Salesforce.com, Inc. (NYSE:CRM) has entered into a virtual wind power purchase deal that will see it buy 125,000 MW/h of electricity annually for its West Virginia data center. Save for it being a virtual power purchase agreement, the deal is reminiscent of renewable energy investments by Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and Apple Inc. (NASDAQ:AAPL).
Details are currently scant about which provider Salesforce is buying the wind power from and where exactly the project is located. However, it is understood that the virtual power purchase deal means that Salesforce will not directly use the wind power in its data center. Instead, the power will be injected into the local grid that serves the company’s West Virginia data center.
Wind power broker format
The agreement calls for Salesforce.com, Inc. (NYSE:CRM) to buy 250,000 MW/h of wind electricity from the undisclosed provider at a fixed price over a period of 12 years. It will be like Salesforce buying the wind power at a wholesale price and selling to utilities that supply power to its data center.
The reason Salesforce.com, Inc. (NYSE:CRM) has been forced to enter a virtual power purchase deal is that the company doesn’t own the data centers it uses. Instead, it rents space from commercial data center operators. That makes it difficult for the company to directly wire solar or wind power to run its data centers. However, the virtual power purchase agreement allows the company to reduce the amount of unclean energy credited to its data centers.
100% clean energy operation
Salesforce is in the process of converting all its operations to clean energy at an unspecified date. However, the company targets to make its footprint be carbon neutral by 2050.
The renewable energy investment format that Salesforce.com, Inc. (NYSE:CRM) has adopted is different from that used by Alphabet, Apple and techs investing in clean energy. For the most part, Amazon and Apple invest in clean power projects that directly impact their operations.
Tackling adverse climate changes
Regardless of the strategy used, Salesforce.com, Inc. (NYSE:CRM)’s move adds to the efforts to ditch unclean energy for clean energy. Adoption of renewable power from sources such as wind, solar and fuel cell are important in controlling adverse climate change. A recent climate convention in Paris, France, adopted more robust measures to reduce global warming.