March 19, 2024
Learn how Akamai Technologies has emerged as a trailblazer in corporate sustainability under the guidance of Director of Corporate Sustainability and ESG Officer Mike Mattera. Through its strategic partnership with Sustainability Roundtable Inc’s Sustainable Business & Enterprise Roundtable (SBER) and Net Zero Consortium for Buyers (NZCB), Akamai has overcome challenges typical of high-credit companies with geographically-dispersed electricity demand to procure impactful Purchaser Caused Renewable Energy Credits (RECs) while investing in utility-scale renewable energy projects that cause new renewable energy generation capacity.
Akamai has engaged in several innovative procurements, including buyer-aggregated Virtual Power Purchase Agreements (VPPA 2.0s) through the NZCB, as exemplified by its Azure Sky wind project and a forthcoming solar project scheduled for construction in 2024. Akamai’s initiatives through the NZCB are pivotal to realizing Akamai’s commitment to achieving 100% renewable energy across its global operations by 2030. By setting new standards for sustainability leadership, Akamai, in collaboration with Sustainability Roundtable Inc, continues to spearhead corporate sustainability and grid decarbonization efforts with a dual focus on Net Zero and Real Zero.
SR Inc Member-Client Akamai Technologies is a Massachusetts-based high-tech business with a suite of leading cloud computing, security and content delivery services. Akamai’s Director of Corporate Sustainability and ESG Officer, Mike Mattera, spearheads sustainability efforts at the company. Mike and his team partnered with SR Inc’s Sustainable Business & Enterprise Roundtable (SBER), a strategic advisory service for enterprise decarbonization, to develop an industry-leading decarbonization strategy for Scopes 1, 2, and 3.
An integral component of Akamai’s decarbonization strategy is utility-scale renewable energy procurement. SR Inc’s Net Zero Consortium for Buyers (NZCB) has offered Akamai an unparalleled opportunity to cause new utility-scale renewable energy in carbon-intensive regions through multiple buyer-aggregated VPPAs. These procurements have enabled Akamai to mitigate their Scope 2 greenhouse gas (GHG) emissions while contributing to the decarbonization of the grid in the regions where the new renewables are built. Member-Clients like Akamai represent a new wave of high-credit firms procuring utility-scale renewables, helping move SR Inc’s NZCB to leadership in democratizing the environmental and financial advantages of utility-scale renewable energy.
Nearly a decade ago, giant industry-leading companies like Alphabet, Apple, HP, and General Motors initiated the shift towards corporate procurement of renewable energy through direct power purchase agreements (PPAs) with developers and utilities. These companies’ energy profiles are marked by super-intense and geographically-concentrated demand, necessitating sophisticated energy procurement strategies, including the independent procurement of utility-scale renewable energy. However, challenges in siting, market constraints, and regulatory hurdles paved the way for Virtual Power Purchase Agreements (VPPAs) as an alternative to direct PPAs, enabling corporate users to secure benefits without the complexities associated with direct procurement.
The VPPA is termed “virtual” because, unlike direct PPAs, the corporate buyer does not acquire the physical electricity generated by the renewable energy project. Instead, the company purchases Renewable Energy Certificates (RECs), ensuring the seller receives an agreed-upon VPPA purchase price for both the RECs and the associated physical energy. The transaction is achieved through a “contract for differences” pricing mechanism, where the price of the RECs is set as the net difference between the agreed VPPA price and the price the developer receives when selling the electricity in the local wholesale market. By guaranteeing a long-term revenue stream, the VPPA causes the financing for the construction of the new project.
With a VPPA, the renewable energy buyer acquires Purchaser-Caused RECs with an unequivocal claim that the investment of the corporate buyer through the VPPA has helped cause new renewable energy capacity. All SR Inc Member-Client companies prefer Purchaser-Caused RECs to the use of unbundled RECs when it is possible to procure them. A REC is considered “unbundled” when it is sold through a second transaction that is distinct from the transaction that enabled the financing of the renewable energy-generating project. As companies are publicizing their “move to 100% renewable energy,” sustainability executives are right to feel discomfort with the fact that the procurement of unbundled RECs leaves all their ‘brown energy’ contracts in place and causes no new renewable energy capacity.
Conversely, the long-term acquisition of Purchaser Caused RECs through VPPAs allows companies to solve for Scope 2 GHG emissions, most often in the U.S., Canada, and the European Union, while helping to cause new capacity. The financial and environmental benefits of VPPAs have made them a pillar of the decarbonization strategies developed by SR Inc’s SBER for our Member-Clients; however, the vast majority of high-credit companies with geographically-dispersed electricity demand, like Akamai, face a distinct challenge in independently procuring utility-scale renewable energy through VPPAs
In response to this distinct challenge, SR Inc’s NZCB introduced buyer-aggregated VPPAs (VPPA 2.0s). The VPPA 2.0 approach democratizes access to the financial and environmental benefits of utility-scale renewable energy by making it accessible to a broader range of enterprises. SR Inc Member-Clients are able to come together with the assistance of SR Inc’s NZCB to create economies of scale, experience, and intellect. The NZCB’s auditable corporate procurement process and reverse auctions have become core to a growing number of SR Inc Member-Clients’ decarbonization strategies.
