The Clean Energy States Alliance (CESA), a national, nonprofit coalition of public agencies working together to advance clean energy, recently announced the recipients of the 2014 State Leadership in Clean Energy Awards. According to CESA, the winning programs exemplify the ground-breaking work being done by states and municipalities in the arena of clean energy development and deployment.The programs nominated for these awards were submitted by state and municipal clean energy agencies from across the country. The entries were reviewed by a team of distinguished, independent judges and were scored based on public benefits and results, cost effectiveness, leadership and innovation and the ability to replicate.
This year’s winners are as follows:
- The Alaska Energy Authority and the Kodiak Energy Association for Kodiak, Alaska: A 99% Renewable Energy Community
- The Connecticut Department of Energy and Environmental Protection for the Connecticut Microgrid Program
- The Connecticut Green Bank for the Commercial Property Assessed Clean Energy (C-PACE) program
- The Energy Trust of Oregon for the City of Gresham Wastewater Treatment Plant
- The Massachusetts Clean Energy Center for the Massachusetts Clean Energy Internship Program
- The New Mexico Energy Conservation and Management Division for the Renewable Energy Production Tax Credit
- The New York State Energy Research and Development Authority (NYSERDA) for its CHP Acceleration Program
- The Sacramento Municipal Utility District for SMUD’s Community Renewable Energy Deployment Program
“These award winners illustrate the tremendous creativity and commitment being shown by state agencies across the country in implementing clean energy,” said Warren Leon, executive director of CESA. “With eight very different programs highlighting diverse technologies —including solar PV, wind, energy storage, hydropower, anaerobic digesters, microgrids, and combined heat and power — the 2014 State Leadership in Clean Energy award winners demonstrate that clean energy can create jobs, clean up the environment, and benefit local economies.”
Hailing the installations as “programs to emulate,” CESA believes projects such as these provide proof that the energy landscape is changing across America, revealing a new reality that is cleaner, more secure, and more sustainable. Solar panels and wind turbines are now common sights in all regions of the country, and state policies and programs have been primary drivers to get those projects deployed. Moreover, state and municipal clean energy agencies are developing effective strategies to advance emerging clean energy technologies and new finance tools.
Among other things, they are:
- Supporting innovative projects to get power from food waste
- Looking to distributed energy solutions such as combined heat and power (CHP) systems, microgrids, and energy storage to add resiliency and security to the electric power system
- Creating financial products so that clean energy loans can be bundled into financial offerings that are more attractive to investors
- Helping isolated communities power themselves almost exclusively by renewable energy sources
- Developing the workforce needed by the growing clean energy industry
Recipients of the 2014 State Leadership in Clean Energy Awards are diverse geographically, technologically, and in the size of their programs. But the two things they all have in common are their commitment to clean energy and their ability to get things done.
Following is a summary of several case studies that set excellent examples of what’s working today while providing outstanding models for future success in clean energy deployment:
Project #1: Alaska Energy Authority/KEA
Alaska’s Renewable Energy Fund, managed by the
Alaska Energy Authority, has catalyzed a movement towards renewable energy across Alaska by funding 277 renewable energy grants totaling $250 million over the past seven years. With support from the Fund, strong local leadership, and hard work, the
Kodiak Electric Association (KEA) has achieved more than 99 per cent renewable energy electric generation. KEA has developed a renewable energy grid that includes hydro power, wind, and battery storage technologies.
Alaska’s Renewable Energy Fund has made it possible for communities and villages across the state to study their renewable energy resources, conduct proper engineering designs for those projects that are economically and technically feasible, and construct their projects for the greatest public benefit possible. In the case of Kodiak Electric, which serves about 6,300 people on Kodiak Island, prior to the Renewable Energy Fund’s start in 2008, KEA generated approximately 60 per cent of its electricity from hydro power and 40 per cent from diesel.
Through multiple successful applications to the Renewable Energy Fund, KEA was able to conduct feasibility studies, design, permit, and construct two phases of wind development, adding six 1.5MW turbines on Pillar Mountain, just above the City of Kodiak. During phase two of the project, KEA added two 1.5MW (1MWhr) battery storage systems that provide 30 to90 seconds of bridging power to allow ramping up of output of a nearby hydroelectric system at times when the wind output decreases rapidly.
The addition of the battery systems has allowed the wind to be used without curtailment, and it allows more water to be stored at the hydro facility during times when the wind blows. Additionally, and with the financial support of the Renewable Energy Fund, a third hydroelectric turbine was added to the existing Terror Lake powerhouse to increase output by an additional 13.8 MW. Since the end of 2013, KEA has been able to shut off the diesel generators and allow the battery/hydro mix to fulfill their spinning reserve requirement. They also have enough hydro redundancy to allow for maintenance of hydro turbines without burning diesel fuel to generate power. For the first nine months of 2014, KEA generated 99.7 per cent of its power from renewable energy, resulting in significantly lower energy costs for the community by reducing its diesel fuel purchases to nearly zero.
