Published May 18, 2018
Recent sustainability efforts at UB focus on using renewable solar energy to generate power. University leaders are currently exploring a large-scale power purchase agreement between the university and surrounding community.
A power purchase agreement (PPA) allows a buyer or buyers to purchase power at a certain price for given time for a specific project. PPAs make sense for higher education institutions because they require low capital investment.
Laura Hubbard, Vice President of Finance and Administration at UB, says that for a multi-partner, large-scale PPA, collaboration among all stakeholders is key. When Hubbard arrived at UB six years ago, she introduced integrated resource planning to help the university approach complex initiatives through conversations that connect the dots. Her approach has helped focus internal discussions about UB becoming the lead partner of Localizing Buffalo’s Renewable Energy Future purchase initiative, a cross-sector group of Buffalo-based organizations exploring a large-scale PPA. The projected purchase of 100 MW of new solar energy would be installed throughout Buffalo’s urban core — in parking lots, community centers, fire and police stations, and on the campuses of UB, Buffalo State and Erie Community College. Other partners in the proposed initiative include the city of Buffalo and Erie County.
Plans to install new solar energy over the next four years are projected to infuse more than $250 million in economic impact for the region and yield $125 million in energy savings, with each partner committing to purchasing at least 25 percent of its energy requirements through the agreement. Keeping the installations local will increase transmission efficiency by bringing the generated energy closer to where it will be consumed and using existing electrical infrastructure.
Ryan McPherson, Chief Sustainability Officer at UB, says using existing physical structures like rooftops will help preserve farmland and other open-space assets. In addition to decreased energy costs, the goal of the community solar initiative is to create a “solar web” that will help ensure local grid resilience and lower greenhouse gas emissions.
The proposed initiative also has to make sense for each partner involved. Hubbard says, “This is a journey of exploration and a process of identifying opportunities. And it’s not a given that all who start the process will ultimately sign the final agreement.” One of the challenges in a partnership of this nature is that each entity may have different legal requirements or internal practices. Hubbard says that despite agreement on a shared goal, you have to account for each entity maintaining the freedom to implement the agreement differently.
Tonga Pham, Associate Vice President of University Facilities, suggests allowing each entity the autonomy to address specific concerns and follow its own procurement processes. Pham says, “Especially when getting down to the contract details, you may need some arbitration to guide you through the group process and timeline.” The differences between a municipality and a state agency may require multiple versions of a contract to allow each partner to satisfy and adhere to its different legal structures and requirements.
UB is already a leader in sustainability among higher education institutions. In 2006, the university installed a 75 kW rooftop system that generated 6 percent of the building’s annual electrical power at $13 per watt installed. In 2009, UB partnered with the New York Power Authority to construct a 750 kW ground-mounted system at $9 per watt hour. By 2012, the price per watt for on-site solar had plummeted to $2.50 per kWh, says McPherson.
McPherson also says the sharp decrease in the price of solar in recent years has made it possible for university leaders to entertain a large-scale power purchase agreement. He adds, “While we haven’t wanted to be first out of the gate, enough examples now exist of other institution partnerships to provide some solid understanding of lessons learned.”