GRC in the News | Renewable Energy Prize | 10.26.16

Lessons from a landmark aggregated energy deal in Boston

Read the full article on One Step Off the Grid

 

Recently, a world-class university, the largest Level 1 trauma center in New England, and a parking facility in the center of Boston’s Financial District came together to announce a landmark aggregated renewable energy deal to purchase 60 megawatts of solar from a North Carolina solar farm owned by Dominion, a Virginia-based energy company.

The deal highlights the importance of aggregation as a means to provide access to large-scale renewable energy projects for unique groups of buyers—not Fortune 500 corporations, but smaller businesses and nonprofits like universities and hospitals.

The Massachusetts Institute of Technology (MIT), Boston Medical Center, and Post Office Square Redevelopment Corporation signed the group transaction to enable the major solar project, which will power a significant portion of each party’s operations.

The proximity of the Boston-area buyers offered an additional incentive to pursue the transaction with guidance from A Better City, a Boston business leadership nonprofit convener, and the support of CustomerFirst Renewables, a member of RMI’s Business Renewables Center (BRC). The deal is the largest aggregated commercial and industrial (C&I) renewable energy deal in the Eastern U.S., and the largest publicly announced solar purchase by a higher education institution in the Eastern U.S.

The importance of aggregation

As renewable energy costs have fallen dramatically over the past few years—approximately 60 percent for solar and 40 percent for wind power since 2008—interest in making the transition to clean energy has grown significantly across the country, and desire for large scale, off-site renewable energy has expanded beyond traditional energy companies and utility buyers.

Corporate purchasers have led much of the nonutility renewable energy revolution, with 52 percent of wind power deals in 2015 coming from major brands. But increasingly, colleges and universities have also expressed interest in powering their campuses with affordable renewables.

That’s why the BRC and the Massachusetts nonprofit Second Nature just announced a partnership to provide higher education institutions with the resources and knowledge to execute renewable energy transactions. Along with hospitals and smaller C&I buyers, the potential of the aggregation market is significant.

“The Business Renewables Center has been tracking corporate deals for several years with great interest,” said Hervé Touati, managing director at the BRC. “Now we are especially pleased to see more aggregated deals with a strong mix of participants finding success in the commercial markets, as they will likely represent the next wave of growth in the market, allowing more and more companies to participate,” he said.

These aggregation deals, although still relatively new, bring together buyers from diverse backgrounds with a common goal: to procure clean, affordable power at fair market value from a reliable resource. As MIT, Boston Medical Center, Post Office Square, and their partners at A Better City and CustomerFirst Renewables have shown, this approach can produce a winning strategy for a variety of buyers.

“Pursuing solutions together opens doors for diverse organizations to access environmental and financial benefits on a size and scale previously unattainable,” said Gary Farha, CEO of CustomerFirst Renewables. “This exciting aggregated transaction is another pioneering solution that will deliver compelling value to the purchasers and furthers our mission to propel the adoption of large-scale renewable energy procurement across a wide range of institutions and businesses.”

Now, as universities, cities, and hospitals are building the next wave of renewable purchasing, their ability to fold their demand into a single, bankable deal—despite varying environmental goals, electricity loads, and financial needs—will open a major new market segment to developers across the country.

Find out how they did it, here.

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