Microsoft Azure: Geothermal PPA for Microsoft in New Zealand

May 27, 2023 | Posted by MadalineDunn

Microsoft has signed a Power Purchase Agreement (PPA) with Contact Energy for geothermal energy in New Zealand. The 10-year PPA was reportedly signed in September 2022 and will see Contact provide Microsoft with all the renewable energy attributes generated by Contact's new 51.4MW Te Huka Unit 3 geothermal power station.

Unit 3 is the company's fourth geothermal power station at the Te Huka site in Taupō and is set to go live late next year. It is seeing an investment of NZ$300 million (US$182.4m) and is being built by Ormat. The company is simultaneously working on a 168MW Tauhara geothermal power station, also set to go live next year. 

Contact CEO Mike Fuge said further development at Huka has "always been on the cards." 

"By entering this arrangement with Microsoft, Te Huka Unit 3 got the backing it needed, providing further confidence to develop this project. Microsoft's commitment shows what companies with energy-intensive facilities can achieve to support new renewable energy sources," said Fuge.

Fuge shared that the agreement is a first for Contact and New Zealand: "Geothermal is unique in that it provides 24/7 non-weather dependent, reliable, and renewable baseload generation to the grid. This deal demonstrates the actions of two leading organizations aligning to create better outcomes both here in Aotearoa and globally."

Vanessa Sorenson, Managing Director of Microsoft New Zealand: "Microsoft has big plans in New Zealand. With the construction of the data center region, this agreement aligns our New Zealand activities with Contact Energy's presence and capabilities around geothermal in New Zealand and will further strengthen our transition to 100% renewable energy by 2025."

According to Sorenson, this deal also supports Microsoft's 100/100/0 commitment."

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