Increasing renewable energy

In 2012, IBM contracted with its utility suppliers to purchase 499 million kWh of renewable energy over and above the quantity of renewable energy provided as part of the mix of electricity that we purchased from the grid. The 499 million kWh represented 9.8 percent of our global electricity usage and resulted in the avoidance of 212,000 metric tons of CO2 emissions. In addition, more than 5 percent of IBM’s electricity purchases from the grid were electricity generated from renewable sources -- bringing our total renewable energy purchases to approximately 15 percent of our consumption in 2012.

IBM continued to contract for defined renewable energy purchases in Australia, Austria, Belgium, Denmark, Finland, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, the United Kingdom and the United States in 2012. We have at least two data center facilities located in each of these countries and these data centers receive some or all of their electricity from renewable energy purchases.

Our procurement of renewable energy must meet our business needs. Not only should the cost be competitive with market prices over time, but the energy must also be consistently reliable to ensure uninterrupted power for our critical operations. IBM’s strategy of contracting for defined renewable energy has been successful in Europe and we continue to request the inclusion of electricity generated from renewable sources as an option in our contracts in all geographies.

Currently, due to limitations in the market regulatory and procurement structures and in the distribution infrastructure, there is limited renewable energy available through the grid in most areas of the world. These restrictions limit the total quantity of renewable energy available for purchase directly from the grid for consumption at a facility. Continued advances are needed in renewable electricity generation, distribution and storage technologies to increase the availability of economically viable renewable electricity in the marketplace to supply electricity directly to consuming locations. IBM is working with industry peers, utilities, NGOs and other renewable energy industry participants to identify, develop and capture opportunities to procure electricity generated from renewable sources where it makes business sense.

We also work to incorporate on-site solar energy, co-generation or tri-generation systems or geothermal systems on an individual location basis. Some recent examples:

We are continuing to pursue additional opportunities to install on-site electricity generation systems at our facilities. These systems offer a means to diversify our electricity supply and increase our purchases of renewable energy, though they typically only generate 10 to 20 percent of our site energy demand because the majority of the energy consumed by IBM occurs at locations with energy-dense activities, such as data centers and semiconductor manufacturing sites.