Large Scale Renewable EnergySummit Farms Power Purchase Agreement
Alignment with Plan for Action on Climate Change
Joe HigginsDirector, Infrastructure Business Operations
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Pillar A Improve our understanding of climate change and advance novel, targeted mitigation and adaptation solutions
Pillar B Accelerate progress towards low- and zero-carbon energy technologies
Pillar C Educate a new generation of climate, energy, and environmental innovators
Pillar D Share what we know and learn from others around the world
Pillar E Use our community as a test bed for change
One year ago….
Goal: Reduce campus carbon emissions by at least 32% by 2030from a 2014 baseline
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Summit Farms
60 Megawatts650 Acres255,000 Panels
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Summit Farms
60 Megawatts650 Acres255,000 Panels
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Why not New England?
Weak Market Fundamentals in New England
• Oversupply: Hydro from Quebec, new wind capacity and more stable gas sourcing costs expected to depress clearing price
• Congestion: Increasing risk for wind projects in ME• Scale: Few large scale projects in New England due to
land constraints
• Development Cost: Expensive due to high land cost and regulatory hurdles
• Resource Availability: Lower wind and solar resource hampers project economics
We evaluated 41 projects, across 14 states. Targeting a renewable energy project in New England was highly desirable, but came with many challenges.
11/41
2/41
0
> 11 New England Projects Evaluated
NE Project Selection Progression
> 2 NE projects projected positive NPVs (both ME wind projects)
Leve
lized
Sav
ings
($/M
Wh)
($40.00)
($30.00)
($20.00)
($10.00)
$0.00
$10.00
$20.00
Two New England projects were forecast to produce positive NPVs, however they weren’t selected due to elevated risk profiles
> Weak market fundamentals, community opposition, and developer risk weighed against NE projects
• Capacity Caps: Massachusetts placed a cap on the total amount of solar capacity net metering customers can connect to the grid—4 percent of peak demand for private installations. This cap has been reached in most all utility territories. New solar projects had ground to a halt. On April 5, the legislature approved compromise legislation lifting the net metering cap by 3 percent, but also cuts compensation rates by 40 percent for private-sector systems, diminishing project economics.
• Capacity Limits: Solar net metering facilities can’t be larger than 2MW, to reach a meaningful size for MIT we’d need to aggregate many small sites.
Challenges in Massachusetts
SummitFarmsNCSolar
Leveled Economics of 41 Projects Evaluated New England Projects
Favorable
Unfavorable
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Project significance
“ Largest aggregated purchase by non-affiliated parties in the U.S.
“
MIT’s purchase is the largest higher education solar purchase in the Eastern U.S.
““Reduces MIT’s campus emissions by 17% from our 2014 baseline
““Provides renewable energy equivalent to 40% of MIT’s campus electric use
““
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Plan for Action on Climate Change - Alignment
AImprove our understanding of climate change and advance novel, targeted mitigation and adaptation solutions
Technology solutions & strategies
B Accelerate progress towards low- and zero-carbon energy technologies Research opportunities
C Educate a new generation of climate, energy, and environmental innovators Educational opportunities
D Share what we know and learn from others around the world
Demonstrates leadership
Collaboration & partnerships
E Use our community as a test bed for change
Contributes to 32% reduction goal
Additionality
Environment & health benefits
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Programgrowth
2014MIT
Baseline
213,000
Exceed Goal
CentralUtility
Plant (CUP) enhancements
Efficiency gains in buildings
10% 10%
12 -15%
On-siteSolar
1-3%
Large scaleSolar project
17%
TBD Metric tons CO2e
Emissions reduction from2014 baseline
Large scale renewable energy plays a significant role in emissions reduction and alignment with our Plan for Action on Climate Change
Stage 1
Stage 2
Reduce campus carbon emissions by at least 32% by 2030 from a 2014 baseline
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Power Purchase Agreement (PPA) – How it works
Summit Farms
25 Year NPVRevenue $99 MCost $82 MSavings $17 M
Wholesale Energy Market
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
38,000 posts
Sun tracking panels
200 miles of wire
40 inverters
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Transmission connection 230,000 V
Collector substation34,500 V
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
What’s next?
• Performance validation
• Operationalizing
• Research & education integration
MA S S A C H U S E T T S I N S T I T U T E O F T E C H N O L O G Y
Sean AdamsOffice of Treasury and Planning
Margaret BrillOffice of the General Counsel
Don HolmesMaintenance and Utilities
Tom KileyOfficeoftheProvost
Monica LeeDepartment of Facilities Communications
Allen Marcum Office of Treasury and Planning
With special thanks to:Richelle NessrallaOffice of the General Counsel
Julie NewmanOffice of Sustainability
Nate NickersonOffice of VP for Communications
Frank O’SullivanMITEnergyInitiative
Ken PackardMaintenance and Utilities
Patrick RoweMITInvestmentManagementCompany