Powering Portfolio-wide Real Estate & Operations with Renewable Energy

July 20th, 2017

Unsubsidized wind and solar have been hurdling down their respective cost curves and have become financially-competitive with conventional energy sources. As an example, Tucson Electric’s signing of a solar & storage PPA for less than 4.5¢/kWh in May represents the new US integrated solar & storage price benchmark. This is the latest example of aggressive price reductions over the past 2-3 years that have promoted an equally aggressive growth of renewable energy capacity, consistently outperforming traditional energy forecasts. Concurrently, more and more companies are committing to various sustainability, GHG emission, and renewable energy targets, with 101 RE100 companies (and counting) committed to 100% renewable energy globally.

Many SR Inc Sustainable Business & Enterprise Roundtable (SBER) Member-clients are leading globally on corporate procurement of renewable energy. On June 15th, Bay-area SR Inc Member-clients gathered at Salesforce’s HQ in San Francisco to discuss the latest best practices in corporate procurement of renewable energy and how they might take advantage of innovative procurement mechanisms to reach their sustainability goals portfolio-wide.

The Opportunity

SR Inc closely tracks trends and developments in the fast-paced renewable energy market and has been advising its Member-clients on these movements and their significance for more than nine years. Some of the more important include the following:

1. Utility scale wind and solar has achieved cost-parity with coal and NG: Utility scale wind and solar costs have declined rapidly in the last year, particularly through the integration of storage. As of December 2016, solar and wind prices were the same or cheaper than coal in more than 30 countries without subsidies, and solar continues a cost decline of 20% compounded annual rate (WEF, 2016).

2. Corporate commitments to 100% renewable energy are rising fast: The number of companies committing to 100% renewable energy globally (101 just within the RE100 with more than 3 dozen others not within the RE100) has risen nearly 50% since last year’s Q2 Symposium. As their total energy demand far exceeds their portion currently sourced from renewables, the potential for renewable energy growth remains very strong.

Figure 1: Important considerations to developing 100% Renewable Energy Goals. Sourced from Salesforce presentation (Sher, M., 2017).

Figure 1: Important considerations to developing 100% Renewable Energy Goals. Sourced from Salesforce presentation (Sher, M., 2017).

3. Corporate off-site RE procurement has typically required large commitments: While the number of off-site corporate off-taker PPAs have been declining, the average size of each deal has been increasing faster, resulting in an increasing rate of procured renewable energy.

4. Many leaders are transitioning to the procurement of bundled RECs: While the purchase of unbundled RECs (expense only) is an important gateway for corporations to start experimenting with renewable energy claims, a growing number of leaders are setting more aggressive targets that prioritize bundled RECs along with their associated power. WRI’s Corporate Renewable Energy Buyer’s Principles make this priority clear: “We are increasingly interested in access to bundled energy and REC products.   Unbundled RECs do not deliver the same value and impact as directly procured renewable energy from a specific project or facility.” (WRI, 2016)

Figure 2: In December 2015, the Federal Solar ITC (Investment Tax Credit) & Wind PTC (Production Tax Credit) were extended to begin phasing out in 2020 and 2017, respectively. (BRC, 2017)

Figure 2: In December 2015, the Federal Solar ITC (Investment Tax Credit) & Wind PTC (Production Tax Credit) were extended to begin phasing out in 2020 and 2017, respectively. (BRC, 2017)

5. Member-clients want small-scale tranches of grid-proximate renewable energy projects: Most companies cannot make the large-scale commitments that have generally dominated off-site PPA deals for procuring bundled RECs while achieving additionality.

The culmination of these trends amounts to the need for a flexible procurement mechanism capable of harnessing the growing interest in renewable energy by smaller corporate buyers, economies of scale, and bundled RECs simultaneously. A re-evaluation of the VPPA is unveiled a potential solution.

The Virtual Advantage

Virtual Power Purchase Agreements (VPPA) have gained traction over the last four to five years due to their ability to provide corporate off-takers with a variety of attractive financial, operational, and sustainability-oriented characteristics. In a VPPA, an off-taker and supplier agree on a contract price (or “strike price”), which will effectively serve as the price that the off-taker will pay for energy over the contract term. The supplier sells its electricity to the grid at the locational marginal price (LMP). If the LMP is greater than the strike price, the supplier will pay the off-taker the difference between the contract price and LMP for the associated amount of energy bought. Similarly, if the LMP is less than the contract price, the off-taker will pay the supplier the difference. Thus, the supplier is always effectively paid, and the off-taker always effectively pays the contract price for the energy regardless of fluctuations in the wholesale market. Variations on this basic mechanism can be tailored to suit best the off-taker appetite for risk and upside cash flow as well as the core financing needs of the developer to build and operate the renewable energy system. Regardless, the off-taker is transferred the bundled RECs with crystal-clear additionality claims.

Figure 3: A schematic of the VPPA structure (NRG, 2017)

Figure 3: A schematic of the VPPA structure (NRG, 2017)

  • Positive NPV: While Contract-for-Differences (CFD) are not new to the finance world, structuring VPPAs in this way has allowed for the developer to secure financing while simultaneously allowing the off-taker to hedge both electricity price increase and, with tailored “collar”-type mechanisms, volatility. A well-designed hedge allows corporations to come out ahead financially, as opposed to continuing to be vulnerable to inexorable market price increases over time and separately expending money on unbundled RECs. Furthermore, off-takers can participate with no upfront capital expenditure.
  • Additionality: PPAs, with their associated bundled RECs, provide a clear additionality advantage over the simple purchase of unbundled RECs on the national market. See our previous Not All RECs Are Created Equal post for more on this delineation.
  • Flexibility: Since the transaction directly between the supplier and off-taker is purely financial, VPPAs allow corporations the flexibility to target the energy use of multiple load locations and operational profiles without the explicit treatment of power delivery. Furthermore, VPPA’s enable companies to take advantage of renewable energy projects with more attractive natural resources (e.g. wind and sun) and financials regardless of proximity to their actual energy demand location(s).
  • Risk-spreading: Unlike physical PPAs, VPPAs allow for the aggregated procurement of renewable energy on behalf of multiple corporate off-takers, not only spreading-risk, but also opening the opportunity for system size economies of scale to multiple off-takers who don’t have enough energy demand to justify a large project on their own. While the versatility of VPPAs make it a useful tool, it is important to make sure it is the right tool for the job for your company and required management response.

