Verizon seeks to be known as a responsible, purpose-driven, trusted brand on the cutting edge of innovation to benefit our four key stakeholders: customers, shareholders, employees and society.
We believe that we have a responsibility to leverage our technology, operations and employees to help move the world forward into a more connected, secure and sustainable future. Key to this is our commitment to protect our planet for future generations. Verizon has set ambitious goals around climate protection, including achieving net zero emissions in our operations by 2035.
As a first step on our net zero journey, we have committed to source or generate renewable energy equivalent to 50% of our annual electricity consumption by 2025. Because most of Verizon’s emissions come from the electricity that we use to power our networks, our support of renewable energy and the transition to a greener grid is a key enabler to achieving this goal.
Our network operations are located across the country and require a constant supply of electricity to operate. It is not feasible to power our network operations directly from solar or wind generation facilities during every hour of every day, so we are dependent on sourcing power from our local electrical grids. Today, much of that power is “brown” power, produced from conventional fossil fuels such as coal and oil. To achieve our renewable energy goal, we are focusing our resources on accelerating the transition to greener electrical grids across the U.S.
We are working to bring additional renewable energy to the grids by entering into long-term power purchase agreements for solar and wind power under development. The agreements, called virtual power purchase agreements, or VPPAs, are financially settled and can reduce Verizon’s long- term exposure to energy price volatility.
By providing the developers of renewable energy facilities with long-term revenue certainty, these agreements enable them to obtain the capital they need to construct the new solar and wind energy facilities. We generally do not expect to take physical delivery of the power from a facility under these agreements. Rather the facility operator sells the power into the wholesale market and we receive the renewable energy credits (RECs) associated with the power sold. We intend to retire these RECs against our actual energy consumption to track our progress in meeting our renewable energy goal.
In less than two years, Verizon has become one of the leading corporate buyers of renewable energy in the U.S., entering into fourteen VPPAs totaling nearly 1.9 gigawatts (GW) of renewable energy capacity. The projects covered by these agreements are scheduled to commence commercial operations over the next three years. With these agreements, we are making significant progress toward our renewable energy goal.