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Buying Green Power – An Important Step Toward Climate Neutrality

Apr 23 2009
Submitted by Niles Barnes on April 23, 2009 - 6:03pm

This is a Guest Blog from Walter Simpson,CEM, LEED AP, retired 26-year University atBuffalo Energy Officer and Director of UB Green.Walter is working with AASHE and the American College & University Presidents Climate Commitment to provide guidance to assist signatories of the American College & University Presidents Climate Commitment. We encourage readers to post comments and questions for Walter.Read Walter's past blogs here.

It goes without saying that switching to renewable energy resources is an important strategy for achieving climate neutrality and buying green power is one way of making that transition to carbon-free energy. This week I will be discussing green power purchasing but before I focus on that topic I want to put campus renewables in a conservation context.
 
Maybe it’s not sexy but energy conservation is “Job #1” for kicking the fossil fuel habit. Opportunities for serious energy conservation exist on all college and university campuses – even those that have been doing conservation for years. Through what might be called “deep conservation” (i.e. going well beyond picking the low hanging fruit and doing quick payback projects), campuses can reduce their energy use and fossil fuel use to a minimum. This is environmentally beneficial because nothing is cleaner than the kilowatt hour or BTU that is not used. Energy conservation also sets the stage for campus renewables by minimizing the amount of carbon-free renewable energy that schools need to generate or buy in the first place.
 
Reducing your renewable energy requirements through conservation is a big plus because (a) generating renewable energy on campus is expensive and can be difficult to do in any quantity and (b) buying green power can be expensive and imposes on-going annual costs. 
 
The Benefits of Green Power
 
There are a lot of good reasons to buy green power. It demonstrates civic leadership, provides a public relations benefit, and can increase campus morale by becoming a point of campus environmental pride.
 
Buying green power also provides an educational benefit by helping members of your campus community understand that conventional sources of electricity are dirty and that we can choose clean power. 
 
The most important benefit (though perhaps not always achieved) is that buying green power can catalyze the development of additional renewable energy generating capacity, and, in so doing, shift the regional mix of electricity generation away from fossil fuels. This is the primary reason purchased green power counts toward reducing your campus carbon footprint. 
 
What Are RECs and Green Tags?
 
It turns out that the green power you buy is not electricity from green sources but rather renewable energy credits or certificates, referred to as “RECs” or “green tags.” RECs represent the “environmental attribute” associated with renewable power and they typically cost 1 - 3 cents per kilowatt hour, a premium cost over and above purchased electricity. 
 
RECs or green tags are purchased in increments of 1,000 kilowatt hours (1 REC = 1,000 kWh or1 megawatt hour). RECs are created in direct proportion to the number of megawatt hours of electricity produced by a qualified green power producer. 
RECs are certified by an independent agency (i.e. Green-e, or your statewide public utility commission) to guarantee their actual “production” from a qualifying renewable energy source and to insure that they are not double-counted or sold to more than one customer. 
 
Qualifying sources of green power include solar electric (PV), wind, geothermal, and certain types of hydro, biomass and hydrogen fuel cell-derived power. 
 
Understanding and Addressing Doubts about Green Power
 
There is skepticism about green power and RECs in particular. Some argue that because RECs are not electric power, REC purchasers receive nothing of value other than bragging rights. While it’s easy to jump to that conclusion, buying RECs can have the same positive market effect as buying electricity from green generating sources. 
 
RECs are intended to provide a financing mechanism to expand renewable electricity generating capacity. They are a means for individuals, businesses and others to contribute to that development. If your school’s purchase of green power leverages more renewable generating capacity, then it has done its job.
 
Does green power purchasing always do this? Probably not. That is because there is no requirement of “additionality” in the green power market. Thus it is rarely clear whether a given green power purchase is responsible for forcing an additional quantity of renewable power into the electric grid. So concern is warranted -- though it can be addressed as I will explain below.
 
Over time the renewable energy market may move beyond RECs but for now campuses as well as business and residential customers interested in using their purchasing power to leverage renewable energy expansion must use the REC or green tag mechanism to do so.
 
Not All Green Power Is Equal
 
When the University at Buffalo first started to purchase green power 8 years ago, we selected wind energy as the green power of choice even though it was more expensive than other types of green power. We bought wind because we believed that of all the options at the time (which included landfill methane gas and low head hydro) buying wind energy was most likely to result in new wind generation capacity in New York State. The wind market is now growing rapidly in New York so that belief appears to have been well founded. 
 
To increase the amount of green power purchased while keeping costs down, UB is currently purchasing biomass-generated electricity. Biomass can be an acceptable choice though due diligence is needed to make sure that the biomass fuel used by the generator is produced in a sustainable manner. Forest destruction is not a green activity. Thus, the details are important and often need to be ferreted out.
 
Leveraging New Wind Farms and Real Carbon Reduction
 
Colleges and universities can improve the odds that their green power purchases will enlarge renewable energy capacity by purchasing green power through a long term contract with a developer who is actively planning a new wind farm or other renewable generator. With your long-term contract in hand, the developer is more likely to obtain financing at an attractive rate and therefore to proceed with the project. 
 
Your ability to use your green buying power to leverage that next wind farm also grows if you commit to a long-term contract for the electric output of the wind farm (the “commodity”) as well as the RECs. This approach can have additional benefits for your school if it locks in flat and predictable electricity pricing – thus providing a hedge against future electric price volatility.
 
I hope this discussion clarifies green power purchasing. While I believe bragging rights have a place in our green campus movement, what’s really important is national and global renewable energy capacity. A careful green power purchasing strategy can help increase that capacity.
 
Here are some green power purchasing resources:
 
Next week I will address greening your campus power plant. 
 
‘till then climateers!
 
Walter Simpson