Presentation Slides - Association for the Advancement of

Report
Procuring Renewable Electricity:
Strategies for Addressing Barriers for
Higher Education Institutions
U.S. EPA’s Green Power Partnership
Blaine Collison, Program Director, U.S. Environmental Protection Agency
Anthony Amato, ERG, support contractor to EPA
Tuesday, October 16, 2012
AASHE 2012 Conference
Los Angeles, California
Today’s Agenda
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Green Power 101 – What is it? How do you get it?
Current status of green power use within higher education
Barriers to green power procurement
Outside the box strategies and collaborative opportunities
Case studies – Santa Clara University & Luther College
Who are you? What do you want? What is stopping you?
How do we get to implementation?
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What is Green Power?
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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).
Biogas
Geothermal
Solar
Biomass
Small-Hydro
Wind
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Green Power Procurement Options
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Renewable Energy Certificates (RECs)
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Green Power Electricity Products
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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 generation
Does not include the underlying electrons – “unbundled”
a.k.a. Green Tags, Renewable Energy Credits
“Bundled” product from utility or competitive energy supplier that
includes both the RECs as well as the underlying electrons
On-site Generation
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Install a renewable energy system on-site (e.g. solar panels, wind
turbine)
Produces both electricity and RECs from the on-site source
Self-financed installation or via a third-party PPA
To claim “use” of green power, host needs REC ownership
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Renewable Energy Certificates
Long-term REC contracts
with credit-worthy
counter parties can help
finance new renewable
projects
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Value Proposition of Renewables
for a College Campus
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Meet environmental objectives
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Reduce exposure to fossil-fuel price
volatility
Deploys quickly & scales up easily
Enhance school brand
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Prospective students
Host communities
Peer institutions
Attract & retain students
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Manage risk
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Sustainability goals
GHG reduction targets
American College & University
Presidents Climate Commitment
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Sustainability and green power is
a hot topic on campus
Incorporate green power into
research initiatives & curricula
Drive economic development
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Higher ed commitments are financeable
Domestic energy supply
New U.S. jobs
Did 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
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Current Status: Green Power in
Higher Education
EPA’s Green Power Partnership
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123 College and University Partners
Green power use totaling nearly 2.2 billion kWh
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Equates to ~5% of voluntary green power market
Emission avoidance equivalent to the CO2 emissions from the electricity use of
190,000 average American homes for one year
American College & University Presidents’ Climate Commitment
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657 Signatories committed to becoming climate neutral
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Purchased electricity currently constitutes ~40% of their GHG emissions
237 Schools committed to Tangible Action #5
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Within one year of signing commitment, begin purchasing or producing at least 15%
of institution's electricity consumption from renewable sources
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Opportunities in Green Power Space
for Higher Education Institutions
Unique Properties of Higher Education Institutions …..
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Engaged stakeholders
Financial stability/credit-worthiness
Focus on longer timeframes
Large geographic footprint
Role in civic society
....Offer Unique Opportunities with Renewables
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Large on-site renewable installations (owned or via PPA)
Utility-scale off-site projects
Collaborative purchasing
Student purchasing for dorm rooms
Development of new renewable technologies via research
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GPP Intensifying Focus on College
& Universities
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Collaboration with Second Nature – the NGO behind the ACUPCC
– to assist schools with overcoming barriers to renewable energy
adoption
Webinar series focused on issues, barriers, and successes within
higher education
New 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 US
 electricity demand of over 3.5 million average American homes
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Potential Roles of EPA & Second
Nature
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Group convener and facilitator
Build/Gauge consensus on preferred procurement
strategy(ies) of school or group of schools
Match-maker
Assistance reviewing/developing RFIs/RFQs/RFPs
EPA network of resources
Example of best practices
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Barriers to Renewable Energy
Adoption
Green Power Purchase
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Power/REC cost
Transaction cost
Unfamiliarity with
procurement options
Comfort with REC concept
Perceived barriers
On-site Deployment
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Up-front capital costs
Transaction cost
Limited site
availability/quality
Outside of core
competencies
System performance risks
Maintenance responsibilities
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Additional Procurement Criteria and
Potential Implications
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Project specific
Geographic proximity
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On-site, community-based,
in-state, in-region
“Direct” additionality
Bundled product
Cost savings
Low risk
Community-scale
Cause-focused
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Deal complexity
Resource limitation
Cost implications
Timing implications
Risk implications
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What Procurement Strategies Can
Help Schools Overcome Barriers?
