Presentation on theme: "Procuring Renewable Electricity: Strategies for Addressing Barriers for Higher Education Institutions U.S. EPA’s Green Power Partnership Blaine Collison,"— Presentation transcript:
1Procuring Renewable Electricity: Strategies for Addressing Barriers for Higher Education InstitutionsU.S. EPA’s Green Power PartnershipBlaine Collison, Program Director, U.S. Environmental Protection AgencyAnthony Amato, ERG, support contractor to EPATuesday, October 16, 2012AASHE 2012 ConferenceLos Angeles, California
2Today’s Agenda Green Power 101 – What is it? How do you get it? Current status of green power use within higher educationBarriers to green power procurementOutside the box strategies and collaborative opportunitiesCase studies – Santa Clara University & Luther CollegeWho are you? What do you want? What is stopping you? How do we get to implementation?
3What is Green Power?Electricity generated from natural resources that replenish themselves over short periods of time, including the sun, wind, moving water, organic plant and waste material (biomass), and the Earth’s heat (geothermal).BiogasBiomassGeothermalSmall-HydroSolarWind
4Green Power Procurement Options Renewable Energy Certificates (RECs)The environmental “attributes” of electricity generated from renewable resources (1 REC = 1 MWh)Attributes are based on the generation technology type and age, geographic location, and time of generationDoes not include the underlying electrons – “unbundled”a.k.a. Green Tags, Renewable Energy CreditsGreen Power Electricity Products“Bundled” product from utility or competitive energy supplier that includes both the RECs as well as the underlying electronsOn-site GenerationInstall a renewable energy system on-site (e.g. solar panels, wind turbine)Produces both electricity and RECs from the on-site sourceSelf-financed installation or via a third-party PPATo claim “use” of green power, host needs REC ownership
5Renewable Energy Certificates Long-term REC contracts with credit-worthy counter parties can help finance new renewable projects
6Value Proposition of Renewables for a College Campus Meet environmental objectivesSustainability goalsGHG reduction targetsAmerican College & University Presidents Climate CommitmentManage riskReduce exposure to fossil-fuel price volatilityDeploys quickly & scales up easilyDrive economic developmentHigher ed commitments are financeableDomestic energy supplyNew U.S. jobsEnhance school brandProspective studentsHost communitiesPeer institutionsAttract & retain studentsSustainability and green power is a hot topic on campusIncorporate green power into research initiatives & curriculaDid you know…..- 79% of colleges and universities have conducted a GHG inventory.- 64% of colleges and universities have made a carbon reduction commitment.Source: 2011 College Sustainability Report Card
7Current Status: Green Power in Higher Education EPA’s Green Power Partnership123 College and University PartnersGreen power use totaling nearly 2.2 billion kWhEquates to ~5% of voluntary green power marketEmission avoidance equivalent to the CO2 emissions from the electricity use of 190,000 average American homes for one yearAmerican College & University Presidents’ Climate Commitment657 Signatories committed to becoming climate neutralPurchased electricity currently constitutes ~40% of their GHG emissions237 Schools committed to Tangible Action #5Within one year of signing commitment, begin purchasing or producing at least 15% of institution's electricity consumption from renewable sourcesGPP: 48 schools with on-site, 42 schools doing utility or marketing products, and 77 purchasing RECs. 1.89% of Green Power comes from on-site % comes from utility or marketing products % comes from the purchase of RECs.
8Opportunities in Green Power Space for Higher Education Institutions Unique Properties of Higher Education Institutions …..Engaged stakeholdersFinancial stability/credit-worthinessFocus on longer timeframesLarge geographic footprintRole in civic society....Offer Unique Opportunities with RenewablesLarge on-site renewable installations (owned or via PPA)Utility-scale off-site projectsCollaborative purchasingStudent purchasing for dorm roomsDevelopment of new renewable technologies via research8
9GPP Intensifying Focus on College & Universities Collaboration with Second Nature – the NGO behind the ACUPCC – to assist schools with overcoming barriers to renewable energy adoptionWebinar series focused on issues, barriers, and successes within higher educationNew renewable energy resource sections on Second Nature and EPA websites (procurement guides, REC and PPA templates, etc)If all ACUPCC Signatories switched to 100% green power, the total demand would be equal to over 40 billion kWh annually, which is equal to the:current demand within the entire voluntary market in the USelectricity demand of over 3.5 million average American homes
10Potential Roles of EPA & Second Nature Group convener and facilitatorBuild/Gauge consensus on preferred procurement strategy(ies) of school or group of schoolsMatch-makerAssistance reviewing/developing RFIs/RFQs/RFPsEPA network of resourcesExample of best practices
11Barriers to Renewable Energy Adoption Green Power PurchasePower/REC costTransaction costUnfamiliarity with procurement optionsComfort with REC conceptPerceived barriersOn-site DeploymentUp-front capital costsTransaction costLimited site availability/qualityOutside of core competenciesSystem performance risksMaintenance responsibilities
13What Procurement Strategies Can Help Schools Overcome Barriers? Third-Party Financed Solar PowerCollaborative Purchases of On-site Renewable SystemsUtility-Scale Power Purchase AgreementsPower Purchase Agreements with Yet-to-be-Built ProjectGreen Power Buying Groups
