Nikkei recently reported that Amazon.com Inc was in Tokyo undergoing talks with Japanese power utilities and trading houses, with the aim of building an offshore renewable energy power plant that produces clean energy to be used by its data centres.
They further reported that this was a long-term investment designed to utilise the energy created from exclusive renewable power plants, with one trading house currently considering the possibility of supplying electricity to the internet-based company via an offshore wind farm. Whilst this does not yet exist, the trading house in question hopes to win a government auction that started last year.
Why Are They Making This Move?
In 2019, the Japanese government introduced a law that was designed to boost the progress of offshore wind farms, which allows operators to use designated sea zones for up to 30 years, creating space for companies such as Amazon to sneak in and buy up the designated zones for their own purposes.
In addition to this offshore wind farm, Amazon are also reportedly in talks to produce a solar power plant, underscoring their desire to use only clean energy by 2030 and reach net zero carbon emissions by 2040, according to the Nikkei.
The U.S based company issued its first sustainability bond, raising $2 billion for the purpose of investing in renewable energy, as well as greener buildings, affordable housing, and clean transport. Since their initial pledge, the company has managed to round up signatures from a variety of large companies – some of the biggest-known conglomerates in the world – in support of moving towards greener energy.
How Will This Affect Shares?
Slow to join the party with regards to investing in the renewable energy movement, Amazon’s CEO, Jeff Bezos, has reportedly bowed to pressure from workers demanding that he use his profits to support the fight against climate change as the company’s carbon emissions continue to grow exponentially.
Despite another 20 countries signing up to this agreement, there’s some speculation that, as a result of their embracing of renewable energy, Amazon’s share price may receive a positive effect. This in turn could lead to more interest on trading platforms in its shares. Part of Amazon’s infrastructure is built around investment and links with fossil fuel companies, including oil conglomerates and other purveyors of other ‘unclean’ energy sources.
Ongoing Concerns
Despite this pledge, and the seemingly renewed fervour of the Amazon CEO to fast-track the renewable energy used by the company, there are questions remaining for Amazon as a whole – particularly regarding its use of cloud computing and data centres, both of which consume vast amounts of energy to run, requiring data farms with a plethora of equipment used for this very purpose.
Add to this the company’s well-known use of couriers and delivery drivers to get their products to customers, and the proliferation of products that are not environmentally friendly, and the company still has a long way to go before they meet their target of net zero carbon emissions by 2040 – ten years earlier than the U.S Government’s climate pledge for net zero carbon emissions.
Where the company will go from here is currently unknown, however, so it can only be hoped that Amazon stick to their pledges and meet their aims in the timeframe outlined by Bezos.