KEA estimates that it saved its small community about $13 million in reduced fuel costs through the end of 2013. Over $4 million per year is now saved by the community, to the benefit of residents, seafood processors, the Coast Guard Base, and all other electrical customers. It has also cut diesel emissions to zero except for a few hours per year, resulting in cleaner local air and dramatically reduced greenhouse gas emissions.
The Renewable Energy Fund provided a total of $16 million of grant funding to launch Kodiak’s renewable energy projects. The Alaska Legislature provided an additional $7.7 million for the hydro construction phase, and the utility covered the remaining $12 million of the roughly $37 million project through loans and Clean Renewable Energy Bonds. Without the Renewable Energy Fund and the state’s earlier funding of the Terror Lake hydroelectric project, these projects would have been delayed or reduced in scope, or may not ever have come to fruition.
For the hundreds of other non-connected electric utilities in Alaska, this set of KEA projects demonstrates that the right renewable resources and good utility management can result in a clean energy portfolio with reduced or predictable energy costs. The replicability of Kodiak’s renewable energy projects would depend upon available local, renewable energy resources as well as outstanding utility commitment. This approach, though typically on a smaller level, is being replicated in many other small remote communities in Alaska; typically, wind-diesel systems or hydro-diesel systems are being installed. Both the funding mechanisms and the evaluation process used by these projects could be replicated by any state, local government or even a utility, to competitively find and fund the most cost-effective renewable energy projects.
The judges’ comments: “This project shows vision and leadership to achieve a remarkable level of renewable energy penetration. It is a shining example of long-term planning and effective implementation. Even though the project has unique features, it serves as a model for other communities in Alaska in terms of clean energy generation, and it can also serve nationally as a model for state, utility, and community-level partnership and accomplishment.”
Project # 2: CTDEEP
In 2011 and 2012, Connecticut experienced severe weather events that knocked out electric service to more than 2,000,000 residents. The Connecticut Department of Energy and Environmental Protection (CTDEEP) developed its microgrid program in the wake of those storms to provide reliable electrical service to critical facilities during times of grid outages and to increase the safety and quality of life of its residents. It funds the design, engineering, wiring, and interconnection costs for technically feasible microgrids that will best address Connecticut’s energy security, reliability and clean energy goals. CTDEEP encourages renewable generation in microgrids and encourages renewables to be paired with energy storage.
The Connecticut Microgrid Program claims to be the first program of its kind in the country, offering $45 million in funding over multiple rounds to support the development of municipal-led microgrid projects to support critical infrastructure with resilient power. With “islanding” technology that allows energy systems to disconnect from the main grid during a power outage, microgrids can keep the power on at critical facilities when the rest of the grid shuts down.
The CTDEEP program integrates several important energy policy goals, including the promotion of renewable generation and public-private investment to improve energy security, reliability, and resiliency for Connecticut citizens and businesses. The program’s innovative design leverages limited public funds with private funding sources to maximize the environmental and social benefits with the least cost to taxpayers. The program has also increased awareness and improved organization and communication around local resiliency efforts.
In Round 2, the Connecticut Microgrid Program is helping to advance Connecticut’s clean energy goals by limiting the amount of diesel generation in each microgrid to 25 per cent of the total generation capacity, and by allotting 10 per cent of the total project evaluation score for the use of renewable generation resources. In addition, the program requires the pairing of PV and wind resources with energy storage if those renewables are to be counted toward total microgrid generation capacity. In Round 2, every proposed project includes clean generation and three proposed projects include PV paired with energy storage. The program has funded 11 microgrids in its first two rounds of funding, with one project already commissioned.
CTDEEP has collaborated with the electric distribution companies and the Connecticut Green Bank to develop the parameters for the Connecticut Microgrid Program. The program emphasizes the development of public-private partnerships, including municipalities and private sector players to connect microgrids to critical infrastructure facilities. Because the program does not pay for generation or energy storage, applicants have sought private investment in the form of direct ownership of the generation assets or a purchase power agreement.
In Round 2 of the program, CTDEEP encouraged applicants to seek assistance from the Connecticut Green Bank to locate capital partners for the financing of clean energy generation assets. CTDEEP considers the cost of the grant on a $/kW basis to ensure that state dollars are spent in the most cost-effective manner possible. Not only has the Connecticut Green Bank increased awareness in the finance community about the nature and financial viability of microgrids (which include clean and renewable generation), but it has also qualified potential capital partners who are interested in financing the microgrid generation.