Through VPPA 2.0s, companies combine their collective purchasing power to cause utility-scale renewable energy projects while demanding the most favorable terms from developers. The NZCB expands the market from VPPAs beyond the world’s largest energy users to significantly expand access across sectors and across differing energy loads.
Akamai has demonstrated a commitment to renewable energy leadership through multiple renewable energy procurements, including two buyer-aggregated VPPAs through SR Inc’s NZCB. Akamai’s renewable energy procurement strategy is guided by its public 2030 goal of 100% renewable energy across its global operations. Akamai’s decarbonization strategy development and successful implementation has contributed to SR Inc’s success in bringing transaction sophistication and economies of scale to many firms that lack the concentrated energy demand and internal expertise characteristic of that first generation of corporate offtakers.
Akamai actively engages in innovative procurements to mitigate its Scope 2 emissions. The company has signed several small wind and solar VPPAs across North America, and has helped lead two buyer-aggregated procurements through SR Inc’s NZCB.
Through SR Inc’s NZCB, Akamai signed on to a 12-year, off-site, buyer-aggregated VPPA with Enel Green Power for the construction of the Azure Sky wind project in Texas. The project came online in May 2022. Akamai’s offtake was 18 megawatts (MW) of the 350 MW project capacity. Other NZCB offtakers that participated in the Azure Sky wind project included MilliporeSigma, Uber, and Synopsys, for a total 111 MW buyer-aggregated VPPA procurement. Through the NZCB, Akamai, MilliporeSigma, Uber, and Synopsys were able to go to market together in a single RFP and reverse-auction based procurement and contract negotiation process, at the scale required to obtain buyer-favorable business terms while minimizing risk for the offtakers.
This buyer-aggregated transaction, in which Akamai was responsible for 18 MW, helped finance new wind energy capacity to help decarbonize the grid in ERCOT. Akamai obtained Purchaser Caused RECs from this project, and the market-based method under the GHG Protocol’s Scope 2 Guidance allows Akamai to apply these RECs to its Scope 2 emissions anywhere within the U.S. and Canada.
The collaborative effort showcased the power of aggregated procurements to democratize access to the benefits of utility-scale renewable energy. Akamai’s procurement has broad implications across different scales. In December 2023, SR Inc joined forces with Akamai and its third-party data partners, Quantum Energy and REsurety, to respond to the Science Based Targets Initiative’s Call for Evidence on the effectiveness of Environmental Attribute Certificates (EACs) in Corporate Climate Targets. SR Inc’s Response to SBTi’s Call for Evidence demonstrated that Akamai’s Purchaser-Caused RECs are responsible for measurable emissions reductions, ecosystem benefits, public health advantages, and economic value.
Akamai continues to demonstrate its commitment to renewable energy. In 2023, Akamai joined an aggregated procurement in a carbon intensive grid with the NZCB alongside several other parties; the project is scheduled for construction in 2024. More details will follow in a press release at midyear.
Akamai’s VPPA procurements are an essential component of the company’s decarbonization strategy and expansive sustainability vision. Beyond Akamai’s partnership with the NZCB, Akamai has worked collaboratively with SR Inc’s sustainability advisory and support service, SBER, to complement their strategic sustainability leadership on both Net Zero and Real Zero. Akamai’s Director of Sustainability and ESG Officer Mike Mattera has forged a path for Akamai’s sustainability leadership through his focus on “Emissions First” carbon abatement (utilizing Resurety’s locational marginal emissions tool), leading on grid decarbonization in collaboration with ZEROgrid, and helping suppliers procure renewables through Supply Chain Partner Education (CEBA).
Akamai is one of the several companies leading on enterprise decarbonization that has signed SR Inc’s Declaration for Purchaser Caused EACs, released in 2024. The Declaration states that the current global EAC market needs a specific and respected standard for EACs generated by new renewable energy capacity. SR Inc hopes all SBER Member-Clients will join Akamai and industry leaders in signing onto the Declaration in 2024.
Akamai’s commitment to renewable energy in partnership with SR Inc showcases the company’s dedication to grid decarbonization, while setting new standards for sustainability leadership with Akamai’s Director of Sustainability and ESG Officer Mike Mattera at the helm. In the evolving landscape of corporate sustainability and in the face of human-caused climate breakdown, Akamai Technologies continues to play a pivotal role in shaping a greener, more sustainable future, while paving the way for the thousands of companies of similar energy profiles to follow.
Anna Whitney is a Senior Program Associate at SR Inc with a focus on sustainability benchmarking and program management for Member-Clients. Anna develops and implements SR Inc’s communications and marketing strategy relating to renewable energy. Prior to joining SR Inc, Anna was an educator, teaching about environmental and climate science at Horace Mann School and Brunswick School, as well as a guest lecture at Columbia Climate School. Anna completed a Master’s degree focused on sustainability education at Teachers College, Columbia University and graduated with a B.A. in Environmental Studies from Dartmouth College.
