Large Scale Renewable Energy Summit Farms Power Purchase Agreement

Transcription

1 Large Scale Renewable Energy Summit Farms Power Purchase Agreement Alignment with Plan for Action on Climate Change Joe Higgins Director, Infrastructure Business Operations

2 One year ago. Pillar A Pillar B Pillar C Pillar D Pillar E Improve our understanding of climate change and advance novel, targeted mitigation and adaptation solutions Accelerate progress towards low- and zero-carbon energy technologies Educate a new generation of climate, energy, and environmental innovators Share what we know and learn from others around the world Use our community as a test bed for change Goal: Reduce campus carbon emissions by at least 32% by 2030 from a 2014 baseline

3 Summit Farms 60 Megawatts 650 Acres 255,000 Panels

4 Summit Farms 60 Megawatts 650 Acres 255,000 Panels

5 Why not New England? We evaluated 41 projects, across 14 states. Targeting a renewable energy project in New England was highly desirable, but came with many challenges. NE Project Selection Progression 11/41 2/41 0 > 11 New England Projects Evaluated > 2 NE projects projected positive NPVs (both ME wind projects) > Weak market fundamentals, community opposition, and developer risk weighed against NE projects Leveled Economics of 41 Projects Evaluated Levelized Savings ($/MWh) $20.00 $10.00 $0.00 ($10.00) ($20.00) ($30.00) ($40.00) Favorable Summit Farms NC Solar Two New England projects were forecast to produce positive NPVs, however they weren t selected due to elevated risk profiles New England Projects Unfavorable 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 Challenges in Massachusetts 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.

6 Project significance MIT s purchase is the largest higher education solar purchase in the Eastern U.S. 17% Reduces MIT s campus emissions by from our 2014 baseline 40% Largest aggregated purchase by non-affiliated parties in the U.S. Provides renewable energy equivalent to of MIT s campus electric use

7 Plan for Action on Climate Change - Alignment A Improve 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 Contributes to 32% reduction goal E Use our community as a test bed for change Additionality Environment & health benefits

8 Reduce campus carbon emissions by at least 32% by 2030 from a 2014 baseline Emissions reduction from 2014 baseline 2014 MIT Baseline 213,000 Metric tons CO2e Program growth 10 % 10 % % Central Utility Plant (CUP) enhancements Efficiency gains in buildings 1-3 % On-site Solar 17 % Stage 1 Large scale Solar project TBD Stage 2 Large scale renewable energy plays a significant role in emissions reduction and alignment with our Plan for Action on Climate Change Exceed Goal

9 Power Purchase Agreement (PPA) How it works Summit Farms 25 Year NPV Revenue $99 M Cost $82 M Savings $17 M Wholesale Energy Market

10 38,000 posts 200 miles of wire 40 inverters Sun tracking panels

11 Collector substation 34,500 V Transmission connection 230,000 V

12 What s next? Performance validation Operationalizing Research & education integration

13 With special thanks to: Sean Adams Richelle Nessralla Office of Treasury and Planning Office of the General Counsel Margaret Brill Julie Newman Office of the General Counsel Office of Sustainability Don Holmes Nate Nickerson Maintenance and Utilities Office of VP for Communications Tom Kiley Frank O Sullivan Monica Lee Ken Packard Department of Facilities Communications Maintenance and Utilities Allen Marcum Patrick Rowe Office of the Provost Office of Treasury and Planning MIT Energy Initiative MIT Investment Management Company