GRC in the News | Uncategorized | 05.10.17

Small Prize. Big Change.

Mariella Puerto, Sr. Program Officer of the Barr Foundation took some time to share her reflections on the Renewable Energy Leadership Prize (RELP) with Grantcraft. Launched in summer 2015, the goal of the $100,000 Renewable Energy Leadership Prize was to spur local leaders to take renewable energy purchases from concept to reality.

Without the Barr Foundation’s partnership and support in fostering joint energy procurement strategies, the RELP would never have been a reality.  Below Puerto shares her thoughts on continues support for joint procurement.

1. Prizes can spark action and innovation. 

Our initial hope and hypothesis was that a prize would catalyze action and innovation, and that turned out to be right. There was a risk that there would be no takers and we were pleasantly surprised to see such significant interest. The prize spurred the three applicants to devote considerable time and effort to solving the puzzle of buying offsite renewable electricity. The applicants were in different stages of readiness and had different factors motivating their actions, and the prize helped push them to their finish lines by creating deadlines for accomplishing what some had been planning to do for some time.

2. Identify a strong partner to administer the prize. 

We were fortunate that we had the GRC to partner with on the prize, as we did not have the in-house capacity to administer the prize ourselves. Comprised of key business and civic leaders and co-chaired by Boston’s Mayor and Barr Foundation’s trustee and founder, the GRC is also a highly credible and respected entity, which made it a suitable host of the prize.  The Commission staff handled the entire prize process—researching power purchase strategies, arranging technical assistance and guidance on purchase agreements, issuing the prize proposal requests, assembling a stellar selection committee of experts, and handling logistics and communications.

3. Collaboration takes time, but multiplies returns. 

The prize placed a high premium on collaborative proposals, with the theory that joint procurement and diversity of organization types (hospitals, higher education, private companies) would yield better results and shared learning.  While this created a barrier to wider participation, it also tested the theory that institutions could collaborate to negotiate stronger green power purchases. The collaborative nature of the projects did take more time, but made for better financial deals in the end, capturing significant financial benefits for the participating institutions.

In fact, the participants’ experiences in crafting and negotiating these deals have provided them with jumping-off points to continue their efforts and to inspire others. For example, A Better City is developing an energy procurement service for its members. The prize participants have also been very enthusiastic about sharing their learnings. To share the lessons learned from the prize, the GRC published a case study, called Solving the Puzzle.

4.  Be prepared for unexpected complications. 

While I knew going into this that the world of renewable energy purchasing was complex, I didn’t fully appreciate the range of challenges that the prize applicants encountered. All of our prize applicants went through twists and turns on the way to securing their deals.

There were huge price variations between technologies and regions. For example, as part of its proposal, A Better City’s group initially thought they would use and retire renewable energy credits (a mechanism to incentivize renewable energy) from New England. But, along the way, they discovered they could save money and have a bigger impact on emissions by looking outside of their region. New England’s power grid is largely free of coal. So, a New England solar project (which might displace natural gas in the power grid) will prevent less pollution than a similar project in the coal-heavy Southeast.  In the end, A Better City selected a solar farm in North Carolina.

Changing state, regional, and federal policies had major implications for the nature and timing of the deals.  Strong energy policies drive progress in clean energy, but can be difficult to understand and navigate.  At the time of the contest, state solar regulations and federal tax credits were both up in the air causing delays.  The applications, and the response from potential suppliers, were affected by this uncertainty.

Funders considering launching prizes need to be prepared for unforeseen events and conditions. But, in the end, all this complexity and persistence on the part of applicants was worthwhile because of the significant financial benefits which were captured by the prize applicants.

5. Long-term sustainability and goal alignment takes the prize.

Applicants for any prize may be motivated by the short-term benefit of the prize money and positive recognition. Yet, what our selection committee was most focused on was long-term commitment to the goals of the effort (in this case clean energy/carbon emissions reductions). Interestingly, all three finalists also demonstrated a strong case for financial sustainability. Even without the prize money or ongoing philanthropic support, the economics of their proposals would work over the long term.  As a result, all three finalist projects went forward – not only the prize-winning proposal.  While this happened in our experience even without specifying sustainability as an application requirement, future prize efforts might benefit from making that an explicit criterion.

Based on this experience, I would strongly encourage other funders to consider launching prizes as a way to unlock action and innovation. The Renewable Energy Leadership Prize was particularly useful here in Boston, where higher education, healthcare, and private companies have the potential to directly purchase renewable energy, and the prize motivated them to commit to such purchases. There is still work to be done to expand interest in renewable energy purchases and to make it easier for institutions to participate. But, the prize offered a major learning opportunity about what it takes for institutions and companies to engage in renewable energy purchases.

Read the full article here. 

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