Management Response

Develop a portfolio-wide renewable energy strategy integrated with your corporate sustainability strategy, ASAP. SR Inc Member-clients view renewable energy as a major opportunity that should be integrated into their greater corporate sustainability strategies as soon as possible given the time-sensitivity of very low interest rates, declining federal tax credits, and fierce supplier competition. They recognize that by waiting, they risk missing-out on a buyer-favorable market. This integrated renewable energy strategy should encompass your company’s entire operational portfolio, including leased space. SBER Member-clients experience in the procurement of renewable energy have found that certain management best practices have enabled them to move to leadership in renewables including:

  1. Identify opportunity sites and know your renewable energy options. By identifying sites across  your US portfolio where (a) changing regulations are favorable, (b) you are paying over $0.07/kWh, and (c) your site is amenable to solar, on-site projects can produce year-one savings in certain US markets. Alternatively, consider community solar or utility-offered green products if they are available. For sites that are leased or otherwise incompatible with on-site options, off-site procurement from the same utility district as your site electricity demand can provide both high-quality bundled RECs and the associated price-competitive energy. Procurement from off-site renewable energy that is not grid-proximate can still provide high-quality RECs along with a robust financial hedge against electricity price risk via VPPAs.
  2. Keep an eye on energy storage. Recent advances in energy storage technology, rapidly decreasing costs, and shifting grid tariff structures make it impossible to neglect the consideration of storage integration into either on-site or off-site projects, as well as your overall renewable energy strategy.
  3. Examine opportunities for aggregated procurement of off-site renewable energy. While companies strategically pursue a full array of energy solutions – including energy efficiency, on-site and off-site renewable energy, as well as unbundled RECs – off-site renewable energy is evolving to provide attractive business cases on multiple fronts. Member-clients are increasingly interested in aggregated procurement of renewable energy to improve economic terms, reduce transaction costs and further de-risk procurement.
  4. Fortify your renewable energy procurement process. As the market has matured – producing dozens of deeply experienced, well-financed, well-referenced corporate suppliers and scores of interacting technological and transactional options – responsible corporate procurement of renewable energy solutions requires a well-managed, comprehensive, and auditable procurement process.
  5. Team up with an experienced strategic advisor to help navigate the complex landscape of renewable energy procurement actors and offerings. Experienced corporate off-takers develop blended internal/external teams with deep experience in both renewable and conventional energy. Outside advisors may be compensated by the corporate off-taker and/or any winning suppliers via a transparent, optimally RFP-disclosed, market-based fee.
  6. Engage your CFO. Develop a team and plan backed by current market-tested data to engage your CFO six to nine months before procurement to demonstrate why your renewable energy strategy and implementation provide a superior, risk-adjusted opportunity for your company.

A Force to be Reckoned With

Salesforce is an SR Inc Charter Member who has been leading the way in their commitment and implementation of sustainability and renewable energy ambitions. Their FY17 Stakeholder Impact Report outlines their aggressive sustainability targets in the face of the company’s own explosive growth. Targeting both Scope 1 and 2 emissions, Salesforce has set its sights on moving from 23% emissions mitigated via renewable energy in FY16 and 17 to 100% in FY18. They will follow a three-step, iterative process as a key methodology (2017):

  1. Avoid emissions by siting facilities on clean electricity grids.
  2. Reduce emissions through resource efficiency.
  3. Mitigate remaining emissions through renewable energy or high-quality carbon credits.

This process illustrates just how embedded Salesforce’s sustainability strategy is in its operations and its priority of upstream mitigation efforts. Furthermore, its 100% renewable energy commitment, joining the RE100 back in 2015, means that they are not relying on carbon credits to do the heavy lifting. In their endeavor to procure enough renewable energy to account for 100% of their global operations – up from 265,000MWh in FY16 to 371,000MWh in FY17 – VPPA’s have been an essential mechanism, with Salesforce signing two in 2015.

Max Sher, Sustainability Program Manager at Salesforce

Max Scher, Sustainability Program Manager at Salesforce

At the helm is 27 year-old Sustainability Program Manager, Max Scher, earning GreenBiz’s 30 Under 30 designation in 2017. Having developed Salesforces’ renewable energy and carbon roadmap, Max leads the company in its journey to Net-Zero Greenhouse Gas Emissions, as he works with and for Senior Director of Sustainability, Patrick Flynn.

At the highest level, companies should be thinking about how their product, service, business model, and operations can become sustainable, not only environmentally and socially, but financially as well. Today, all companies should take a portfolio-wide approach, examining their entire configuration of current and future energy needs and how those can be addressed by the full range of solutions in order to design a holistic strategy. As a valuable component of these strategies, Member-clients and SR Inc are developing robust and scalable approaches for aggregated off-site renewable energy procurement. SR Inc is leading a competitive RFI / RFP process to offer this approach, along with its variety of inherent benefits, to a wide-range of Member-clients.

Select Relevant SBER Executive Guidance & Tools:

 

ErikLandryErik Landry joins Sustainability Roundtable Inc as an MIT Sloan Sustainability Fellow. Pursuing a Master’s degree at MIT’s Technology and Policy Program of the Institute for Data, Systems, and Society, as well as a Sustainability Certificate from MIT’s Sloan School of Management, Erik approaches sustainability from a systems perspective. His current research within MIT Sloan’s System Dynamics Research Group pertains to capability building and resource allocation dynamics in complex social and technical systems. Before beginning his graduate studies, he spent two years at the U.S. Department of Energy’s Solar Energy Technologies Office – where he analyzed alternative market pathways for concentrating solar power as well as grid integration solutions for highly distributed photovoltaics – and one year at Argonne National Laboratory – where he studied the material chemistry of organic photovoltaics. Erik holds a B.S. in Chemistry from the University of Chicago

David Osborn is an accomplished corporate sustainability advisor serving dozens of SR Inc’s Fortune 500 and mid-sized client companies as they drive significant operational efficiencies and better align with talent, customers, investors, and regulators through corporate sustainability strategy. From his career in business consulting and executive leadership, David brings to SR Inc over 25 years of experience in building professional services and technology-driven businesses serving a broad range of client industries. David graduated from Dartmouth College where his studies concentrated in Economics and Geology. He received numerous academic honors highlighted by a citation in mathematics from the then college President John G. Kemeny. After IT systems experiences at Arthur Anderson (now Accenture) and Wang Labs, David graduated from Northwestern’s Kellogg Graduate School of Management with honors, a member of the Beta Gamma Sigma Honor Society and in the top 3% of his class.

After receiving his MBA, David cut his teeth at Bain & Company in their Boston office and then progressed up to Managing Partner at Booz, Allen & Hamilton (BAH) where he was ultimately elected by his Partners to head their Australasian business. After helping to grow that business from a very early stage to a staff of more than 100, David returned to the US to head BAH’s Retail Financial Services practice in North America. After a few years back in the US market, David transitioned out of his highly successful consulting career and served as Managing Partner / EVP at two innovative business service companies: the first a 150 employee, VC-backed innovative technology services provider in Boston, and the second a high-end, 200+ employee proprietary marketing services provider located in Princeton and New York. In both companies, David led over 200% growth within 2-3 years while substantially building the companies’ delivery teams and capabilities.

 

 

 

Making the Case for a Portfolio-wide Sustainably Healthy Workplace Program

July 5th, 2017

A growing body of evidence points to the clear link between sustainable, healthy workplaces and more satisfied, more productive employees. Therefore, it’s no coincidence that many successful and fast growing companies (including Sustainability Roundtable Inc. (SR Inc) Member-Clients Akamai, Salesforce and others) are developing comprehensive Sustainably Healthy Workplace (SHW) strategies for implementation portfolio-wide.

