Saving Energy: Insights and Ideas

Solar panels

PHOTO © THINNAPOB PROONGSAK

In order to produce Solar Renewable Energy Certificates (SREC s) or Solar Renewable Energy Credits, a solar system must first be certified by state regulatory agencies, usually public service commissions or public utility commissions, and then registered with the registry authorized by the state to create and track SRECs.

Colleges and universities tend to be at the cutting edge of innovation when it comes to energy, sustainability and general environmental issues for several reasons: First, their main client base — the students — demand it. From recent studies, approximately 66 percent of students claim their final choice for deciding to attend an institution relies on that institution’s environmental credibility. Second, they use copious amounts of resources, including energy and water. Between athletic facilities, classrooms, residence halls, dining halls and lighting and irrigating the grounds, these 24/7 environments, whether large or small, are major consumers, and their operational choices and practices have far-reaching environmental affects. Third, they typically own their buildings, so their interests in sustainability come from a long-range view regarding return on investment, because they would reap the long-term benefits of such investments. Lastly, while there are several other factors driving this, higher education institutions’ mission to educate is perhaps the most important driver for their interest in environmental stewardship.

Because of these and other drivers, more than 650 colleges since 2007 have joined what is known as the American College & University Presidents Climate Commitment (ACUPCC, http://second nature.org), which requires colleges and universities to track and report their carbon emissions, perform two of seven “tangible actions,” and develop and implement a campus-wide “climate action plan” (CAP) with the goal of achieving carbon neutrality by an institute-specified date. These tangible actions include everything from instituting a green building policy, which agrees to construct to meet — at minimum — LEED Silver equivalency; to establishing a policy for air travel offsets; and even for the purchase of Renewable Energy Credits (RECs) equivalent to — at minimum — 15 percent of an institution’s total electricity consumption. For reference, one REC equals one Megawatt-hour (MWh) of electricity into the grid.

A LOOK AT RECS

RECs represent a popular tangible action for several reasons. First, the process requires simple tracking of electrical energy use for an entire campus, which for most institutions is a standard procedure, even if it can be cumbersome for larger institutions who may be in a combination of owned and leased buildings. Second, RECs are good for the environment because they represent a monetary investment into the national energy grid at the point where renewables are most desirable to maximize their output (kWh/dollars invested). Because renewables are engineering solutions, they work better in certain contexts, i.e., solar in the Sun Belt, hydroelectric power in the Pacific Northwest, or offshore wind for campuses close to a coastline. In other words, they can be bought independent of source generation, which also places the competitive advantage with consumers.

dam

PHOTO © KWANCHAI.C

The federal Renewable Electricity Production Tax Credit (PTC), established by the Energy Policy Act of 1992, allows owners of qualified renewable energy facilities — hydroelectric and marine hydrokinetic (MHK ) (including wave, tidal, ocean thermal and hydrokinetic) — to receive tax credits for each kilowatt - hour (kWh) of electricity generated and sold by the facility.

The money spent on RECs invests that money where it can do the most good, rather than attempting to implement renewable projects onsite. RECs are not attempting to undermine onsite renewable energy projects as a strategy. What they offer is often the chance to do more than what can be accomplished on an individual site or project, particularly one where existing constraints make onsite renewable projects problematic (i.e., historic districts or urban areas with limited footprints). It is important to remember that nationally, we share the same energy grid; thus, an investment in RECs where they are most predicable is a smart practice. Lastly, it does not require a major retooling of the campus or a new infrastructure project; it is a simple estimate and purchase of the amount, which greatly simplifies the process compared with other tangible actions.

Even more importantly, RECs save money. They do so through locking in the price per the agreed upon amount of energy to be purchased at the point of sale over the course of the annual contract, up to 20 years. This price can be negotiated when prices are low to avoid the volatility of energy markets, which typically rise.

WHERE RECS ARE WORKING

In 2010, the Boston Architectural College, a small, urban private design school in Boston, MA, after signing onto ACUPCC, agreed to purchase 100 percent of its annual electricity (equivalent to 25 percent of its overall carbon emissions) from renewable wind, while also reducing their electricity cost — a victory for both the school and the environment. Institutions with much larger footprints, such as Harvard University, also follow this model. Harvard partnered with First Wind, a wind power production field in northern Maine, to get exclusive rights to half their output, equal to 10 percent of the university’s annual electricity consumption.

In other instances, colleges and universities have been able to justify the cost of ownership of renewable energy infrastructure, particularly where the size of their demand relative to the ability to produce the supply onsite aligned and where the mission of the college was tied to stewardship. For example, Carleton College (Northfield, MN) built a 1.65-MW turbine on their campus in 2004, making them the first college to do so. Not only was this a major PR and educational opportunity, it netted a sell-back rate of 3.3 cents/kWh over 20 years back to the local utility through a 1.5 cent/kWh state rebate and a 1.8 cent/kWh federal rebate. At an output of 5,000,000 kWh/year, the annual return of $165,000/year, ongoing, was worth the effort. While the savings are greater for owning equipment outright, RECs are a viable entry-level alternative suitable for smaller universities, urban and/or spatially constrained campuses, and others where capital investment for renewable infrastructure ownership is infeasible.

Windmill

PHOTO © TWIN DESIGN

Wind power — electricity generated by capturing the wind’s energy with modern wind turbines — is one of the lowest-cost renewable electricity alternatives currently available. Wind power is a clean, domestic electricity resource that has seen a tremendous amount of growth and technology improvement over the past several years.

PUTTING REC BENEFITS BACK INTO THE CAMPUS

Such investments represent major savings, which can be turned around to fund other “green” projects on campus. This is known as a “green revolving fund.” Such programs are self-sustaining through initial investments and grow as institutions become greener and more robust.

One example of the positive output of a green revolving fund is evident at Wheaton College, a small private liberal arts college in Norton, MA. There, a green revolving fund was set up and the proceeds from the savings funded an apple orchard for the campus. Such gestures are important because they engage with a wider community on a personal level. Whereas energy and carbon reduction may be abstract or even invisible for the majority of the campus community, that apple orchard represented a much more tangible outcome of the potential unleashed through sustainable capital projects.

In the case of Wheaton College, the project investment in RECs was done offsite. For onsite projects, this tangibility associated between the sustainable action and the benefit is much more powerful. Put differently, the general public may have an easier time recognizing “those wind towers and/or PV array saved us enough to buy this orchard,” or put another way, “something we value (funds) transformed this thing we didn’t want (carbon) into something we can enjoy (green capital project).”

In conclusion, in a time when tuition is rising, when colleges and universities are competing for enrollment, when the price of energy continues to surge, when prolonged droughts are the new norm, and when campuses are under pressure to “walk the talk” regarding sustainability, RECs — onsite or offsite — are becoming an ever-increasing means by which to promote resiliency, awareness and a cost-saving venture. Institutions can then reinvest their savings into onsite physical infrastructure through annual savings to grow these operational efficiencies and reduce their carbon footprints and to upgrade antiquated infrastructure, as well as promote meaningful, tangible capital projects, which are physical emblems and manifestations of their environmental commitments.

This article originally appeared in the December 2016 issue of College Planning & Management.

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