Renewable electricity consumption

In February 2021, IBM established its third-generation renewable electricity procurement goal: to procure 75% of the electricity IBM consumes globally from renewable sources by 2025, and 90% by 2030. The amount includes renewable electricity in the grid mix IBM receives from utilities or energy retailers, and renewable electricity for which IBM specifically contracts over and above the renewables in the grid.

In 2020, 59.3 percent (2,083,000 MWh) of the electricity consumed across IBM's global operations came from renewable sources, meeting our second-generation goal of 55 percent by 2025 five years early. The renewable electricity total includes 43.3 percent directly contracted from IBM's power suppliers, in addition to the other 16 percent already in the electricity mix we received from the grid.

When reporting our consumption of renewable electricity, we count only the renewable electricity that is generated in the grid regions where our consumption actually occurs. We do not rely upon the purchase of unbundled RECs to comprise any "percent renewable" if we cannot credibly consume the electricity those certificates represent.

IBM significantly increased its consumption of renewable electricity through contracted purchases in the United States, Europe and Brazil. We are also working closely with landlords of our co-location data centers to increase the amount of renewable electricity they use in support of IBM's operations at those facilities.

IBM procures renewable electricity generated from wind, hydropower, biomass, and solar installations around the globe. We report all of our contracted renewable electricity purchases and their associated GHG emissions avoidance— whether from new or existing generation sources, "additional" or otherwise, and without discriminating against large hydropower plants. All purchases signal to suppliers our desire for them to maintain and broaden their renewable electricity offerings. This approach also recognizes that all sources of renewable electricity contribute to decarbonizing our economy.

Data centers continue to account for the majority of IBM's global electricity consumption, while representing only a very small fraction of our total space. In 2020, 61 percent of the electricity consumed in our data centers came from renewable sources, including both contracted and grid-supplied, up from 50 percent in 2019. IBM's data centers include 66 that were supplied with 100 percent renewable electricity, although they still depend on backup power from fossil fuels when renewable sources become interrupted.


IBM methodology to calculate its consumption of renewable electricity

IBM differentiates between two categories of renewable electricity consumption:

  • Contracted renewable purchases: purchases of renewable electricity in which IBM enters into a direct contractual relationship with a utility or power supplier to specifically procure and consume renewable electricity.
  • Grid-supplied renewables: amount of renewables that is part of the mix of electricity our facilities automatically receive from the grid.

To quantify our contracted renewable purchases, we rely upon our contracts with utilities and power suppliers that confirm our purchases and the amounts of renewable electricity supplied to our facilities. Typically, we are able to obtain bundled Renewable Energy Certificates (RECs) in corresponding quantities that confirm this information. We track this at the facility or country level, depending on the scope of our power supply contract. However, some of our contracted purchases of renewable electricity are not accompanied by bundled RECs. This occurs in geographies with a lack of REC tracking mechanisms and in case of specific contracts which are not eligible for issuance of RECs even though they represent a legitimate consumption of renewable electricity. In these cases, we collect other information as alternative evidence to RECs.

For grid-supplied renewables that we receive, we use publicly available data from the International Energy Agency1, from the U.S. Environmental Protection Agency2 (at grid sub-region level) and from the Canada Energy Regulator3 agency (at provincial level) to estimate the share of electricity in the grid that is generated by renewable sources and supplied to IBM.

IBM does not arbitrarily assign the consumption of renewable electricity to certain types of operations to be able to show desirable metrics (e.g., assigning all of our renewables consumption to our data center operations). Our approach is factual and transparent as we assign renewables consumption proportionally to the operations consuming the electricity at a facility level.

Note: Publicly available data on the share of renewables in grid-supplied electricity is typically one to three years behind the actual reporting year. IBM endeavors to obtain the latest reliable data for any given reporting cycle.

Example:

A hypothetical IBM site in Texas consumes 10,000 megawatt-hours (MWh) of electricity in a given year. That particular site signs a contract with its power supplier to purchase and consume 5,000 MWh of renewable electricity per year. Therefore, 50% of the site's electricity is being supplied by contracted renewable purchases. The rest of the site's consumption (5,000 MWh) is being supplied by a mix of energy sources in that region's particular grid. This location is in the ERCOT grid sub-region.

  • According to the U.S. EPA, the electricity produced in the ERCOT subregion during 2018 came from the following sources: coal (22.6%); natural gas (48.5%); other fossil fuels (0.7%); nuclear power (10.0%); hydropower (0.2%); biomass (0.2%); wind power (17.0%); solar power (0.8%). That means, that in total, the grid in ERCOT was powered by 18.2% renewables that year.
  • Based on the EPA factors, we calculate 18.2% of IBM's remaining 5,000 MWh of electricity consumption — equal to 910 MWh — was generated from renewable sources.
  • The site's total consumption of renewable electricity that year was 5,000 MWh (contracted purchases), plus 910 MWh (grid-supplied), totaling 5,910 MWh, or 59.1% of its total electricity consumption.

1https://www.iea.org/data-and-statistics/data-tables/?country=WORLD&year=2017&energy=Electricity
2https://www.epa.gov/sites/production/files/2020-01/documents/egrid2018_summary_tables.pdf
3https://www.cer-rec.gc.ca/index-eng.html


Renewable electricity procurement strategy

IBM's strategy is to purchase renewable electricity that is generated in the grid regions where our consumption of electricity occurs. This approach enables IBM to actually consume the renewable electricity it purchases when the time of its generation and our consumption coincides, and creates incentives for our electricity suppliers to increase their renewable electricity generation in the places where we actually have demand for such power. IBM does not rely upon the purchase of unbundled Renewable Energy Certificates (RECs) to offset its consumption of electricity from fossil fuels.

For more details about our renewable electricity procurement strategy, please see our Position on transparency in renewable electricity reporting web page.