Bay Area Member-Clients recently joined SR Inc at Salesforce’s LEED Platinum HQ in downtown San Francisco to further explore the research behind this link and to discuss the benefits and barriers to pursuing a more Sustainably Healthy Workplace strategy portfolio-wide.

As SR Inc works towards the development of a decision-support and business case tool for portfolio-wide SHW strategies – in line with SBER’s 2017 Research Charter – the 2nd quarter of 2017 served as a “Discovery Phase” to determine the major perceived benefits and barriers to implementing such strategies. Some of the key themes that arose as barriers during interviews with dozens of Member-Clients were unsurprising such as:

  1. the potentially high dollar and staff time costs of developing and implementing such a strategy;

    ibicalculator

    Integrated Benefits Institute estimates the significant workforce health costs for a company with 2,000 employees. Key: General Health (GH); Short-term Disability (STD); Family & Medical Leave Act (FMLA); Long-term Disability (LTD); Workers’ Compensation (WC); Source: Integrated Benefits Institute. “The Total Costs of Workforce Health: Prepared for Sample Report.”

  2. the complexities associated with measuring the direct impact of work environments on employee performance; and
  3. the lack of available implementation guidance.

However, these interviews also revealed some less obvious barriers, such as:

  1. the challenge of quantifying the costs of SHW programs on a per full-time employee (FTE) basis (in addition to per square foot (SF) basis);
  2. perceiving existing HR Health & Wellness programs as a substitute for healthy workplace programs, (noting that only 15% of employees participate in their current health management program); and
  3. assessing and implementing healthy workplace programs via a single-asset versus portfolio-wide approach.

To overcome such barriers, SR Inc’s Peter Crawley, Director of Research & Consulting, shared some of the core best practices Member-Clients are employing to successfully develop and implement portfolio-wide SHW strategies and – in some cases – related building certifications:

  1. Recognize the ability of portfolio-wide SHW strategies to transition the Corporate Real Estate (CRE)
    cogfxstudy

    The CogFX study identifies significant correlations between sustainable, high-performing buildings and healthier, more satisfied occupants. Source: MacNaughton, P. Satish, U. Guillermo Cedeno Laurent, J. Flanigan, S. Vallarino, J. Coull, B. Spengler, J.D. Allen, J.G. “The impact of working in a green certified building on cognitive function and health.” Building Environment. March 2017 v.114:178-186.

    function from cost management to value creation. Directors of CRE that take an employee-centered, portfolio-wide approach to portfolio management are empowered to deliver an integrated strategy that engages employees; integrates sustainability, wellness, and renewable energy initiatives; is highly visible; and is enduring to enable year over year growth and excellence.

  2. Allocate the costs & benefits of health & wellness workplace programs/certifications across both CRE and HR departments. A portfolio-wide SHW strategy engages multiple departments beyond CRE – most notably HR – fostering joint decision-making collaboration to align with a greater number of internal stakeholders, attract greater attention/support from the C-Suite, and allow for both costs and benefits of initiatives to be distributed across both CRE and HR budgets.
  3. Quantify correlations between Healthy Workplaces & Employee Performance. A range of credible studies exist – from Harvard School of Public Health’s CogFX Study to Integrated Benefits Institute’s suite of tools – that help companies better understand the impact of work environments on employee health and productivity and build the business case for implementing SHW strategies portfolio-wide.
  4. Recognize the Risk Management (Regulatory, Brand, Workforce & Market) Benefits of portfolio-wide SHW programs. Portfolio-wide SHW programs can help enterprises align with a range of both internal and external stakeholders, helping ensure they are in compliance with environmental and health regulations; improving brand reputation among customers and investors; reducing risk of workforce illness, absenteeism, and escalating health costs; and future-proofing their building portfolio for anticipated market demand for healthier buildings.
  5. Use workforce costs/FTE metrics in addition to building costs/SF when analyzing the business case for SHW programs. The traditional approach to a cost-benefit analysis considers hard costs of building, owning, and
    reframecostbenefit

    A portfolio-wide SHW program invites a reframed cost/benefit analysis that integrates employee impacts – such as absenteeism, turnover, health insurance costs, and productivity – for a more comprehensive analysis of the costs and benefits of sustainably, healthy workplaces.

    operating a healthy workplace as well as the (sometimes significant) additional costs of certifying that workspace/building. The ROI is typically calculated based on resulting reductions in energy, space, and water costs. A portfolio-wide SHW program invites a reframed cost/benefit analysis that integrates employee impacts into the mix. Specifically, health-related workforce costs such as absenteeism, turnover, health insurance costs, and employee disengagement are costs with significant impact on the bottom line. Inversely, reduced absenteeism, lower turnover rates, lower health insurance costs, and greater employee engagement/productivity are benefits that can greatly contribute to revenue. For example, a portfolio-wide SHW Program yielding a 5% annual reduction in health-related costs  at a company of 10,000 employees can produce nearly $20 Million in cumulative savings over 5 years versus a “Business as Usual” scenario.

As Q3 of 2017 begins and we move closer to SR Inc’s 6th Summit for Sustainable Operations in Denver on December 8th, SR Inc looks forward to sharing with Member-Clients a decision-support tool to help Real Estate executives develop a portfolio-wide SHW strategy for their enterprise, and to help build the business case for its implementation (including wellness certifications where appropriate). SBER Premier Thought Leader Delos will also bring its multiple years of workplace health expertise to this effort and help ground the business case tool in credible, evidence-based research. In the meantime, SR Inc is available to answer any general or specific questions your team has regarding health and wellness in the workplace.

Select Relevant SBER Executive Guidance & Tools:

kwall_linkedin_pic-1 (2)As a Senior Manager of Research & Consulting at SR Inc, Kelsey Wallace supports research, development and implementation of enterprise sustainability strategies for companies that recognize the business imperative of more sustainable operations in the face of climate change and an increasingly resource-constrained world. Prior to joining Sustainability Roundtable, Inc., Kelsey worked for an environmental/engineering consulting firm where she supported clients including  the U.S. Environmental Protection Agency and the U.S. Green Buildings Council to promote sustainable buildings, clean energy, and safe drinking water. Kelsey also devoted a year to national service with the AmeriCorps National Civilian Community Corps, where she worked on team-based conservation and community development projects throughout the Southwest United States. Kelsey has her B.A. in Environmental Studies from Connecticut College.

1_Crawley-Peter-117x127Peter Crawley, Director of Research & Consulting at SR Inc , has led at the intersection of strategic consulting, real estate and sustainability for more than 15 years, serving as the principal advisor to top real estate owners and scores of  operating companies.  Peter has helped the executive teams at these enterprises develop and implement highly profitable Sustainability Strategies.  Prior to joining SR Inc, Peter served as the Director of Sustainability Services at the environmental engineering firm EBI Consulting. Peter is LEED accredited and has deep experience working on energy efficiency issues, product life cycle improvements, and greenhouse gas measurement, reduction, and reporting. He has worked on numerous LEED certification and high-performance building projects, and designed and implemented company-wide behavioral change programs to advance sustainability goals and enhance employee engagement. Peter received his BA from Amherst College, his MS in Real Estate from Columbia University and his MA in Sustainability & Environmental Management from Harvard University.

