Increasing renewable energy

In 2014, IBM contracted with its utility suppliers to purchase 683,000 MWh 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 683,000 MWh represented 14.2 percent of our global electricity consumption and resulted in the avoidance of 250,000 metric tons of CO2 emissions.

IBM's renewable energy purchases increased by 17.9 percent from 2013 to 2014. The increase was achieved through the addition of 17,325 MWh of wind- and biomass-generated electricity in Ireland, 43,810 MWh of wind-generated electricity for three cloud data centers in Texas, and increased purchases of renewable energy in Germany, Italy, Spain and Switzerland. In addition, approximately 5 percent of IBM's electricity purchases from the grid were generated from renewable sources -- bringing our total renewable energy purchases to approximately 19 percent of our consumption in 2014.

IBM continued to contract for defined renewable energy purchases above and beyond the renewable electricity supplied as part of the grid mix in Australia, Austria, Belgium, Denmark, Finland, Germany, Ireland, Italy, Japan, Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States in 2014. In addition, three on-site solar photovoltaic systems with capacities of 780, 50 and 40 megawatts, respectively, generate electricity for our consumption at the following IBM locations: Littleton, Massachusetts; Zurich, Switzerland; and New Delhi, India. We also have a 480-megawatt geothermal heating/cooling system at IBM Zurich. As the result of these purchases and systems, approximately 33 percent of IBM's locations with data centers, IT and product development labs, and 28 percent of our cloud data centers, currently source some or all of their electricity from renewable-generation sources.

We procure renewable electricity generated from wind, large and small hydro, biomass, and solar installations around the globe. We report all of our contracted renewable electricity purchases -- be they from new, "additional" or existing generation sources, and without discriminating large hydro installations -- and the associated CO2 avoidance. Our rationale is that all purchases signal to our suppliers our desire for them to maintain and broaden their renewable electricity offerings. We value all economically accessible renewable generation sources and their availability from our utility suppliers.

Our procurement of renewable energy must meet our business needs. Not only should the offerings be cost-competitive with market prices over time, but the electricity supply must also be reliable in providing uninterrupted power for our critical operations. IBM's strategy of contracting for defined renewable energy has been most 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.

Procuring electricity from renewable sources remains complicated by the relatively low energy density and intermittent nature of wind- and solar-generated electricity; limitations and choke points in the electricity transmission system; and by international treaties and national, state and local regulatory and legislative requirements. Continued advances are needed in renewable electricity generation, distribution and storage technologies, and in contracting and delivery mechanisms to increase the availability of economically viable renewable electricity in the marketplace, and to supply that 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.

IBM also endeavors to incorporate co-generation or tri-generation systems on an individual location basis. Three facilities in Europe have co-generation/tri-generation systems that provide 10-20 percent of facility electricity use, as well as heating and cooling, to support building operations.

In December 2014, IBM commissioned a one-megawatt fuel cell to provide electricity to IBM's data center in Connecticut. The system is delivering more than 8.5 million kWh per year, beginning in 2015. The fuel cell will reduce IBM's expenses for the electricity it purchases while lowering the associated CO2 emissions by over 600 metric tons per year.

New renewable electricity procurement goal

In February 2015, IBM established a new goal to procure electricity from renewable sources for 20 percent of IBM's annual electricity consumption by 2020.

To achieve this goal, IBM plans to contract for over 800,000 MWh per year of renewable electricity -- an amount that can power a city of 100,000 people. IBM works with its electricity providers to directly procure renewable electricity to supply IBM's facilities, making a clear connection by matching purchases to consumption, as opposed to purchasing renewable energy certificates as offsets.

Research and solutions to advance the use of renewable energy

In addition to procuring renewable energy for our own use, IBM is working to further the availability and affordability of renewable energy by investing in IT-related research and development.