Amazon has taken a significant step towards powering its data centers with renewable energy, signing contracts with multinational utility Iberdrola to purchase 476 megawatts of wind and solar power in the Iberian Peninsula. This move is expected to support the company's growing infrastructure in the region, including new data centers planned in Spain.

Last May, Amazon announced a $17 billion investment in infrastructure projects, including data centers, in Spain. The company's power bill has been increasing rapidly as it adds data centers to meet the rising demand for AI and cloud services. This deal will help Amazon reduce its reliance on non-renewable energy sources and decrease its carbon footprint.

One of the projects Amazon is investing in is the Tâmega wind farm in Portugal, which is being built alongside a massive hydroelectric dam system. The complex consists of three dams, including an 880-megawatt pumped-storage dam. Pumped-storage facilities act as massive batteries, storing excess energy during off-peak hours and releasing it during periods of high demand. The 274-megawatt wind turbines being installed at Tâmega will feed power to the grid through the hydro complex's existing connection, and when there's excess energy, it can be used to pump water to the upper reservoir.

This hybrid installation ensures a consistent supply of power to the grid from intermittent renewable resources like wind and solar. Amazon is also purchasing a portion of the power from more typical wind and solar plants in northwestern Spain. The company was the largest buyer of renewable power last year, and this deal further solidifies its commitment to clean energy.

Tech companies have been driving the demand for renewable energy, driven by the rapid deployment and decreasing costs of wind, solar, and battery storage. Last month, Meta announced two large deals for solar power, while Microsoft and Google have previously committed to multi-billion dollar renewable investments. As the tech industry continues to grow, its reliance on renewable energy is expected to increase, driving innovation and adoption in the sector.

The shift towards renewable energy is not only beneficial for the environment but also makes economic sense for companies like Amazon. The cost of renewable energy has decreased significantly over the years, making it a competitive option with fossil fuels. Additionally, investing in renewable energy can provide a stable and predictable source of power, reducing the risk of price volatility.

As Amazon continues to expand its data center infrastructure, it is likely to continue investing in renewable energy projects. This deal sets a positive precedent for the tech industry, demonstrating the feasibility and benefits of transitioning to clean energy. With the increasing adoption of renewable energy, the industry can reduce its carbon footprint and contribute to a more sustainable future.