Not all RECs are Created Equal

June 7th, 2017

Think all Renewable Energy Certificates (RECs) are equally good for the planet?

Think again.

RE100 reported that in 2015 unbundled Renewable Energy Certificates (RECs) were “by far the most popular approach [for corporations to source renewable electricity], accounting for 85% of the total renewable electricity being obtained in the US.”  There can be no doubt that unbundled RECs have played an irreplaceable role in the promotion of the renewable energy market throughout the United States.  Nevertheless, as a number of corporations begin to achieve their 100% renewable energy goals, some are looking to move beyond unbundled RECs.

Some familiar faces are among those companies leading the charge.  Microsoft has set its goal at directly sourcing 50% of the electricity used at its data centers from wind, solar, and hydro by next year, and 60% early in the next decade, and “then to keep improving from there”.  Google, Autodesk, and Steelcase are taking similar approaches.

Greenpeace seems to support this evolution. In its recent report, “Clicking Clean,” it tracks how different companies in the IT sector are leading (or lagging) their industry counterparts in their commitments towards renewable power and, perhaps even more importantly, how they differ in their implementation of those commitments.  Over-reliance on unbundled RECs takes its place among a set of “shortcuts” that some companies take to achieve their sustainability claims without actually promoting new renewable power or reducing Green House Gas (GHG) emissions.

REC Basics

When you switch on your lightbulb, there is no way of knowing whether the consumed electricity comes from a squeaky clean photovoltaic solar panel or a smog belching coal plant.  Once electricity is generated, it is put onto the electric grid, which can be thought of like a big pool of electricity, whereupon it flows subject to Kirchhoff’s Voltage Laws until it reaches some downstream point of consumption.  Given the inability to physically trace energy from clean sources once it enters the grid, RECs were created as a contractual mechanism to keep track of renewable energy production, not consumption, so that companies can claim rights to clean energy and promote the development of new renewable energy projects that would displace dirtier conventional energy production.  A REC is created at the location and time at which one MWh is produced by a certified renewable energy source.

The value of a REC is primarily determined by three factors:

  • Supply and Demand: As we all fondly remember from Economics 101, a lower supply drives a higher demand, ceteris paribus. (We can agree that RECs are “normal” goods.)  Where supply of RECs saturates the market– as has been seen in Texas due to an abundance of wind generation – demand for RECs is depressed.
  • Regulation: Demand is generally higher in compliance markets than in voluntary markets. When utilities, due to renewable portfolio standards (RPS) or renewable portfolio mandates (RPMs), are on the hook for retiring (claiming) RECs, they tend to be more prized.
  • Technology: Do you think solar or wind is cooler? Companies have their preferences too.  The desire to have RECs produced by a specific technology for branding campaigns or local support can factor into a REC’s value.

For more detailed information on RECs, please see SR Inc Member Advisory on International Renewable Energy Markets.

To Bundle or not to Bundle?

Unbundled RECs are those that have been disassociated from the electricity production originally represented and are sold separately from energy.  Consequently, unbundled RECs are very flexible and have been an attractive way for companies to pursue their sustainability and renewable energy goals regardless of the location of and regulatory environment around their energy load.  Bundled RECs, on the other hand, are ‘bundled’ with the purchase of energy and, consequently, are constrained by certain grid considerations.  While, as mentioned before, the particular electrons generated from the renewable source are immediately lost in the electric grid, bundling works as long as you are purchasing energy from the same regional grid.

Why does it matter?  Both RECs were created with the generation of clean energy.  Isn’t that enough?

It depends on what your goal is.  If your goal is to claim rights to renewable energy at a potentially very cheap cost, unbundled RECs will do that for you.  If your goal is to claim those rights in a way that promotes the renewable energy industry, you might need something more.

Imagine that in order to satisfy your RPM (or perhaps your shareholders), you could either A) purchase a bunch of super cheap unbundled RECs from an oversupplied market in Texas or B) purchase bundled RECs from a new renewable development in your area where there is less existing renewable generation.  Which does more for the promotion of clean energy development?  There is a right answer to this question: B.

In fact, if a company justifies an increase in energy consumption in a grid supplied by conventional generation with the purchase of national RECs, the result would be even greater GHG emissions.  With this realization, an increasing number of companies, especially leaders in the Information Technology sector such as Google and Microsoft, are opting to purchase bundled RECs instead of unbundled RECs.  The value that “grid-proximity” has on the promotion of renewable energy in their respective locations, as well as the brand and relational benefits towards the engaged stakeholders, is a value-add beyond the well-recognized and trusted RECs in the renewable energy market.  For more information on how companies can push the envelope at the nexus of renewable energy and sustainability, please see SR Inc Member Advisory on Renewable Energy Impacts on Sustainability Reporting.

There’s a PPA for That

The Corporate Renewable Energy Buyers’ Principles were created by the World Resources Institute (WRI) to clarify driving principles that help corporations in their efforts to procure renewable energy in an effective manner.  One of the six principles is the call for “access to projects that are new or help drive new projects in order to reduce energy emissions beyond business as usual”.  Enabling the construction of new renewable energy projects, as well as the resulting saving of GHG emissions, beyond what would have occurred in the absence of action is called “additionality”.  The question of what enablement entails, as well as what actually would have happened, is a little bit gray and can be argued to varying degrees.  Fossil-fuel displacement, clean energy traceability, project financing, price point, tax incentives, emissions avoidance, and even project timing, could all potentially fall under the umbrella of additionality.  Purchase Power Agreements (PPAs) have boomed in recent years, and are arguably stronger in terms of additionality than the purchase of unbundled RECs.  The long-term contractual commitment to buy energy from a clean power source is very often the driving factor behind the development of a new renewable energy project in the first place.  The only problem is that PPA’s don’t necessarily come with the certified recognition of clean power production.  Only RECs serve that purpose.  Thus, the purchase of bundled RECs along with the corresponding clean energy through PPAs is good for the clean energy recognition, good for the additional development of renewable energy projects, and good for the planet.  But it doesn’t end there.  Many corporations are not located near a suitable location that provides the favorable economic, regulatory, and renewably resourced environment to make a direct PPA possible.  Virtual PPAs (VPPAs) have enabled corporations the ability to provide additionality to the regional grid, get bundled RECs, and do so at an off-site location that fits their financial requirements.   The only thing that is needed now is a mechanism that can make accessible the benefits of a VPPA to the great majority of corporations that do not need an entire utility-scale renewable energy project all to themselves.  Finally, the aggregated procurement of renewable energy with bundled RECs using a VPPA and contract-for-differences (CFD) transaction structure emerges as an attractive option for a large majority of corporations to gain all of the benefits while minimizing their financial risk.  For more on this structure, please refer to SR Inc Member Advisory on Advanced Renewable Off-site Energy.

