Google, Facebook and Microsoft Corp. — three of the world’s largest corporate clean energy buyers — are sounding the alarm that a nearly $4 billion Warren Buffett-backed renewable energy project being proposed in Iowa isn’t necessarily in the best interests of customers, including them.
If approved, it would become the largest wind farm complex in the entire country by the end of 2024, producing enough electricity for more than 700,000 households. MidAmerican Energy, a utility owned by Buffett conglomerate Berkshire Hathaway Inc., has asked state regulators to approve conditions, including a guaranteed return of 11.25%, before beginning construction on a project. which it says will aid in its efforts to reduce carbon emissions by 75% compared to 2005 levels.
But the big tech giants that operate data centers in the state warn that the project, called Wind Prime, could drive up electricity costs. MidAmerican, they say, should consider alternatives. “We are concerned that the current Wind Prime proposal is not in the best interests of energy customers,” Corina Standiford, a spokeswoman for Google for Alphabet Inc., said in an email.
The battle is important to watch as it shows the increasing influence of tech giants on the energy transition. Tech companies have pushed utilities in other parts of the US to offer more clean energy options as they try to clean up the energy resources for their energy-intensive operations. And because they buy so much power, the utilities often listen to them.
“The scale at which these companies are buying green energy is huge,” said Kyle Harrison, an analyst at BloombergNEF. As tech companies have become increasingly larger consumers of renewable energy, they have also become more sensitive to its costs, he said.
In addition, companies aiming to decarbonise the grid want to be more strategic about when, how and where clean energy sources are deployed. Google and Microsoft have committed to making their entire operations 24-hour carbon-free by 2030. Facebook says it is buying enough renewable energy to fully power its operations around the world.
MidAmerican, based in Des Moines, proposed the project in January, with a sweeping plan for approximately 2,000 megawatts of wind power and 50 megawatts of solar power. The company — which gets about 58% of its energy in Iowa from wind and 42% from coal, nuclear and other sources — said Wind Prime is a key part of the company’s goal of achieving net-zero emissions.
MidAmerican asked regulators to approve the project in late October so it could qualify for $1.8 billion in federal renewable energy credits.
Facebook, which also buys large amounts of power to run data centers in Iowa, referred to the proposed project in a joint regulatory filing with Google as an “extremely expensive, massive increase in the generation that MidAmerican has not shown is necessary.” Last month, Microsoft filed its own petition with the Iowa Utilities Board, saying it plans to join the tech customer coalition.
Facebook Parent Meta Platforms Inc. and Microsoft declined to comment beyond their submissions.
Of course, pushing back the tech giants doesn’t necessarily mean they won’t end up backing it — or buying its power when it comes to fruition. Any multi-billion dollar power plant project will no doubt lead to some back and forth, even heated discussions, between customers, environmental and consumer groups, and others. Regulators can approve, request changes, or reject the terms proposed by MidAmerican for the project.
Standiford, Google’s spokeswoman, said the company is committed to running its Iowa data center — one of the company’s largest — on 100% carbon-free power and supporting “new, cost-effective sources” of clean energy.
“We are actively working with regulators and MidAmerican to ensure the right investment for Iowa,” she said.