon can keep expenses at bay, benefiting its bottom line. In addition, the company is winning incremental business by signing strategic partnerships with companies like Brookfield to help them with their digital transformation initiatives as they assist others with decarbonization, creating win-win partnerships.
Over the long term, Amazon's renewable energy strategy should create value for shareholders by keeping energy costs down and driving incremental business. Because of that, its continued success in executing this strategy is a big positive for investors.