Stepping Back

While the dropping costs of renewable energy technology and the grand entrance of PPAs and bundled RECs onto the scene surely make the renewable energy market an exciting one to enter, companies should step back and explore the space of options.  The primary focus area for improvement should include energy efficiency and demand reduction.  The cheapest and cleanest energy is the energy not used.  On-site renewables provide, in no uncertain terms, the next best level of additionality.  Various PPA structures with bundled RECs come in next, with unbundled RECs providing an essential stepping-stone for companies to engage in renewable energy markets.  Ultimately, companies will need to construct portfolios of the available alternatives that best fit their sustainability goals, energy needs, risk profiles, and financial situations.

References.

ErikLandry

Erik Landry joins Sustainability Roundtable Inc as an MIT Sloan Sustainability Fellow. Pursuing a Master’s degree at MIT’s Technology and Policy Program of the Institute for Data, Systems, and Society, as well as a Sustainability Certificate from MIT’s Sloan School of Management, Erik approaches sustainability from a systems perspective. His current research within MIT Sloan’s System Dynamics Research Group pertains to capability building and resource allocation dynamics in complex social and technical systems. Before beginning his graduate studies, he spent two years at the U.S. Department of Energy’s Solar Energy Technologies Office – where he analyzed alternative market pathways for concentrating solar power as well as grid integration solutions for highly distributed photovoltaics – and one year at Argonne National Laboratory – where he studied the material chemistry of organic photovoltaics. Erik holds a B.S. in Chemistry from the University of Chicago.

Top Ten U.S. Cities Ranked For Climate & Renewable Energy Policies

May 31st, 2017

Sustainable Business & Enterprise Roundtable (SBER) Member-clients are formulating and pursuing aggressive renewable energy goals and almost all have substantial presence in multiple large U.S. cities. Consequently, Member-clients have requested a quick survey of what the most advanced large U.S. cities are doing to meet their climate change goals, especially as they consider potential partnerships with the cities they operate in to advance a shared commitment to accelerating the necessary move to a low carbon economy.

Since this concerns public information, Sustainability Roundtable Inc. wanted to share this ranking of large U.S. cities leading on the low carbon economy on our blog.  This post, therefore, explores ten large U.S. cities leading through their relatively bold commitments to reduce their greenhouse gas (GHG) emissions and advance renewable energy. This movement is, of course, much broader than the listed cities.

For example, twenty-nine U.S. cities and counting have committed to transition their power source to 100% renewable energy. An interactive map created by the Sierra Club reveals that seven of those cities have already hit their renewable energy targets– Aspen, CO, Burlington, VT, Columbia, MD, Greensburg, KS, Kodiak Island, AK, Rockport, MO and Santa Monica, CA. The map also features 22 other cities committed to 100% renewables, including San Diego and San Francisco, CA, along with 39 cities currently working towards 100% renewables, including Chicago, IL, Denver, CO, Oakland, CA, and Philadelphia, PA.

For the convenience of Member-clients and others, we provide the following informal ranking of cities’ efforts in specifically pursuing renewable energy to reduce their GHG emissions, highlighting selected progress.  Five of those listed are part of the Carbon Neutral Cities Alliance (Boston, DC, New York City, Portland and San Francisco).

#10. Philadelphia, PA: Financing solar in Philadelphia has been challenging over the years, but the City has made significant strides in making it easier, faster and cheaper to install – and has been recognized as a SolSmart Gold designee – which helps the city reach its 80% GHG reduction goal by 2050.

Philadelphia’s Office of Sustainability is responsible for driving Greenworks Philadelphia, the City’s comprehensive sustainability plan which was first launched in 2009. Philadelphia’s 2016 Greenworks Plan outlines a goal to reduce GHG emissions 80% by 2050, below a 2006 baseline and the City is currently establishing new local government energy and climate targets. As part of the eight visions of Greenworks, the third vision focuses on clean energy that all Philadelphians can afford.

  • 2016 Population: 1,526,006.
  • Philadelphia had 10 MW of solar PV installed by the end of 2016.
  • The City’s solar and wind installation at Lincoln Financial Field generates three megawatts of energy responsible for 1/3 of the City’s solar capacity.
  • As a SolSmart Gold designee, Philadelphia is receiving national recognition for its work to reduce solar permitting costs, create a Solar Guidebook, and update their expedited permitting process.

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Beginning in 2009, the City of Philadelphia purchased 20% of its total annual energy through national wind RECs. In 2014 the City shifted its purchasing strategy from national to state RECs, focusing City dollars on supporting local projects. While local RECs are more expensive, the Energy Office is committed to using Philadelphia’s buying power on the REC market to spur the growth of renewable energy close to home. The increase in renewable generation in Philadelphia has come not through solar alone, but also through projects like the PWD’s biogas cogeneration plant at its Northeast Water Pollution Control Plant.

p5According to Greenworks Philadelphia, the state’s alternative energy portfolio standard and initial investment in solar through the PA Sunshine Program helped create a market for solar renewable energy credits (SRECs). The end of the Sunshine Program and the lack of sufficient expansion of the portfolio standard (and the ability of utilities to meet requirements by purchasing solar energy outside of Pennsylvania) have made financing solar projects in Philadelphia challenging in the past years.

 

#9. Chicago, IL: The City of Chicago has the same GHG reduction goal as Philadelphia but recently announced to power municipal operations with 100% renewable energy by 2025 which is currently being met through a combination of Renewable Energy Credits (RECs), utility-supplied renewable energy, and on-site generation.

The City launched the Chicago Climate Action Plan (CCAP) in 2008 to create a roadmap of five strategies – including clean and renewable energy sources as number two– to reduce GHG emissions and adapt to climate change. The Plan outlines how Chicago will achieve its mid-term goal of 25% reduction by 2020 and its ultimate goal of 80% reduction below 1990 GHG levels by the year 2050. Chicago also has goals to improve citywide energy efficiency by 5%; improve overall energy efficiency in municipal buildings by 10%; and create an additional 20 MW of renewable energy consistent with the Illinois Renewable Portfolio Standard, including installing 10 MW of renewable energy on City properties.

  • 2016 Population: 2,695,598.
  • Chicago had 13 MW of solar PV installed by the end of 2016.
  • The City provides annual reports on progress towards its goals in the Sustainable Chicago Action Agenda.
  • Chicago has reduced its carbon emissions by 7% from 2010 to 2015.
  • In 2010, a solar field consisting of 5,000 solar panels, covering over 2.3 acres, was completed on top of a 30-million-gallon underground reservoir. This roof generates over 1 MW of electricity annually.
  • Mayor Rahm Emanuel and City leadership announced on April 9, 2017, more than 900 city-owned buildings will shift to 100% renewable energy by 2025.
    • City Buildings, Chicago Public Schools, Chicago Housing Authority, Chicago Park District, and City Colleges of Chicago use almost 1.8 billion kWh of energy (8% of the city’s total use).
    • With initial purchases to begin in 2018 and 2019, the commitment will be met through a combination of acquiring RECS, utility-supplied renewable energy via Illinois’ Renewable Portfolio Standard, and on-site generation.
  • Chicago Solar Express makes installing solar easier by cutting fees and streamlining and standardizing permitting and zoning processes
  • A list of renewable energy consultants and working groups that the city has worked with can be found here.

