- The company plans to work with power companies and public commissions to set rates high enough to cover data center electricity costs, including expansions, additions, and active use. “Our goal is simple: to ensure that the cost of electricity to service data centers is not passed on to residential customers,” Smith emphasized. For example, the company supports a new rate structure in Wisconsin that would charge a class of “very large customers,” including data centers, the actual cost of the electricity needed to provide the service.
- It will work “early, closely and transparently” with local power companies to add power and supporting infrastructure to the existing grid as needed. For example, Microsoft has contracted with the Midcontinent Independent System Operator (MISO) to add 7.9GW of new generation to the grid. That’s “more than double our current consumption,” Smith said.
- The company plans to explore ways to make data centers more efficient. For example, experiments are already being conducted using AI to improve planning, extract more power from existing infrastructure, improve system resilience, and accelerate the development of new infrastructure and technologies (such as nuclear power).
- Advocates for state and national public policies that ensure affordable, reliable, and sustainable electricity access in neighboring communities. Smith said Microsoft had previously set priorities for power policy advocacy, but “progress has been uneven. This needs to change.”
Microsoft is similarly proactive about water use in its data centers, committing to four steps:
- Reduce the total amount of water used in data centers, starting with a 40% improvement by 2030. The company is exploring innovations in cooling, such as closed-loop systems that recirculate coolant. It will work with local power companies to plan water, wastewater and pressure needs and “fully fund” the infrastructure needed for growth. For example, in Quincy, Washington, Microsoft helped build a water reuse facility that recirculates cooling water to maintain limited potable water supplies.
- Replenish more water than you use. This means returning a “measurable amount” of water to the same district where it was used, while helping local communities improve their systems. For example, Microsoft is partnering with utilities in Nevada and Phoenix on leak detection efforts to increase the total available water supply by locating leaks and preventing water loss. In the Midwest, we are supporting the restoration of the historic Three Bow Wetlands, which naturally recharge groundwater.
- Increase local transparency and help people understand their water usage. This includes publishing water usage data for each data center region and providing progress reports on replenishment.
- Advocate for public policies to minimize water use. Microsoft plans to support state and federal efforts to make reclaimed water and industrially recycled water the default data center water source.
“Our efforts ensure that our presence strengthens, rather than burdens, local water systems,” Smith said.
Clarification of primary design principles
But these goals are not new, said Matt Kimball, vice president and principal analyst at Moor Insights & Strategy. “These have been the primary design principles for some time,” he said. “Rather than stating a new strategic vision, Microsoft is making clear what it has always done for goodwill.”
Other major technology companies, such as IBM, are also committed to environmentally and socially responsible data center practices. However, Microsoft is strengthening its community-centric model of social and environmental responsibility, “which embeds stakeholder engagement and long-term social impact directly into its data center development strategy,” said Yaz Palanichamy, senior advisory analyst at Infotech Research Group.
Palanichami emphasized that major data center infrastructure expansions cannot be accomplished overnight. Whether these joint initiatives are implemented by Microsoft, Google, IBM, Amazon, Apple, Meta, etc., they result in long-term strategic success and meaningful alignment with the world’s dominant sustainable development principles. People, Earth, and Prosperity Philosophy is key, he noted.
He said it’s “uplifting” to see a technology leader like Microsoft playing an active role here. Small private technology organizations can then learn valuable lessons, adapt, and iterate. Overall, Palanichamy noted that organizations need to promote environmental stewardship through responsible energy and water use, while at the same time defining “realistic, measurable and achievable” sustainability metrics that can support, rather than complicate, long-term operational visions.
