Media
10/30/14

ACUPCC (Part III): Creative financing and energy solutions help colleges reduce GHG emissions

The ACUPCC recognizes the necessity of reducing emissions to mitigate climate change and adverse health impacts. Signatories are required to develop an inventory of all GHG emissions and a Climate Action Plan (CAP) outlining emission reduction strategies and milestones (read Part I and Part II in this series to learn more about developing a GHG inventory and Climate Action Plan). In crafting solutions to meet the AUCPCC’s framework, signatories have several financing mechanisms and project implementation strategies to consider.
 

FINANCING OPTIONS FOR ENERGY CONSERVATION PROJECTS

There are several options available to help fund energy conservation projects with minimal financial exposure and risk, including revolving loan funds, power purchase agreements and Energy Performance Contracting (EPC), to name a few. The ACUPCC has recognized Energy Performance Contracting in particular as an extremely effective vehicle to advance comprehensiveenergy efficiency retrofits by leveraging the savings generated to fund the capital improvements. Oftentimes, capital bonds and tax-exempt loans can also be leveraged to enhance the ultimate financial outcome.

For example, the Dimock Center, a non-profit health center located in Roxbury, Mass., recently leveraged an Energy Savings Performance Contract (ESPC) for a critical boiler decentralization project. Completed a year ahead of schedule and significantly under budget, SourceOne served as owner’s representative for this ESPC, managing the full design and construction phases for the replacement of the existing central steam plant with distributed boilers. Following project completion in October 2013, the Dimock Center now benefits from guaranteed savings valued at $150,000 per year, greater energy efficiencies, and improved occupant comfort (Read more about the Dimock Center’s boiler decentralization project HERE). By leveraging this innovative financing model, signatories can finance the cost of the project from the future estimated savings resulting from the capital improvements.
 

THE UNIVERSITY OF PENNSYLVANIA LEVERAGES “GREEN STEAM” TO HELP MEET ITS ACUPCC COMMITMENT

Since each college and university’s campus, infrastructure and environmental footprint is diverse and unique, signatories can follow various paths to meet climate neutrality. As the first Ivy League signatory of the ACUPCC, the University of Pennsylvania (Penn) launched its Climate Action Plan in September 2009 and has committed to achieving climate neutrality by the year 2042. Penn has undertaken several significant efforts to improve sustainability in all aspects of campus life and operations, including developing a centralized system to track steam consumption, implementing several smart meter installations and leveraging highly efficient and sustainable “Green Steam” supplied by Veolia North America.
 
 
"Green Steam is an innovative environmental solution that captures and reuses heat that was previously lost to the environment. All systems on campus that require thermal energy - heat, hot water, lab equipment, humidifiers – are supplied with “Green Steam which totals about half of Penn's energy usage. As part of Veolia’s recently extended steam supply agreement with Penn, Veolia completed the replacement of an older, less-efficient oil-fired boiler with two new, natural gas-fired rapid-response boilers to significantly reduce GHG emissions and increase the overall efficiency of Veolia’s steam service. Veolia's multi-million dollar investment in energy infrastructure increases efficiency and reduces annual carbon emissions by the equivalent of 70,000 cars removed from the streets. According to Penn’s Climate Action Plan, the improvements are expected to reduce Penn’s emissions associated with steam by an estimated 10 percent (overall campus emissions are estimated to drop 2 percent).
 

NEW YORK UNIVERSITY'S CHP PLANT ‘POWERS ON’ THROUGH HURRICANE SANDY 

New York University (NYU) is also a signatory of the ACUPCC and has committed to reaching a zero-emission climate neutrality goal by 2040. According to NYU’s Climate Action Plan, launched in March 2010, the energy required to heat, cool, and power university buildings accounts for 96.5 percent of NYU’s direct GHG emissions. Therefore, reducing energy consumption through energy efficiency and leveraging clean energy are both fundamental strategies outlined in NYU’s CAP. NYU’s Climate Action Plan is structured around four major emissions reduction strategies, as follows:
  1. Reduce energy intensity
  2. Generate and use cleaner energy
  3. Generate renewable energy
  4. Reduce or offset remaining emissions
To help the achieve its emission reduction targets, save money and meet increasing electricity demands, New York University decided to expand its existing cogeneration plant on its Greenwich Village campus in 2010. Serving as owner’s representative, SourceOne led the redevelopment of the expanded Combined Heat and Power (CHP) plant which serves the electrical needs for 22 campus buildings and steam and hot water for 37 campus buildings (Reference). According to NYU’s Climate Action Plan, the expanded cogeneration plant accounts for the single largest reduction in GHG emissions to date, representing a 23 percent decrease in total campus emissions since 2006. According to the EPA, NYU's cogeneration system prevents an estimated 43,400 tons per year of GHG emissions and reduces the university's energy costs by over $5 million annually.

NYU’s cogeneration plant proved to be critical in ensuring reliable power and heat supply following 2012’s Hurricane Sandy. In the fall of 2012, Hurricane Sandy, left millions without heat and power and caused $50 billion in damages. While the majority of Manhattan was without power, most of NYU’s Greenwich Village campus had electricity, heat, and hot water. NYU was able to generate electricity and heat on its own from its expanded cogeneration plant (learn more about NYU’s experience HERE). The campus quickly became a haven for staff, students and surrounding community members without heat and power. Following the storm, it became a command center for emergency workers throughout Manhattan. In 2013, the U.S. Environmental Protection Agency (EPA) awarded NYU with the Energy Star CHP Award. As one of five award recipients, the EPA selected NYU for its efforts in reducing emissions and increasing energy reliability and efficiency for its cogeneration plant.
 

ACUPCC AS A FRAMEWORK TO GUIDE ENERGY EFFICIENCY AND SUSTAINABILITY

Colleges and universities are the perfect partner to advance sustainability and emissions reduction efforts to mitigate climate change. The nation’s 4,000-plus private nonprofit and public colleges and universities educate more than 20 million students each year and own and manage tens of thousands of buildings, heating and cooling millions of square feet each day. The ACUPCC provides a solid framework to help colleges and universities implement advanced energy solutions to reduce emissions, save money and improve efficiencies.