#8. Boston, MA: Pulling ahead of Chicago, the City of Boston exceeded its 25% GHG emissions reduction goal by 2020 seven years early, achieving it through renewable energy programs and installations, paired with energy building ordinances which helped the City achieve a #1 ranking in energy efficiency.

Boston’s initial climate goals were formally adopted in 2007 with Executive Order 3-3890. In 2014, Mayor Walsh released the Greenovate Boston Climate Action Plan Update to reveal the City’s progress towards GHG emissions reduction and outline its strategies. The City announced it had reduced municipal GHG emissions by approximately 27%, meeting its 2020 goal of 25% reduction seven years early and on track to meet its long-term goal of 50% reduction by 2050. The Climate Action Plan outlines 2020 targets that include 15% energy use from co-generation and 10 MW of additional commercial solar. Boston plans to expand on-site renewable energy, district energy, and combined heat and power, along with promoting renewable energy purchasing, including buildings that have linked off-site renewable projects.

  • 2016 Population: 667,294.
  • The City of Boston had 20 MW of total solar PV installed by the end of 2016.
  • The report, Shining Cities: How Smart Local Policies Are Expanding Solar Power in America released April 4, 2017, ranks Boston 21st among major U.S. cities for solar, ahead of Philadelphia, Seattle and Miami for the total amount of installed solar, but behind Newark, NJ, Portland, OR, and DC.
  • According to the third edition of the City Energy Efficiency Scorecard, recently delivered by the American Council for an Energy-Efficient Economy (ACEEE), Boston remains the number one U.S. city for energy efficiency. Boston’s solar programs and building energy reporting ordinances have helped the City achieve this national recognition.
  • Since Boston is one of the windiest cities in the nation, the Boston Redevelopment Authority created new zoning laws for wind turbines.
    • The installation of a 1.5 MW turbine in Charlestown and two 600 KW turbines on Deer Island, generate more than 5 million kWh, saving roughly $600,000 each year.
    • In 2008, the Massachusetts Port Authority installed 20, 12-foot tall wind turbines on the roof of Logan Airport’s offices which utilize stable winds along the waterfront.
  • Boston’s Municipal Greenhouse Gas Inventory Summary reveals the City started buying RECs primarily from Midwestern wind farms in 2005.
  • Solar is also a critical source to meet Boston’s climate action goals. Boston has created many programs to expand solar energy, such as the Renew Boston solar program which helps Boston residents, businesses and institutions save money and energy.
  • The City’s interactive BERDO Mapping Tool calculates metrics for renewable energy for all buildings.

#7. Oakland, CA: Oakland may be the “other” city in the Bay Area but it is a national and global leader in greater sustainability.  Oakland is on track to reduce GHG emissions 36% by 2020 through residential and government solar programs including community choice aggregation as the City plans to add 62 million kWh of new renewable energy used to meet local needs, annually.

The Sustainable Oakland program is an evolution of the Sustainable Community Development Initiative, established by Oakland’s City Council in 1997, and supports Oakland’s progress in becoming a more sustainable city. The Oakland Energy and Climate Action Plan (ECAP) was adopted by the City Council on December 4, 2012 and outlines a ten-year plan including more than 150 actions that will enable Oakland to achieve a 36% reduction in GHG emissions by 2020 and 83% by 2050, below 2005 levels. The plan consists of a 32% decrease in electricity consumption through renewable generation, conservation and energy efficiency. It also includes a goal to add an annual 62 million kWh of new renewable energy used to meet local needs. Specifically, Action BE‐45 outlined in Oakland’s ECAP states: explore opportunities to install alternative energy technologies (e.g. via solar power purchase agreements) or purchase grid-based renewable energy for City facilities.

  • 2016 population: 390,724.
  • Sustainable Oakland’s website reveals that throughout the city, there were a total of 1,819 residential and non-residential solar systems at the end of 2013, with a total generation capacity of 15 MW.
  • The City installed a 372 kW system atop the Oakland Ice Center. The system generates 31% of the electricity used at the facility.
  • Additionally, a 760 kW system on the Municipal Service Center in the Coliseum Business Park generates 82% of the four buildings’ energy load, covering 85,000 square feet.
  • The City has also installed solar thermal systems on Fire Station 18 and the East Oakland Sports Center.
  • Oakland is a member of the Local Government Sustainable Energy Coalition’s Energy Policy Committee which focuses on energy efficiency, clean energy and community choice aggregation (CCA).
  • Sustainable Oakland’s 15/16 Progress Report presents findings from its 2016 emissions inventory and discovered Oaklanders reduced their GHG emissions 14% since 2005 from all sectors of the community – residential, commercial, and local government.

#6. District of Columbia (DC): DC has been reducing its emissions through one of the largest 20-year off-site wind PPAs of its kind ever entered into by an American city which serves 35% of the government’s total electricity needs.

The District’s first Climate Action Plan, Climate of Opportunity, provides an outline for District agencies to cut emissions. DC is committed to reducing GHG emissions 50% below 2006 levels by 2032 and 80% by 2050. The Department of Energy & Environment (DOEE) has been working on updating the Climate Action Plan to align it with the goals and initiatives of Sustainable DC, moveDC and Clean Energy DC. Sustainable DC’s 2032 targets include reducing energy use by 50% relative to 2012 and increasing renewable energy to represent 50% of all energy used in the District.

  • 2016 Population: 561,702.
  • DC had a total of 25 MW of solar PV installed by the end of 2016.
  • The Sustainable DC 2017 Year Progress Report highlights key projects and initiatives, and summarizes basic progress on the Plan.
  • In December, 2015 Mayor Muriel Bowser entered into one of the largest municipal on-site solar projects in the U.S. to boost the city’s total solar generation capacity by roughly 70% through the deployment of 11.4 MW of solar PV systems on the roofs and parking lots of 34 District-owned facilities. This was through the DC Department of General Services’ (DGS) Power Purchase Agreement (PPA) with DC-based, Nextility Inc.
  • DGS expects additional peak-season cost savings for electricity purchases from off-site energy sources in the summer months, when both demand and solar output is often greatest.
  • On top of the immense solar generation, DGS signed the largest 20-year off-site wind PPA (in PA) of its kind ever entered into by an American city in July 2015, which serves 35% of the government’s total electricity needs from a wind farm.
  • The District’s commitments to sustainable energy were recognized by the U.S. Environmental Protection Agency (EPA) with a Green Power Leadership Award in 2015.

