Data Centers: How Equinix Shrinks the Carbon in the Cloud

The move from physical to digital media has changed our lives in many ways. We read online more and on paper less. We stream music and movies rather than buy tapes and discs. Though we may accumulate less physical items, we certainly use a lot more data. And data has a large, and growing, carbon footprint.

The What

A wind purchase power agreement builds renewable energy capacity by providing demand and capital for the clean energy marketplace.

The Who

Equinix, Inc. is a large real estate investment trust that specializes in data centers.1

The Value-Added Proposition

Investment into wind and purchase of renewable energy credits (RECs) brings Equinix’s data centers’ energy use in its US portfolio to 100% renewable energy.

data center interior

Exponential Energy Use at Data Centers

We are online and using the “Cloud” everywhere now. All that data we use is sorted, routed, and stored in data centers. These buildings are the brick-and-mortar to the cloud. If you use the internet, then a data center is likely somewhere nearby. Even with fiber optics, data still travels faster when it has less far to go. You’ll find major data center clusters wherever data use is heavy. Wall Street, Silicon Valley, and Hollywood are all obvious data hogs. So is the federal government and the defense industries so you’ll find many centers in Virginia too.

Data centers consume 100 to 200 times more energy more than similar sized buildings.4Power demands for computing and cooling alone are 2x higher than normal office uses.And that power is required 24 hours a day, 7 days a week because the internet never shuts off.  It is estimated the information technology sector consumes 7% of global electricity.Using so much global energy puts a spotlight on what types of energy is being used at technology companies and the data centers that house internet services across the globe.

In 2010, the advocacy organization Greenpeace began campaigning for technology companies to use more renewable energy. Their “Clicking Clean” program initially gave many tech firms low scores.7Leading brands like Google, Apple, Amazon, and Salesforce began switching to renewables. Equinix, a large data center REIT that has many of those tech firms as clients, determined they wanted to lead this revolution and joined the RE100, an alliance of companies committing to using 100% renewables.

Data centers use more energy than is practical to generate onsite. Installing solar panels on the roof won’t get you enough power. It’d be nice if Equinix (and everyone else) could simply opt to buy only renewable energy from their local utility. But depending on your location, you may not have that option. In the US, there are three primary grid systems – the Eastern Interconnection, the Western Interconnection and the Texas Interconnection. The energy you buy depends on the energy sources fed into these grids from utility electric generation in each region and in each state. For instance, coal-fired plants accounted for 25.4% of electricity generation in Texas, 3.8% in Virginia, and only 0.1% in California. Renewable energy sources made up 35% in California, 16.1% in Texas and 8.5% in Virginia.8

To source more renewable energy Equinix had to determine their energy goals and assess the local “energy mix” for all of their centers. Equinix has many multi-tenant data centers. Somewhat uniquely, they invoice each client an energy bill alongside the rent. This allows Equinix to more accurately assess energy needs and aggregate demand. The REIT then determines what the local utility provider can deliver in terms of renewables for each location. When the local utility doesn’t provide pathways to renewable energy sources, Equinix came up with an alternative.

In 2015, Equinix completed Wind Purchase Power Agreements (PPAs) with renewable energy firms NextEra Energy and Invenergy. A PPA is a contract between the buyer and seller of energy for a specific amount of energy at a specific price. By guaranteeing the purchase of 225 Megawatt-hour (MWh), Equinix enabled these providers to complete the build out of their wind farm projects in Oklahoma and Texas.9 This contract has contributed in bringing Equinix’s North American portfolio of data centers to use 100% renewable energy.

Interestingly, the energy from the wind power purchase agreement is generated in the middle of the country where the wind is, not where the data centers need it – this a virtual PPA. It’s inefficient to move electricity that far. This is where Renewable Energy Certificates (RECs – see box) come in to play. With the virtual PPA in place, Equinix is allocated RECs for all the energy it purchases from NextEra and Invenergy. The company applies these credits towards its overall energy use at its data centers across the US.

