VPPA Deal Signed for Illinois Solar Project

BayWa r.e. Americas has signed an aggregated virtual power purchase agreement (VPPA) with several groups for a renewable energy project in Illinois that is designed to support decarbonization efforts in the region. The deal announced September 26 includes Sustainability Roundtable (SR) Inc.'s Net Zero Consortium for Buyers (NZCB), along with Akamai Technologies, Teradyne, and Wayfair LLC. The pact covers the renewable energy credits from the 135-MW Prairie Solar installation in Champaign County, which is expected to enter commercial operation by year-end 2025. Officials said Prairie Solar, located in the Midcontinent Independent System Operator (MISO) region of Illinois, will be a significant renewable energy project in an area that has long relied on fossil fuels for power generation. "Akamai, Teradyne, and Wayfair's aggregated procurement is a marquee example of the VPPA 2.0. This new financial transaction optimizes the conventional VPPA process and transaction structure in transformative ways," said Sustainability Roundtable Inc. CEO Jim Boyle. "It unlocks the utility-scale clean energy and storage market for more than 95% corporations not large enough to independently cause utility-scale projects. This approach can prove integral to achieving the COP28 commitment to triple the world's renewable energy by 2030." Boyle told POWER, “The VPPA 2.0 enables offtakers to aggregate their procurement through its optimization of transaction process and structure. The VPPA 2.0 places the burden on the service provider to organize and commoditize the aggregated requirement into a letter of intent [LOI] and term sheet. Once signed off by the buying CFOs, the LOI and termsheet is the basis of a disciplined Reverse Auction. In this way, NZCB participants help democratize utility scale renewable energy as SR Inc. delivers the auditable, risk-managed procurement processes that the most careful corporations require." Officials said that having companies aggregate their demand helps overcome the challenge of modest energy loads that often hinder independent procurement of utility-scale renewable energy resources. They said that a buyer-aggregated approach "democratizes access to the financial and environmental benefits of utility-scale renewable energy, making procurement possible for a broader range of enterprises." Boyle told POWER, "This project's Southern Illinois location matters. Because most corporate electricity users lack super-concentrated demand, they must aggregate their geographically dispersed electricity loads before they can mitigate their emissions with a new renewable energy project. Deciding to cause a new clean energy project in, for example, this part of MISO, which is 'dirtier' than the grids from which our Member-Clients typically draw electricity, provides outstanding carbon abatement outcomes." Akamai, which is a global distributed platform for cloud computing, security, and content delivery, plans to purchase about 30 MW of the project's output. "Akamai has led the way in innovative renewable energy projects since 2018, when we were a part of the United States' first corporate aggregated VPPA–a game-changing approach for smaller renewable energy buyers. Today we are proud to continue that legacy by participating in this solar aggregation located in a very carbon intensive grid," said Mike Mattera, director of ]corporate sustainability and environmental, social and governance officer at Akamai. Teradyne, a global supplier of automated test equipment and robotics solutions, will purchase renewable energy generated by a 20-MW portion of Prairie Solar as part of the company's commitment to reducing its emissions. Teradyne's portion of the project is expected to deliver renewable energy equivalent to the company's entire U.S. electric load. "Teradyne remains committed to our sustainability initiatives. The NZCB provides one of the many ways Teradyne is working to reduce our environmental impact to benefit all of our stakeholders," said Debra Pulpi, corporate environment, health and safety manager at Teradyne. Wayfair, an online home shopping group, will purchase a 20-MW portion of Prairie Solar's electricity. The company said it will cover about 80% of Wayfair’s electricity needs in North America. "We are proud to be part of our second aggregated virtual power purchase agreement in North America," said Anna Vinogradova, head of sustainability and ESG for Wayfair. "This project will help Wayfair advance towards its Scope 1 and 2 emissions reduction goals, aligning with our vision of a more sustainable future. Partnerships like the NZCB harness collaboration to unlock ambitious opportunities for companies to contribute to a cleaner environment." The NZCB separately advised another entity on a VPPA contract for a 50-MW portion of the Prairie Solar project. —Darrell Proctor is senior editor for POWER (@POWERmagazine).