Renewable energy challenges in APAC, from Amazon’s perspective
Renewable energy has been purported to be one of the saviors of humanity’s dastardly trampling of the Earth. The heavy utilization of technology requires energy to power processes — in great amounts. Prior to the Covid-19 pandemic, many organizations remained resistant to digital transformation, believing it could wait, with many still using on-premise data centers.
However, this delay has led to a flurry of unplanned and possibly, under-informed efforts to cater to the growing needs of a remote workforce affected by pandemic-fuelled movement restrictions.
According to a report by 451 Research (by S&P Global Market Intelligence; commissioned by AWS), organizations that move their business applications from on-premises data centers to cloud infrastructure in APAC can expect to reduce their energy use and associated carbon footprint by up to 78%.
Cloud computing needs renewable energy
If local energy markets enabled the sourcing of 100% renewable energy to power their operations in APAC, cloud providers would be able to reduce the emissions of workloads run in the cloud by another 15%.
However efficient and earth-friendly renewable energy is, it is still a challenge to obtain, especially within the APAC region.
Although cloud providers have more aggressive renewable energy goals, significant barriers still remain — primarily surrounding the low number of corporate renewable power purchase agreements (PPAs) executed here.
In the first of this multi-part series on cloud computing and renewable energy, Tech Wire Asia reached out to Ken Haig, Head of Energy Policy for Asia Pacific & Japan at AWS, to find out more about the challenges that APAC countries face with renewable energy.
According to Haig, APAC energy markets remain among the most challenging in the world for businesses seeking to source 100% renewable energy.
As of December 2020, according to BNEF, there have only been 75 off-site corporate power purchase agreements (PPA) in the APAC region to date, totaling 4,475 megawatts (MW).
This is in stark contrast to the 233 PPAs in Europe (14,087 MW) and 959 in the US (43,170 MW), where market conditions are more favorable.
Based on an IRENA report, corporate renewable energy investments are generally broken out into purchases of several elements.
These include energy attribute certificates (EACs), power purchase agreements (PPAs), green tariffs, and production for self-consumption.
Countries in APAC where most of these options are available are small at the moment. They are currently limited to Australia, Singapore, Japan, and South Korea (soon).
Amazon’s procurement strategy
When it comes to procuring renewable energy at Amazon, Haig shared that they follow specific tenets, and meeting these is one of the primary challenges that the company is focused on in APAC.
“At the top of the list comes our focus on additionality, which refers to our commitment to (where possible) purchase only renewable energy beyond the existing grid mix.
“We do this not only to support the development and construction of new renewable energy – that is, using the scale of our purchases to ensure greater renewable energy is available for our customers and partners as well, leaving a wide wake for others to follow.
“(but this is) also to ensure that we are able clearly to attribute the carbon reduction value of these renewable energy purchases to Amazon”, shared Haig.
Haig added that Amazon’s renewable purchases are “ultimately going towards our commitment under the Climate Pledge to measure and report greenhouse gas emissions on a regular basis”.
Traceability is also important to them, to ensure clear carbon accounting and reporting consistent with Scope 2 Emissions Guidance under the Global Greenhouse Gas (GHG) Protocol. As such, corporate renewable energy options that meet both their additionality and traceability tenets can be hard to come by in APAC.
Some of the challenges identified by Amazon’s partners in the Asia Pacific region—including the Japan Climate Leaders’ Partnership (JCLP) in Japan, and the corporate Renewable Energy Demand Enhancement (REDE) initiative in India—include following limited availability, regulatory complexity, and high costs.
In the second part of this series, Tech Wire Asia will explore how Amazon has approached these barriers to procuring renewable energy for their services.