The RECs allow Equinix to signal to the market they are a buyer of green energy. Technically, the actual energy mix delivered to each data center may not be green due to the local grid. But by financing additional wind power to come online via the PPA, and accounting for this energy through RECs, Equinix is contributing to the demand for renewable energy and changing the way the cloud is powered.

What is a Renewable Energy Certificate?

Once energy enters into the grid, from any source, it is just energy and we lose track of its origin. A Renewable Energy Certificate or REC is issued for every Megawatt-hour (MWh) of electricity generated and delivered to the grid by a renewable energy source. One MWh is enough to power nearly 1,000 homes for a year. RECs are the currency of the renewable energy market – they allow purchasers to demonstrate demand for renewable energy and provide revenue for it.10 RECs are uniquely numbered, tracked, and retired; one REC cannot be used by another entity. Anyone can buy RECs – individuals and companies that do so are effectively buying green energy on the grid.

REIT making moves to the new low-carbon economy

Equinix builds and manages data centers around the globe. Two decades ago the company began providing a neutral location where various data carriers could co-locate their servers and associated hardware. Since then, the increased need for digital connectivity and demand for internet “up-time”, means that it is no longer economically viable for many small businesses to house their own servers. Equinix serves these companies by hosting the company’s servers that need to interface with the cloud in Equinix’s centers. They also serve larger sized companies that might require servers in multiple locations. Ironically as more companies need online portals and data storage moves into the cloud, there is an increased demand for outsourced physical internet data storage locations.

Equinix recognizes the economic viability of investing in green energy solutions. At the end of 2017, Greenpeace graded Equinix a “B” for efforts – scoring highest among data centers – as the company now gets 77% of their global energy from renewables, up from 56% the year before:

  • 100% renewable in the U.S. (excluding the recent acquisition of 29 data centers from Verizon)
  •  73% in Americas (North, Central, South)
  • 65% in Asia-Pacific
  • 89% in Europe, Middle East, Africa (EMEA)
  • 13 alternative energy fuel cell installations totaling 37 MW capacity the U.S.11

How do these initiatives correspond to the sustainability metrics of the Vert Global Sustainable Real Estate Strategy?

The investment strategy for the Vert Global Sustainable Real Estate Fund uses a rules-based approach to evaluate the sustainability of a publicly-traded REIT. Equinix’s leadership demonstrates the following characteristics that reflect our key performance indicators shown in the table below:

Key Performance Indicator

Equinix Virtual Wind Purchase Power Agreement
Stakeholder Engagement
Awareness and education for the local utilities, the end-user tenant. Continual negotiations with energy providers.
Energy Use and Greenhouse Gas Emissions Reduction

Taking proactive action to move its energy mix towards 100% renewable energy in its overall portfolio.

1Equinix, Inc. is 3.93% of the Vert Global Sustainable Real Estate Fund (VGSRX) as of December 31, 2018.
2Interior of Equinix IBX data center DC12 in Washington, D.C. Accessed at: Equinix, Inc.
3Invenergy LLC. Wake Wind Farm near Lubbock Texas. Accessed at:
4Energy Efficiency and Renewable Energy (March 2011). “Best Practices Guide for Energy-Efficient Data Center Design.” United States Department of Energy, p.1.  Accessed at:
US Energy Information and Administration, EIA (October 5, 2016). “Office buildings with data centers use significantly more electricity than other offices.”    Accessed at:
6Greenpeace (2017). “Clicking Clean: Who is Winning the Race to Build a Green Internet?” Greenpeace, p.5. Accessed at:
8US Energy Information and Administration (various dates 2016-2018). “State Profile and Energy Estimates.” EIA. Accessed at:
Equinix (2015). “Equinix Signs Power Purchase Agreements that Bring its North American Data Centers to 100% Renewable Energy.” Newsroom, Equinix. Accessed at:  renewable-energy/
10 US Environmental Protection Agency (June 5, 2018). ” Green Power Partnership: Renewable Energy Certificates.” EPA. Accessed at:
11 Equinix, Inc. (2017). “Connecting with purpose: Equinix 2017 Corporate Sustainability Report.” p. 11.

Please refer to the Prospectus for full risk disclosures. All data as of December 31, 2018 and subject to change daily.

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