September 19, 2018
Boston University (BU) just announced a breakthrough that follows Sustainability Roundtable Inc. (SR Inc ) Charter Member MIT’s lead. As well as the leadership of SR Inc Charter Members such as Akamai Technologies, Bloomberg, Cisco, Facebook, HP, Intuit and Salesforce who have led in demonstrating the environmental and business advantages of Virtual Power Purchase Agreements (VPPA) (see SR Inc’s Blog on VPPA Benefits and Risks). BU has committed to a 48.6 MW VPPA over 15 years that will enable the financing of a new utility-scale wind farm in South Dakota. True to its educational mission, BU has provided a helpful, detailed, explanation of how and why BU entered into this transaction.
This new wind farm, developed by the North American subsidiary of the giant French energy conglomerate Engie, will provide BU with 205,000 national “Bundled Renewable Energy Certificates” (RECS) each year which clearly represent “additional” renewable energy from 2020 to 2035 (see SR Inc’s Blog on Not All RECs Are Created Equal). The legal provision stipulating the RECs BU will procure is ‘bundled into’ the same VPPA contract that finances the new wind development. Consequently, the RECs BU is procuring – and promising to retire (i.e. not re-sell) – like all so called “Bundled RECs” provide the clear “additionality” sophisticated “Off-takers” (i.e. REC buyers) seek. Moreover, theses more credible Bundled RECS will be from a wind development that will displace 2-3X more GHG emissions than a similar size development would, if it was built on New England’s cleaner grid.
This represents another case study in how the world’s smartest enterprises can drive to 100% renewable energy and net zero emissions in a manner aligned with Science Based Targets while avoiding entirely “Unbundled RECs” and related reputational risk. And how enterprises can simultaneously use the no capex VPPA transaction to benefit from the growing cost advantage that utility-scale renewable energy enjoys over coal and natural gas in a growing number of US markets – even before existing but declining federal subsidies are considered.
BU provides a helpful explanation of its new Power Purchase Agreement on BU’s sustainability page here. What it leaves out is how surprisingly economically favorable these transactions can be now that utility scale renewable energy provides an increasing cost advantage over the local market the new renewable energy development will sell into in a growing number of U.S. markets – even before the relevant, substantial, but declining, federal tax subsidy for large scale wind is considered. For more information about developing a strategy to integrate advanced energy solutions into your operations, On-site Purchase Agreements, PPAs, Off-site VPPAs, Community Solar, Green Tariffs, Bundled and Unbundled RECs as well as Science Based Targets and related Sustainability Reporting, don’t hesitate to reach out to SR Inc regarding our confidential Strategic Advisory & Support Service that has assisted more than 75 Fortune 500 companies, major landlords and federal agencies on a multiple year basis over the last ten years.
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Jim Boyle is CEO & Founder of Sustainability Roundtable, Inc. For more than ten years, Jim has led full-time teams of diverse experts assisting world-leading corporations, real estate owners, and federal agencies in their move to greater sustainability. He has led in developing SR Inc’s confidential, industry specific, annual management assessment and recommendation process for more sustainable operations and real estate that is compatible with major public standards globally. Further, he has directed the development of hundreds of pieces of SR Inc original, case based Management Best Practices Research and Executive Guidance & Tools available in SR Inc.’s digital library. Mr. Boyle also led in the creation of SR Inc’s Renewable Energy Procurement Services (REPS), which advises and represent Fortune 500 Member-clients and rapidly growing public companies across the U.S. and internationally in the development of Renewable Energy Strategies and the procurement of both on and off-site advanced energy solutions. Before founding SR Inc, Mr. Boyle advised fast growth technology firms, private equity firms, and institutional investors as an adviser on real estate strategy and transactions, and before that, as a large law firm attorney assisting corporate and investment clients on complex real estate and environmental compliance-related issues. He co-led Trammell Crow Company Corporate Advisory Services in San Francisco and returned to his native Boston and Trammell Crow Company’s market leading team in Greater Boston where he received the Commercial Brokers Association’s Platinum Award for the highest level of commercial real estate transactions. While at Trammell Crow Company, he incorporated and was the principal co-founder of the Alliance for Business Leadership, a MA based non-profit for CEO, investors and business leaders who share a commitment to public policy that advances a more broadly shared and sustainable prosperity. Jim is a graduate of Middlebury College and Boston College Law School, who early in his career served as a federal law clerk, an aide to John F. Kerry in the U. S. Senate and on Vice President Al Gore’s campaign for President. He lives in Concord, MA with his wife and two children and writes and speaks regularly on management best practices in more sustainable business. See e.g., Could LEED for Existing Buildings Transform the Building Industry, Urban Land and An Unprecedented Opportunity & Moment for CRE, CoreNet Global, LEADER, September 2016.