14Strategy #1: Third-party Financed Solar Power Financial arrangement in which a third-party developer owns, operates, and maintains the PV system and host customer agrees to host the system on property and purchase the system’s electric output for a pre-determined periodBenefitsNo up front capital costPotentially cash flow positive from day onePredictable pricingNo system performance or operating riskVisible/tangible commitment to renewable energyPotential reduction in carbon footprint (if associated RECs are retained)ChallengesFinancial viability may be dependent on utility/state/federal incentivesSite lease may limit ability to make changes to property that would affect PV system performance or access to the systemMessaging without REC ownershipNot legal in four states
15Strategy #2: Collaborative Purchase of On-site Systems Regional group of schools collaborate on assessing individual onsite potential and make bulk purchase of on-site renewable energy systems (PV, wind)Each school would install the renewable energy systems at their campusVarious financing options (direct purchase, PPA, equipment lease)BenefitsReduce the cost of PV systems through volume purchasing (10-15%)Reduce vendor/installation costs through economies of scale and standardizationReduce transactions costs and administrative effort (50%-75%)Minimize workload for participants by using turnkey installations of solar systemsStimulate creation of local clean tech jobsPotential for hands-on student learningVisible/tangible commitment to renewable energyChallengesQuality of resource (solar, wind)?Level of state incentives/rebates?Longer timeframe procurement processComplexityPossible ownership and maintenance responsibilitiesMessaging without REC ownershipFor more information see:
16Strategy #3: Utility-scale Power Purchase Agreement Direct off-take from specific renewable energy facilityLong-term power purchase agreement (10-25 years)Purchase of bundled power and RECsRecent ExamplesOhio State UniversityIowa State UniversityGoogleUniversity of Pennsylvania (REC only)Steelcase (REC only)BenefitsPotential cost savingsLong-term predictable pricingClear association with specific renewable energy facilityPotential to get naming rights to wind farm or renewable energy facilityChallengesNot legal in certain statesChange in risk profileInvestment grade credit requiredLonger timeframe procurement processComplexityPerformance risk
17Strategy #4: PPA with Yet-to-be-built Renewable Project Sign long-term power purchase agreement (PPA) with renewable energy project developerLong-term contract from large power off-taker is “bankable” and allows the project developer to more easily get financing from bank to build project10-20 year PPAEPA can assist with getting word out to project developers of interest in PPAProsDirect additionalityPotential power costs savingsElectricity price stabilityStimulate creation of local/regional clean tech jobsVisible/tangible commitment to renewable energyPotential to get naming rights to wind farm or renewable energy facilityConsNot legal in certain statesChange in risk profileInvestment grade credit requiredLevel of state incentives/rebates?Longer timeframe procurement processComplexityPerformance risk
18Strategy #5: Group Purchase of Bundled Green Power or RECs Form purchasing aggregation to make bulk purchase of bundled green power or RECs, or lead institutions inserts rider in contract so other institutions can sign on at later dateRFP could be distributed to suppliers or work with energy auctioneerPotential to work with suppliers to set up price reduction benchmarks based on total group kWh demand levelsPurchase contract can include stipulations on resource location (in-state or e-Grid region), type (wind, solar, etc), and contract lengthProsLeverage buying powerWith REC-only buy - no limitation on having to wait until contracts with current power providers endWith bundled buy – opportunity to reduce energy costsFlexible structure that will allow new members to join group at any time, and existing members to leave at end of contractConsColleges already have buying power, so purchase group may only realize marginal price reductionsWith REC-only buy - No opportunity to reduce cost of unbundled power
19Santa Clara University Solar power purchase agreement (PPA) with Perpetual Energy SystemsNo upfront capital requiredPurchase electricity at a predetermined, fixed rate968 kilowatt solar energy systemProjected to generate 1.42 million kWhSatisfies about 6% of the University's electrical energy needs.More significantly, it will support about 20% of summer day time demandLindsey Cromwell KalkbrennerSanta Clara University’s Director of Sustainability
20Luther College Luther’s Wind Turbine Community-Scale Wind 1.6 megawatt General Electric XLE wind turbineElectricity from the turbine will serve Alliant Energy's customers on the west side of Decorah, including Luther College5.2 million kWh of net electricity generated per year are enough to power more than 500 homes and represents approximately one third of Luther's annual consumptionCommunity-Scale WindLuther College has contracted to purchase the entire production of renewable energy certificates (RECs) from a community wind project, Windvision, LLC located in St. Ansgar, IA.The turbine is projected to produce at least 2.5 million kilowatt hours of electricity per year.Erika KambsLuther‘sEnergy and Waste Steward
21Discussion Who are you? What are the barriers you have encountered? How do we get to implementation?
22Want to Know More? Basic Information More Questions? An overview of Green Power Partnership is available on EPA’s Web siteTo see EPA’s Top 20 College and University Partners, please visit:To see EPA’s College & University Green Power Challenge, please visit:More Questions?Blaine Collison, EPA, ,Anthony Amato, ERG, ,