Leaders in the Tech and Telecom sector, including Facebook, Google, and Amazon, have firmly established themselves as first-movers in the corporate renewable energy world. Since 2010, when Google signed its first power purchase agreement (PPA) for a wind farm in Iowa, this group of companies has led the charge in the race to a green internet. PPAs are becoming the primary mechanism corporations use to procure large amounts of clean power and add new renewable energy to the grid. Looking at aggregate renewable PPA deals signed by commercial, industrial, and institutional (C&I) organizations, it is clear that Tech and Telecom sectors have been major players; in 2015, 2/3 of non-utility renewable energy PPAs were executed by IT companies.
With these large early-adopters making similar clean energy purchases year after year, companies yet to take part in this trend may be wondering: why is renewable energy so appealing? The IT industry, in particular, has several compelling drivers that make renewable energy an attractive option. Of the many reasons private sector constituents choose to pursue clean power projects, IT companies are motivated by the following benefits:
- Economic advantage and price stability of renewables
Volatile markets, paired with high energy demand of infrastructure like data centers, leaves IT companies highly exposed to energy price fluctuations. Renewables are competitive with, if not cheaper than, conventional sources of energy generation in many global markets. Additionally, signing a long-term renewable PPA allows these companies to lock in competitive prices for the future when energy prices are projected to be higher.
- Staking a leadership position in the industry
Brand recognition and loyalty play a large part in this competitive industry. Stakeholder pressure to reduce emissions pushes even the most responsible companies in the IT sector to elevate their commitment to sustainability. For example, Greenpeace holds this sector accountable through the release of an annual report called Clicking Clean that assesses a global suite of internet companies on their energy procurement strategies, reporting transparency, energy efficiency efforts, and advocacy for a greener internet. Both end-consumer and supply chain demand for renewably-powered digital infrastructure is accelerating adoption, along with the economic and social benefits of using clean energy.
- Reducing climate change risk
At the root of their operations, IT companies depend on the functionality of critical facilities such as data centers and colocation centers. This infrastructure, which backs the use of digital devices, networks, and the internet, relies on grid security to deliver services. As a result, these companies are exposed to the effects of climate change such as flooding, extreme weather, and rising temperatures. By supporting the development of new low-carbon energy sources, IT companies play a crucial role in mitigating the scale of these climate risks.
- Global footprint of operations
IT companies currently consume 7% of global electricity, a figure which is expected to see a threefold increase by 2020. WRI’s Scope 2 guidance has helped drive the development of renewable markets worldwide where the IT sector has heavy footprints. India, China, and Singapore are a few countries where companies are exploring renewable solutions to international emissions. These up and coming PPA and EAC markets allow IT companies to locally address electricity load almost anywhere they have operations.
Organizations are empowered now more than ever to achieve their sustainability and financial goals via renewable energy in the form of power purchase agreements and energy attribute certificates (EACs). With new solutions to clean energy goals developing in markets across the globe, it is becoming ever easier for IT companies to make the commitment to a clean internet.
Get in touch with our strategic renewables team to learn more about how your company can embrace the unique benefits of clean energy.