Microsoft agreed 15-year PPAs for 500 MW of solar and wind capacity at $30/MWh, joining peers in a combined $3 trillion scramble to secure power for expanding data centers. These agreements will raise Microsoft’s energy costs by $200 million annually to meet a projected 20% surge in data center electricity demand.
Microsoft negotiated two 15-year power purchase agreements totaling 500 MW of renewable capacity at an average price of $30 per MWh. The deals source power from a 300 MW solar farm in Texas and a 200 MW wind project in Oklahoma, targeted at its new East Coast and Midwest data centers.
The agreements are expected to add approximately $200 million to annual energy expenditures, supporting a 20% rise in electricity demand driven by planned cloud infrastructure growth. This increase could compress operating margins in the near term as energy becomes a larger share of data center costs.
Microsoft joins other mega-cap tech firms with a combined market value of $3 trillion in securing long-term power amid grid constraints and rising demand. Securing reliable electricity is critical to avoiding rate hikes or expansion delays across its global data center footprint.
