Akamai has well over 200,000 servers running in data centers spread across 126 countries. That’s the kind of distributed system you build if you want to be one of the world’s largest content delivery networks.
This week, the company announced it wants to get to a point where at least half of that infrastructure is powered by renewable energy. It has given itself four years to get there.
But how do you source renewable energy for a network that’s so spread out? A company like Google or Microsoft can commit to a long-term power purchase agreement with a developer of a 10MW wind farm on the same grid as one of its mega data centers, knowing that single facility will need the entire 10MW, if not more.
A company like Akamai doesn’t have a large concentration of servers in any single place. It takes only a little bit of capacity in each location from a variety of data center providers, and most of the global colocation industry hasn’t prioritized renewable energy to power data centers.
“We don’t own any facilities and already pay the landlords for our electricity,” Nicola Peill-Moelter, Akamai’s senior director of environmental sustainability, wrote in a blog post. “Solar panels on roofs and wind-farm power purchase agreements for our individual facilities are not options for us.”
While the multi-tenant data center industry as a whole can hardly be commended for renewable-energy leadership, some individual companies have recently made commitments to renewables of unprecedented scale.
Equinix, for example, has signed wind power deals it said would make its North American footprint 100 percent renewable. Digital Realty is offering its customers one year of premium-free renewable energy anywhere around the world where it has data centers. Las Vegas-based Switch has made big renewable energy commitments in Michigan and Nevada.
To reach its 50-percent renewable goal, Akamai will try out a method it hopes other companies with highly distributed infrastructure will be able to use too. The option is called Contract for Differences.
The way it works is Akamai agrees to act as an “off-taker” for an X amount of energy from a renewable generation developer over a long term at a fixed energy price. The generation will be located on the same grid as one of Akamai’s colocation data centers is located.
The developer sells the energy on the wholesale market, and the difference between the actual sale price and the fixed price Akamai has agreed to goes to Akamai as either credit or debit. Akamai continues to buy electricity from its utility provider but gets to keep and retire renewable energy credits it receives through its contract with the developer.
This may seem like an elegant “finance-innovation” solution to the CDN provider’s puzzle, but it gets messy.
First, Akamai’s footprint doesn’t remain static. The network is constantly growing. Its traffic increased 20-fold over the last seven years, and it expects a 45-percent increase between now and 2020.
Second, financial instruments like Contract for Differences and renewable energy sources themselves aren’t as readily available in places like India or Australia as they are in California, for example, Peill-Moelter wrote. But the company believes the situation will improve.
“No one said this would be easy, or that we would have all the answers at the start. That’s why it’s called a commitment,” she wrote.
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