“Amazon to enter electricity trading”
When we first read the story in one of the leading newspapers in India, we were quite literally confounded. A US-headquartered retailer embarking on an electricity trading business?
As we delved deeper into the story, we got to know the nuances of the decision taken by the e-commerce giant.
Amazon Web Services, the cloud computing unit of Amazon and the most profitable subsidiary, has multiple data centers worldwide. These data centers contain IT equipment including servers, storage drives, network devices, and cooling systems. Their power requirement may go beyond 100 megawatts. For perspective, this much power is enough for approximately 90,000 homes in India.
Amazon not only targets meeting its energy needs for its global business units, but it also intends to be carbon neutral by 2040. As per its website, Amazon is the world’s largest corporate purchaser of renewable energy.
As of September 2022, the company boasts 18.5 gigawatts of total renewable energy, 379 renewable energy projects, and 154 utility-scale wind and solar projects worldwide.
Amazon has 1.6 gigawatts of green energy projects across Asian countries, including India, China, Indonesia, Japan, Singapore, and Australia.
The company established a subsidiary in India, ‘AEI New Energy Trading Private Limited’, on 23 September 2021 for the production, collection, and distribution of electricity and interstate trading of renewable energy. The subsidiary is holding a category-III trading license from Central Electricity Regulatory Commission that permits the firm to trade up to 4 billion units in a financial year.
Further, it is boosting its renewable portfolio in collaboration with local energy players. It is developing 720 megawatts of renewable energy projects with Amp Energy (100 MW), Brookfield Renewable (110 MW), ReNew Energy (210 MW photo voltaic farms), and Vibrant Energy (two wind-solar hybrid projects with total capacity of 300 MW).