The judges’ comments: “Connecticut’s microgrid program is addressing an important issue: enhanced resiliency for communities during power outages. It could be readily replicated by other states that seek the multiple benefits of energy efficiency, resiliency, and deployment of renewable energy. CTDEEP has worked to improve the initiative through each subsequent round and shares its lessons learned with others interested in developing microgrid programs.”
Project #3: Connecticut Green Bank
The
Connecticut Commercial Property Assessed Clean Energy (C-PACE) program enables commercial, industrial, and multi-family building owners to access affordable, long-term financing for smart energy upgrades to their buildings. These upgrades save property owners money and increase property values. The
Connecticut Green Bank launched Connecticut’s C-PACE program in January 2013 and it quickly became the largest commercial PACE program in the US. In fact, within the first 22 months, C-PACE approved nearly $50 million for more than 60 clean energy projects, which will result in the deployment of more than 8 MW of solar energy and numerous other energy efficiency improvements across over 4 million square feet of buildings.
With C-PACE, building owners are able to secure 100 per cent upfront financing for clean energy upgrades to their businesses and buildings. How it works: Property owners place a voluntary assessment on their property tax bill, and then pay for clean energy improvements over time through this additional charge. Capital provided under the C-PACE program is secured by a lien on the property, so low interest capital can be raised from the private sector, with no government financing required. Building owners can be cash-flow positive from day one, because of the long term of C-PACE financing. This allows them to do deeper energy upgrades than they otherwise would have done. The repayment obligation transfers to the next owner, if the property is sold.
The Connecticut Green Bank developed and manages Connecticut C-PACE. Although PACE financing has been in practice for years, Connecticut’s C-PACE program has achieved notable success with its many innovations. Within a year of its launch, it was the largest in the country, bringing $20 million in financing to clean energy projects in Connecticut. In May 2014, it reached a landmark in its short history with the first-ever securitization of its commercial energy-efficiency loans.
Achieving this “holy grail of energy efficiency finance,” the deal helped prove that energy efficiency is able to attract private capital, catalyzing the PACE market and energy efficiency financing across the country. The Connecticut Green Bank also played a significant role in demonstrating proof of the warehouse model (whereby a portfolio of transactions — a “warehouse” of financed projects — which share a similar structure and underwriting standard could be bundled for sale in the financial markets) for commercial PACE loans that were used to fund energy efficiency in Connecticut commercial buildings.
C-PACE has energized the state’s clean energy economy by attracting private investment and deploying more clean energy to achieve greater public benefit. It works through a strong partnership among the state, local governments, and the private sector. One hundred Connecticut municipalities accounting for more than 83 percent of the state’s commercial and industrial building stock have signed onto the program, allowing for a tax lien to be placed on the property and the assessment to be serviced. The security of the tax lien provides confidence to the private market that the financing will be repaid and therefore private capital can flow to qualified buildings.
Since launching C-PACE, the Green Bank has approved more than 60 projects totaling nearly $50 million. The Green Bank has used its balance sheet to finance these transactions and then sold the transactions in bundles of roughly $10 million to a private capital provider. Closed and approved projects will result in a total savings in avoided electric and fuel costs that will exceed $97M in aggregate for the property owners. Projects closed and approved in the first 18 months of the C-PACE program alone will lead to an estimated 160 million kWh in electric savings and more than 320 million MMBTU in fuel savings over the lifetime of the projects.
The judges’ comments: “The C-PACE program helps meet the challenge of financing clean energy projects and upgrades. This new financing mechanism seems like an incredibly good approach to servicing energy loans. It could have a huge multiplier effect and attract significant private capital to leverage public investment dollars. The low-risks of this program to the building owner and the lender makes this an effective finance tool.”
Part II of the 2014 CESA Awards looks at several additional award-winning projects and programs, including; City of Gresham Wastewater Treatment Plant; The Massachusetts Clean Energy Center for the Massachusetts Clean Energy Internship Program; the New Mexico Energy Conservation and Management Division for the Renewable Energy Production Tax Credit; the New York State Energy Research and Development Authority (NYSERDA) for its CHP Acceleration Program; and the Sacramento Municipal Utility District for SMUD’s Community Renewable Energy Deployment Program.
REFERENCES
1. CESA member organizations from across the US submitted nominations for the leadership awards. Entries were judged based on public benefits and results, cost effectiveness, leadership and innovation, and replicability. Winners were chosen by an independent panel of distinguished judges: Steve Lindenberg (senior advisor for renewable power at the US Department of Energy); Andrea Luecke (president and executive director of the Solar Foundation); former Colorado Governor Bill Ritter (Director of the Center for a New Energy Economy); Larry Sherwood (vice president and COO of the Interstate Renewable Energy Council); and Robert Thresher (research fellow at the National Renewable Energy Laboratory).