Microsoft and Iberdrola Forge Major Renewable Energy Partnership in Spain
December 17, 2025
In a significant move to secure clean energy for its expanding operations, Microsoft has entered into two Power Purchase Agreements (PPAs) with Spanish energy giant Iberdrola. This deal underscores the intensifying pressure on major technology firms to decarbonize their energy-intensive data centers and cloud services, particularly as demand for artificial intelligence (AI) computing surges globally.
The agreements, announced on December 17, 2025, will see Microsoft procure a total of 150 megawatts (MW) of renewable energy capacity from two new onshore wind farms in Spain. The power will be sourced from the 94MW Iglesias Wind Farm in Burgos, Castilla y León, and the 101MW El Escudo Wind Farm in Cantabria. This marks Microsoft's first PPAs signed in Europe with Iberdrola, building upon an existing global partnership that includes over 500MW of renewable procurement agreements, including three previous PPAs with Iberdrola's US subsidiary, Avangrid.
Beyond the clean energy supply, the partnership is notably bidirectional. Iberdrola will leverage Microsoft's cloud and AI technologies to accelerate its own digital transformation. The collaboration aims to expand the use of Microsoft's Azure platform, deploy Microsoft Copilot, and implement security and compliance solutions across the Iberdrola Group. Aitor Moso, Iberdrola's director of global customer business, stated, "This partnership will accelerate the adoption of AI across the Iberdrola Group to strengthen our leading digital capabilities and expand our renewable PPA portfolio with Microsoft, in line with both companies' strong commitment to combining major growth in electricity consumption with full decarbonisation."
The companies also plan to explore joint innovation in areas such as utilizing waste heat from data centers and the potential of emerging technologies like hydrogen and battery storage. Samer Abu-Ltaif, president of Microsoft for Europe, the Middle East and Africa, commented, "By combining Iberdrola's leadership in renewable energy with Microsoft's cutting-edge cloud and AI technologies, we’re not only advancing our sustainability goals, we’re also driving innovation and resilience for our customers and communities."
This deal is a prominent example of the deepening convergence between the tech and energy sectors. For hyperscalers like Microsoft, such long-term PPAs provide price stability and a verifiable path to meeting ambitious carbon-neutral goals. For utilities like Iberdrola, which manages a grid capacity exceeding 60,000MW and has over 40,000 customers worldwide, they guarantee demand for new renewable projects, facilitating further investment in green infrastructure. The agreement follows a similar pattern in the region, as Iberdrola signed three PPAs with Amazon earlier in 2025 for 476MW of power across Spain and Portugal, highlighting the strategic importance of the Iberian Peninsula's renewable resources for powering the digital economy.
Source: datacenterdynamics
Microsoft and Iberdrola Forge Major Renewable Energy Partnership in Spain
