Why is Hewlett Packard harnessing wind power?

Hewlett Packard is the latest in a string of companies to buy into renewable energy this year.

The IT company announced a 12-year contract on Tuesday to buy 112 megawatts from a wind farm in Texas being developed by SunEdison. The wind energy is enough to operate all five of HP’s Texas-based data centers, and is the equivalent of powering 42,600 homes annually, eliminating the emission of more than 340,000 tons of carbon dioxide each year.

The agreement will allow HP to reach its 2020 operational greenhouse gas (GHG) emissions reduction goal by the end of fiscal year 2015, five years ahead of schedule, a benchmark the company was well on its way to achieving already. According to a report issued by the company, in 2014, HP’s worldwide operations contributed about 1.7 tons of greenhouse gas emissions. By contrast, the company’s emissions were roughly 17 percent higher in 2010.

The data centers in Texas, which cover approximately 1.5 million square feet of ground, support HP's entire internal IT requirements worldwide and deliver IT services to a portion of HP customers. The data centers are located in Houston, Hockley, Plano, and there are two in Austin.

This is the first utility-scale renewable energy purchase by HP, and is part of the company’s strategy to develop sustainable cloud-based technology, which would include its servers and the data centers like the ones in Texas. Ultimately, HP says it aims to increase the amount of renewable energy available as a power supply to all customers on the grid. 

The purchase follows several major developments and deals in the now booming renewable energy sector in the US. In February, Kaiser Permanente announced a 20-year contract to buy 153 megawatts of wind and solar power from two California farms. A month later, Dow Chemical said that it would buy 200 megawatts of wind power in Texas, according to The New York Times. Earlier in July, Warren Buffett’s Berkshire Hathaway proposed two 20-year fixed-rate solar energy contracts from solar projects in Colorado and Nevada; the Nevada deal would provide the cheapest energy in the world at 3.87 cents a kilowatt-hour, according to analysts. In July, Amazon Web Services announced a contract with Iberdrola Renewables to build and operate a 208-megawatt wind farm in North Carolina, the state’s first at utility scale.

Also in July, the Obama administration announced a plan to triple the renewable energy capacity in federally subsidized housing by 2020, as well as plans to make wind and solar energy more accessible to low- and middle-income households.

Renewable energy is attractive to companies like HP not just because green initiatives are good publicity or make for happier shareholders who are concerned about acting on climate change. Analysts confirm that energy sources like wind and solar are not as vulnerable to market fluctuations as fossil fuels are. Once a company buys into renewable energy, the cost of paying for the utility over time is lower. 

HP's deal with SunEdison was not easy to pull off, Gabi Zedlmayer, chief progress officer of the company, said in an interview with The New York Times.

“Environmental considerations figure into all of our I.T. and real estate decisions that we’re making,” she said in the interview. “It’s still rather a complex process over all — you know, we can’t just go and purchase the energy that we want. To get to this type of an agreement, this has taken us the better part of a year.”