DC6DC extended its Renewable Portfolio Standard (RPS) target from 20% by 2020 to 50% by 2032 which includes a separate solar-specific target of 5% by 2032. In 2015, electricity sales in the District totaled 11.3 billion kWh with an RPS requirement of 12%. Since DC has limited renewable capacity, almost all of the RPS compliance targets were met by generation outside of the District through the purchase of RECs.

DC719 states outside of DC have approved capacity that can count toward DC’s RPS, as they are all part of or adjacent to the PJM region. Because some of these states may have their own renewable portfolio standards, the eligible generating capacity may not necessarily be fully available to meet the District’s RPS requirement. About half of the approved capacity is in Illinois, Indiana, and Pennsylvania. The 22 MW of solar capacity in DC represented only 0.3% of total eligible capacity as of July 2016.

#5. Denver, CO: Currently exploring pathways to get to 100% renewable energy, Denver had 45 MW of solar installed by 2016 and has outlined strategies to double renewable energy produced in government operations by 2020 while partnering with Xcel Energy on solar and wind projects.

Denver’s long-term climate reduction goal highlighted in the City’s 2015 Climate Action Plan is to reduce GHG emissions 80% by 2050 from a 2005 baseline. Denver’s Office of Sustainability has formally adopted separate community-wide goals and government operations goals as part of Denver’s 2020 Sustainability Goals. Community-wide goals include reducing Denver’s CO2 emissions to below 1990 levels and holding total energy usage below 2012 levels while cutting fossil fuels by 50% by 2020. Denver’s government operations goals include reducing city GHG emissions to <345,000 mtCO2e and a 20% energy consumption reduction as city operations double renewable energy produced by 2020. Denver is currently exploring pathways to get to 100% renewable energy.

  • 2016 Population: 682,545.
  • Denver had 45 MW of installed solar by the end of 2016.
  • Denver International Airport has four solar arrays installed generating 10 MW of solar developed by Denver-based Oak Lead Energy Partners under a 20-year PPA.
  • Oak Leaf Energy has completed 68 additional solar projects, including the projects for the Denver Housing Authority and the Denver Public School System.
  • The Denver Housing Authority also agreed to a PPA with Enfinity America Corporation enabling the installation of 2.5 MW of solar on more than 350 Authority affordable housing properties.
  • A strategy in place to meet Denver’s GHG goals is to Partner with Xcel Energy to rapidly attain a lower emissions factor for electricity through system efficiencies, additional renewable energy projects and no-carbon sources.
  • Denver has many programs in place to help its residents and businesses become more efficient in lighting upgrades and solar, such as the Denver Energy Challenge.
  • The Office of Sustainability last updated their government operations progress report in February 2017. The report reveals government operations decreased GHG emissions year-over-year. To meet their 2020 GHG goal, Denver will require significant momentum and implementation of major strategies.

#4. Portland, OR: Portland ranks fourth on our list since the city achieved its goal of purchasing or generating 100% renewable energy for City operations in 2016, which was successfully met through solar, micro-hydro turbines, a cogeneration system and RECs.

Portland was the first city in the U.S. to create a local action plan for cutting carbon in 1993. Portland’s 2015 Climate Change Action Plan concludes the City and County established a goal of reducing local carbon emissions 80% from 1990 levels by 2050, with an interim goal of 40% by 2030. In 2015, Portland City Council adopted the Sustainable City Government 2030 Environmental Performance Objectives, directing City operations to purchase or generate clean power for 100% of electricity needs which was achieved a year later.

  • 2015 population: 632,309.
  • Portland had 27 MW of solar PV installed by the end of 2016.
  • The 2015 Climate Action Plan calls for supplying 50% of all energy used in buildings from renewable resources, with 10% produced within Multnomah County from on-site renewable energy sources or district renewable energy sources such as solar, biogas, in-pipe microhydro and biomass.
  • According to Portland’s 2017 Climate Action Progress Report, the City completed renewable energy purchases to meet its FY15/16 electricity demand with 100% renewable energy. The City generated 7% of its electricity from on-site renewable energy systems including solar, micro-hydro turbines and a co-generation system; local electric utilities provided 15% of their supply from renewable resources; and RECs were purchased to offset the remaining electric utility supply.
  • The City was awarded a competitive grant from Pacific Power’s Blue Sky renewable energy program for the design and installation of a solar array at the North Police Precinct (scheduled to be completed in 2017).
  • Portland has one of the highest participation rates in voluntary green power purchase programs in the country, with participants accounting for more than 7% of all electricity sales.
  • The City and County have participated in several relevant PUC dockets and legislative proceedings related to renewable energy policy. This includes PUC proceedings on community solar, solar incentive program design, voluntary renewable energy tariffs, resource value of solar and renewable portfolio standard (RPS) legislation (Clean Electricity and Coal Transition Act of 2016).
  • The 2017 Progress Report indicates that compared to 1990 levels, total carbon emissions from commercial buildings and the industrial sector have declined 15% and 37%.

#3. San Francisco, CA: San Francisco set an ambitious goal to meet 100% of its electricity demand with renewable power community-wide by 2030 and is on track to achieve that goal through its first-in-the-nation mandate of solar and living roofs on residential and commercial buildings.

The San Francisco Department of Environment released the 2013 San Francisco Climate Action Strategy Update, under Mayor Edwin Lee. San Francisco’s GHG emissions reduction goals are to reduce emissions by 25% below 1990 levels by 2017; 40% by 2025; and 80% by 2050.  The 2017 target came two years ahead of schedule, set in 2008, and puts the city on track toward its ultimate goal of an 80% reduction by 2050. San Francisco is committed to meeting 100% of its electricity demand with renewable power community-wide by 2030.

  • 2016 Population: 870,887.
  • San Francisco had 46 MW of solar PV installed by the end of 2016.
  • The San Francisco Public Utilities Commission is responsible for the installation, maintenance and operation of the City’s 19 municipal solar installations (City Hall, Thurgood Marshall High School, North Beach Library, etc.) as well as its future, small, in-line hydroelectric generating facility. In total, the 19 solar energy facilities generate up to 7.9 MW of energy.
  • In January 2017, San Francisco became the first U.S. city to mandate solar and living roofs on most new construction. Between 15-30% of roof space on most new construction projects must incorporate solar, living roofs, or a combination of both.
  • The City explores 100% renewable power purchasing options, including Community Choice Aggregation through its CleanPowerSF program, administered by the San Francisco Public Utilities Commission.
  • San Francisco’s Solar+Storage for Resiliency project aims to expand the solar market by serving as a national model for integrating solar and energy storage into the City’s Emergency Response Plans.
  • San Francisco’s Renewable Energy Assessment shows a complete list of municipal renewable energy installed.
  • San Francisco’s Business Council on Climate Change BC3 is a network of large companies and government agencies dedicated to working together to reach San Francisco’s climate action goals.

#2. New York, NY: By far the largest city on our list, New York City, installed 74 MW of solar in 2016 and has created strong partnerships citywide to implement the City’s comprehensive plans for large-scale solar integration, grid independence and battery storage.