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Third-Party Financed Solar Power
Collaborative Purchases of On-site Renewable Systems
Utility-Scale Power Purchase Agreements
Power Purchase Agreements with Yet-to-be-Built Project
Green Power Buying Groups
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Strategy #1: Third-party Financed
Solar Power
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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 predetermined period
Challenges
Benefits
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No up front capital cost
Potentially cash flow positive from day
one
Predictable pricing
No system performance or operating risk
Visible/tangible commitment to
renewable energy
Potential reduction in carbon footprint (if
associated RECs are retained)
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Financial viability may be dependent
on utility/state/federal incentives
Site lease may limit ability to make
changes to property that would affect
PV system performance or access to
the system
Messaging without REC ownership
Not legal in four states
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Strategy #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 campus
Various financing options (direct purchase, PPA, equipment lease)
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Benefits
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Reduce the cost of PV systems through
volume purchasing (10-15%)
Reduce vendor/installation costs through
economies of scale and standardization
Reduce transactions costs and
administrative effort (50%-75%)
Minimize workload for participants by
using turnkey installations of solar
systems
Stimulate creation of local clean tech jobs
Potential for hands-on student learning
Visible/tangible commitment to renewable
energy
Challenges
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Quality of resource (solar, wind)?
Level of state incentives/rebates?
Longer timeframe procurement
process
Complexity
Possible ownership and maintenance
responsibilities
Messaging without REC ownership
For more information see:
http://www.epa.gov/greenpower/cecp/documents/MWDC_CleanEnergyProcurement_HigherEd.pdf
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Strategy #3: Utility-scale Power
Purchase Agreement
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Direct off-take from specific renewable energy facility
Long-term power purchase agreement (10-25 years)
Purchase of bundled power and RECs
Recent Examples
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Benefits
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Potential cost savings
Long-term predictable pricing
Clear association with specific
renewable energy facility
Potential to get naming rights to
wind farm or renewable energy
facility
Ohio State University
Iowa State University
Google
University of
Pennsylvania (REC only)
Steelcase (REC only)
Challenges
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Not legal in certain states
Change in risk profile
Investment grade credit required
Longer timeframe procurement
process
Complexity
Performance risk
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Strategy #4: PPA with Yet-to-bebuilt Renewable Project
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Sign long-term power purchase agreement (PPA) with renewable
energy project developer
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Long-term contract from large power off-taker is “bankable” and allows the
project developer to more easily get financing from bank to build project
10-20 year PPA
EPA can assist with getting word out to project developers of interest in
PPA
Pros
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Direct additionality
Potential power costs savings
Electricity price stability
Stimulate creation of local/regional clean
tech jobs
Visible/tangible commitment to renewable
energy
Potential to get naming rights to wind
farm or renewable energy facility
Cons
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Not legal in certain states
Change in risk profile
Investment grade credit required
Level of state incentives/rebates?
Longer timeframe procurement
process
Complexity
Performance risk
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Strategy #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 date
RFP could be distributed to suppliers or work with energy auctioneer
Potential to work with suppliers to set up price reduction benchmarks
based on total group kWh demand levels
Purchase contract can include stipulations on resource location (in-state
or e-Grid region), type (wind, solar, etc), and contract length
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Pros
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Leverage buying power
With REC-only buy - no limitation on
having to wait until contracts with
current power providers end
With bundled buy – opportunity to
reduce energy costs
Flexible structure that will allow new
members to join group at any time,
and existing members to leave at end
of contract
Cons
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Colleges already have buying power,
so purchase group may only realize
marginal price reductions
With REC-only buy - No opportunity
to reduce cost of unbundled power
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Santa Clara University
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Solar power purchase agreement (PPA)
with Perpetual Energy Systems
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No upfront capital required
Purchase electricity at a predetermined, fixed
rate
● 968 kilowatt solar energy system
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Projected to generate 1.42 million kWh
Satisfies about 6% of the University's electrical
energy needs.
More significantly, it will support about 20% of
summer day time demand
Lindsey Cromwell Kalkbrenner
Santa Clara University’s Director of Sustainability
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Luther College
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Luther’s Wind Turbine
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1.6 megawatt General Electric XLE wind turbine
Electricity from the turbine will serve Alliant
Energy's customers on the west side of Decorah,
including Luther College
5.2 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 consumption
Community-Scale Wind
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Luther 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 Kambs
Luther‘sEnergy and Waste Steward
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Discussion
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Who are you?
What are the barriers you have encountered?
How do we get to implementation?
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Want to Know More?
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Basic Information
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An overview of Green Power Partnership is available on EPA’s Web
site www.epa.gov/greenpower
To see EPA’s Top 20 College and University Partners, please visit:
www.epa.gov/greenpower/partners/top20ed.htm
To see EPA’s College & University Green Power Challenge, please
visit: www.epa.gov/greenpower/partners/hi_ed_challenge.htm
More Questions?
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Blaine Collison, EPA, 202-343-9139, [email protected]
Anthony Amato, ERG, 781-674-7225, [email protected]
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