Amazon is Betting Billions on Carbon-Free Data Centre Power

For the fifth year running, BloombergNEF has ranked Amazon among the world's leading corporate purchasers of carbon-free energy.

By the research firm's reckoning, Amazon now holds the largest such portfolio of any company in the global economy.

The numbers behind Amazon's renewable energy procurement are impressive.

The world's largest online retailer has committed to developing more than 40GW of total carbon-free energy capacity across more than 700 projects in 28 countries.

That portfolio comprises utility-scale solar and wind farms, offshore wind installations, on-site solar, battery storage and a fast growing nuclear footprint.

Kara Hurst, the firm's Chief Sustainability Officer, says that Amazon's investments in clean power go beyond securing power for the company's own operations.

"When companies like Amazon invest in new carbon-free energy projects, we're not just helping to power our own operations," she explains, "we're adding brand-new sources of carbon-free energy to the power grid that everyone uses – the same grid that powers homes, hospitals, and schools."

Amazon says the combined capacity of its energy portfolio is now sufficient to power the equivalent of more than 12.1 million American homes, though the more relevant figure for Amazon itself is what it means for the energy-hungry data centres that are increasingly central to its cloud computing and AI businesses.

The growing prominence of nuclear energy

Perhaps the most consequential development in Amazon's energy strategy is its deepening commitment to nuclear power.

Amazon is specifically interested in small modular reactors (SMRs) which produce nuclear energy at a smaller scale. 

In Washington state, Amazon has agreed with Energy Northwest to fund the development of four advanced SMRs with an initial capacity of 320MW.

Eventually, it will be possible to expand the capacity of these reactors to 960MW, which Amazon says is enough to power more than 770,000 homes.

The first units are not expected to come online until the early 2030s.

In the meantime, it is likely that SMR technology will have matured into a far more scalable, commercial solution.

Elsewhere, Amazon has also invested US$500m in X-Energy, a reactor developer, with a target of bringing more than 5GW of new nuclear capacity online in the US by 2039.

Maria Korsnick, who is President and CEO of the Nuclear Energy Institute, believes that nuclear energy could play an important role in powering the digital infrastructure of tomorrow. 

"Nuclear energy is the nation's largest source of clean electricity, providing reliable baseload power essential to meeting our energy goals," he says.

"As electricity demand continues to grow due to AI and data centres, corporate investments in nuclear technologies like small modular reactors are critical to fuelling innovation while reducing emissions."

Whether SMRs will deliver on schedule and at projected cost remains an open question, but the current wave of enthusiasm for the technology shows that companies regard it as a genuine solution for the future.

Solving the intermittency problem

The largest part of Amazon's vast renewable energy portfolio is made up of solar and wind.

While these power sources are cheap and effective, they have one big issue: intermittency.

In other words, solar and wind cannot produce energy 24/7, simply by virtue of the fact that the Sun does not always shine and the wind does not always blow.

To address this issue, Amazon is investing heavily in a number of energy storage projects.

To date, Amazon has 11 utility-scale battery projects, though the company hopes to procure many more in the coming years.

At its Baldy Mesa solar installation in California's Mojave Desert, the company is currently deploying a piece of AI-driven software that analyses up to 33 billion data points annually to determine when to store and release energy based on live grid conditions.

That combination of digital and physical technology could help Amazon to smooth out supply during moments of peak demand, such as heatwaves, when the demand for air conditioning goes into overdrive.

Grid infrastructure and community impact

Amazon believes that its investments in clean energy are not only beneficial to its own operations but to regional grid infrastructure and the communities that use those systems.

In Mississippi, for instance, Amazon has a partnership with a utility company called Entergy to develop 650MW of new renewable energy capacity.

Beyond that, however, Amazon is also contributing to Entergy's US$300m "Superpower Mississippi" grid reliability campaign, which aims to reduce outage frequency for residential customers by around 50%.

Ray Long is the President and CEO of ACORE, a non-partisan clean energy organisation.

He believes that deals like the one between Amazon and Entergy are hugely significant for national energy security and sustainability.

"Corporate renewable energy procurement has become one of the largest drivers of new carbon-free energy projects in the US," he says.

"Companies like Amazon that commit to long-term power purchase agreements provide the financial certainty that enables developers to build new renewable generation at scale – helping to meet America's growing electricity demands while establishing economies of scale that benefit all communities by adding low-cost carbon-free energy to the grid."

Efficiency on the inside

Amazon also points to improvements in how efficiently its data centres are using energy right now.

The Seattle-based firm currently had a global Power Usage Effectiveness (PUE) score of 1.15 in 2024 – a metric where a score of 1.0 would represent perfect efficiency, meaning no energy wasted on cooling or other ancillary systems.

Amazon says that this figure outperforms both the public cloud computing industry average and typical on-premises enterprise data centres, though independent verification of such claims is difficult.

On water usage – a growing concern as data centre cooling demands intensify –  Amazon had a Water Usage Effectiveness figure of 0.15 litres per kilowatt-hour in 2024.

That is a 17% improvement on its 2023 score.

Amazon says that many of its data centres only require water-based cooling for less than 5% of the year.

"Amazon is committed to maximising energy efficiency across our global operations, including our data centre network, electric delivery fleets and hundreds of fulfilment centres," Kara says.

Making good on these commitments will will depend heavily on whether its investments in carbon-free energy pay off in time.