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Akamai, which has committed to power the internet more sustainably, took part in the US’ first corporate aggregated VPPA — a game-changing approach for smaller renewable energy buyers.
Financially savvy and environmentally responsible companies of all sizes are
seeking to switch over to renewable energy. This can be a challenge, especially
for smaller companies. Many companies purchase Renewable Energy Certificates
equal to the amount of power they consume. These certificates prove that
renewable energy was added to the grid, and give companies the right to claim
that they have purchased a certain amount of renewable energy. Virtual Power
Purchase Agreements (VPPAs), which have recently gained popularity, make
the purchase of renewable energy much more accessible. They are financial
transactions in which companies use their credit to extend a fixed price cash
flow to renewable energy projects in exchange for RECs, which helps these
projects get built.
As recently as 2-3 years ago, companies with small energy loads could not
benefit from the business and risk-mitigation terms that were only available to
very large energy users. However, corporate aggregated VPPAs — such as the
by Bloomberg, Cox Enterprises, Gap
Inc., Salesforce and Workday earlier this year — are changing that.
Even before that, in 2018, Apple, Akamai, Etsy and Swiss Re
announced the first corporate aggregated VPPA in the
The project led to the construction of two renewable energy plants — a 125-MW
wind farm in Illinois and a 165-MW solar farm in Virginia. This year,
both projects will come online.
With Akamai looking for innovative ways to pursue its
renewable strategy and recognizing shared goals with Apple, Etsy and Swiss Re,
the companies formed a renewable energy buyer group to procure 290 MW of power.
Akamai, a major cloud service provider, has committed to power the internet more
sustainably. This partnership helped the company get much closer to its 2020
We caught up with Mike Mattera, Director of Corporate Sustainability at
Akamai; as well as the energy consultants on the project, Jim Boyle and
David Osborn — the CEO and COO of Sustainability Roundtable,
respectively. Here’s what they said:
Mike Mattera: In 2015, Akamai set a goal for Akamai-leased data center
operations to be 50 percent renewable by
We sought to achieve this through a mix of on-grid renewable projects and data
center co-location partners that could pass renewable energy off to us. We
wanted a strategy that would ensure we were positively affecting the communities
in which we operate, work and live. This is a more aggressive approach than just
purchasing RECs and applying them to offset greenhouse gas emissions from our
data center operations.
Since Akamai’s network is so widely distributed — 137 countries, 1,000+ cities
and over 3,900+ locations globally — it is very difficult to execute this
strategy. Our data center operations are not consolidated, like you see with the
Microsofts, Amazons and Googles of the world.
MM: With the wide distribution of our operations, and no direct path to
carbon neutrality, partners were key to get to the finish line. Partnerships
granted us a seat at the table with the large renewable energy development
companies, allowing us to purchase energy in the largest cities across the
globe. Together with Etsy and Swiss Re and an anchor tenant like Apple, we could
take a larger part in the project and participate in the procurement strategy.
In this way, Akamai has the opportunity to offtake a portion of a given
renewable project to power our data center operations and not have to worry abot
buying more than we need. When you are in pursuit of renewable
having strong partnerships in place will reduce the cost and headaches, while
being able to share the positive downstream effects together.
MM: Akamai, Apple, Etsy and Swiss Re collaborated to form a renewable energy
buyers’ group to procure 290 MW of renewable energy capacity to get closer to
achieving goals of carbon neutrality for our data centers and computing
operations in Illinois, New Jersey and Virginia. The collective purchasing
power from partnering with Apple was much larger than Akamai, Etsy and Swiss Re
would have realized individually — this enabled us to solicit interest and
cost-competitive bids from quality energy developers. We were also able to
reduce the complexity and transaction costs by sharing a consultant to manage
the process, starting from a common virtual power purchase agreement contract
and working together to negotiate terms — which would have been difficult for
Akamai, Etsy and Swiss Re to negotiate alone. It’s a replicable model that can
help accelerate renewable energy procurement for smaller corporate buyers like
Jim Boyle: Akamai innovated to bring the transaction sophistication and
economies of scale previously reserved only for the world’s largest energy user
to every high-credit enterprise. First, Akamai was a leader on VPPAs — this
provides RECs with an unquestionable claim to representing new renewable energy,
while innovatively selling the energy in the local market to third parties.
Then, Akamai innovated further with the first buyer-organized corporate
aggregated VPPA in the US (only the public sector and universities had done one
The Managing Director of RMI’s Business Renewable Center, Herve
Touati, noted in 2017: “Aggregation is clearly the industry’s next and highest
priority. It is the nut to be cracked” — and that is what Akamai, Apple, Etsy
and Swiss Re jointly accomplished with the US’ first corporate aggregated VPPA.
Akamai was the catalyst for the transaction and was assisted by
3Degrees, which also worked with Apple on the
multi-site and multi-technology transaction.
Through this effort, Akamai has led in a manner that has very few peers. Only
Bloomberg, Intuit and Salesforce can claim a similar level of leading innovation
with VPPAs and aggregated VPPAs (after Akamai) to create what amounts to a new
type of economically compelling renewable energy for every enterprise. Now
Akamai is also leading in Iron
Mountain’s Green Power
(i.e. supplier-provided RECs) and because of its successes, Akamai may decide to
pursue 100 percent renewable energy, by causing new renewable energy
infrastructure to be built.
JB: The IT industry context matters. As Greenpeace’s “Clicking
initiative and BSR’s Future of Internet Power make clear, the industry
is awake to the fact that it’s driving electricity consumption at an epic scale
globally, and causing long-term electricity to infrastructure to be built
worldwide that will determine if the internet is
The major IT players know this will have a meaningful impact on whether global
civil society is sustainable. And since it is comprised of technologists, the IT
industry understands technology inflecting trends and exponential adoption, and
is working to “force the spring” in regard to the flowering of renewable energy
David Osborne: This solution can absolutely work for other companies. They
should speak with a corporate renewable energy expert to understand the range of
potential renewable energy solutions available to them to reach
emission-reduction targets in the US and globally. With a deepened
understanding, they can then formulate achievable goals with a clear
This transaction highlights how companies today can participate in VPPAs to
accomplish US emission-reduction goals (including net zero
and renewable energy goals. Central to any renewable energy option is the claim
a company can make to actually having caused new renewable energy to be built
— many options that companies use today do not lead to new renewable energy
creation. However, in the above transaction, Akamai is central to causing new
renewable energy through its VPPA contracts.
Published Aug 6, 2019 1pm EDT / 10am PDT / 6pm BST / 7pm CEST
This article, produced in cooperation with the Sustainable Brands editorial team, has been paid for by one of our sponsors.