In 2015, Mayor Bill de Blasio announced a Request for Information (RFI) to identify new renewable energy generation capacity, with a goal of powering 100% of City government operations from renewable sources. Under One New York: The Plan for a Strong and Just City (OneNYC) and One City: Built to Last, Mayor de Blasio has committed to a 10-year roadmap of policies regarding dramatic reductions in GHG emissions, from City government operations and citywide. The City has pledged to reduce overall GHG emissions 80% by 2050 and emissions from City government operations 35% by 2025.

  • 2016 Population: 8,537,673.
  • Private and public solar installations in the City totaled almost 74 MW in 2016. Public solar capacity has increased to nearly 9 MW and private solar capacity has nearly tripled from 24 MW at the beginning of 2014 to nearly 65 MW, which helped to drop GHG emissions by 19% from 2005 levels.
  • Mayor de Blasio pledged to install 100 MW of new solar on public buildings and 250 MW of new solar on private buildings by 2025 through One City: Built to Last. Concurrently, the plan provided funding for the NYC Solar Partnership to continue to reduce market barriers for solar; attract more solar energy companies to the city and create more jobs; and increase the city’s installed solar capacity.
  • Partners helping to advance the Mayor’s goal of increasing solar are the NYC Solar Partnership which is led by Sustainable CUNY of the City University of New York, the New York City Mayor’s Office of Sustainability, and the New York City Economic Development Corporation.
  • New York City funded CUNY’s NYC Solar Partnership, which develops and implements comprehensive plans for large-scale solar integration, including increased resiliency for communities through targeted solar installations around grid independence and battery storage.
  • Solarize NYC, a citywide program designed to further increase access to solar through community group purchasing campaigns over the next nine years, expects to lower costs by 10 to 20% and increase solar capacity in communities that have historically had limited access to solar.

#1. San Diego, CA: The top ranking city on our list is the largest U.S. city to adopt a 100% renewable electricity goal community-wide by 2035.  San Diego is also the city who leads the country in solar PV installations with a commitment to reducing its GHG carbon footprint in half by 2035. 

In a statement from San Diego Mayo, Kevin L. Faulconer, San Diego is the largest U.S. city to adopt a 100% renewable electricity goal community-wide by 2035. San Diego’s Climate Action Plan has received national and international attention and support demonstrating the benefits of nonpartisan climate leadership. Unanimously approved by a bipartisan City Council, San Diego’s Climate Action Plan aims to reduce the City’s carbon footprint in half by 2035. Additionally, targets include a 15% reduction in GHG emissions by 2020 and 40% by 2030, below a 2010 baseline. The City announced that by 2015, climate pollution had been reduced by 17% below the baseline year of 2010 — surpassing the plan’s targeted 15% reduction goal by 2020. The Climate Action Plan is based on five bold strategies which detail energy & water efficient buildings; clean & renewable energy; bicycle, walking, transit & land use; zero waste; and climate resilience.

  • 2016 Population: 3,095,313.
  • San Diego leads the country in total solar PV installed with 303 MW as of the end of 2016.
  • According to San Diego’s 2016 Annual Climate Action Plan, by the end of 2015, the City operated on 35% renewable energy community-wide.
  • Sixteen municipal facilities fitted with PV will help the City reach its goal to pursue energy independence.
  • On a wider scale, the city is currently exploring community choice aggregation which the city, rather than the local utility company, chooses its electricity supply.
  • City taxpayers save about $1 million each year in energy costs with the City’s two large solar systems; one at Otay and the other at the Alvarado water treatment plant.
  • All newly constructed facilities and major renovation projects regardless of square footage are encouraged to incorporate self-generation using renewable technologies to reduce environmental impacts associated with fossil fuel energy use. Newly constructed City facilities shall generate a minimum of 10%, with a goal of 20% from renewable technologies including photovoltaic, wind and fuel cells.
  • San Diego Mayor, Kevin Faulconer is one of four co-chairs of the Mayors for 100% Clean Energy initiative launched by the Sierra Club to convince fellow U.S. mayors to adopt a goal of moving to 100% renewable energy.

References.

BDBrittany Doherty, Program Director joined SR Inc at the start of 2015. Brittany has two years of experience managing and writing Sustainability Reports for the Town of Dartmouth in accordance with the comprehensive, credible, and widely used standard, the Global Report Initiative (GRI). Brittany graduated with a B.S in Organizational Behavior Management & Sustainability from the University of Massachusetts-Dartmouth, while actively developing a variety of sustainability initiatives for the university. Brittany served as the President of Net Impact at her university for three years, was a member of the Fair Labor Association Student Committee for two years, and also launched a pilot-teaching-program to integrate Sustainability into the global network of Junior Achievement. While Brittany was attending graduate school, earning a certificate in Environmental Policy, she worked as an Analyst for the Town of Dartmouth, assisting in the advancement of the Town’s economic, environmental and social policies. Outside of her work at SR Inc, Brittany has volunteered on the Sustainable Belmont Committee and assisted in the Town’s GHG Inventory project, as part of the Climate Action Plan. She also served as a valuable member of the Belmont Solar Campaign (BSC).

 

Do You Support The Sustainable Tenants’ Leasing Principles?

April 21st, 2017

This Earth Day your firm has an opportunity to join world-leading firms in declaring support for six simple principles that advance greater sustainability in leased space.  All too often firms claim that because they lease most  – or all – of their space, they cannot lead in the move to more sustainable real estate.  And then landlords claim that the best tenants may not care about more sustainable and healthier space. 

More than half dozen world-leading firms have had enough of this splitting of accountability and have come together to lead.  They are also extending an offer to other corporate tenants to join them in publicly endorsing the linked Sustainable Tenants’ Leasing Principles.  These six simple principles listed below all help corporate tenants advance their own commitment to sustainable business through urging landlords to offer sustainable options and relevant data in a timely manner.   

sixslprinciples

This is an effort that will directly benefit your firm as it increases your firms negotiating power when it seeks more sustainable and healthy real estate and energy – especially in smaller leased space around the world. Some of the world’s fastest growing and most sought after corporate tenants have already committed to the Sustainable Tenants’ Leasing Principles including Akamai, Anthem, Intuit, Lenovo, LinkedIn Oracle, Pegasystems  and Teradyne.  Your firm could join them as original signers of the Sustainable Tenants’ Leasing Principles if your firm can commit to supporting the Sustainable Tenants’ Leasing Principles over the 30 day “Earth Month” beginning April 22nd.

Sustainability Roundtable Inc. (SR Inc) Member-clients requested that the linked Sustainable Tenants’ Leasing Principles be created to build on the success of the Corporate Renewable Energy Buyers’ Principles and the Corporate Colocation & Cloud Buyers’ Principles (which now regularly appear referenced in RFPs issued by top corporate buyers the world over).  Consequently, SR Inc created the Sustainable Tenants’ Leasing Principles with guidance from Patrick Flynn, Senior Director of Sustainability at Salesforce (who helped lead on the creation of the Corporate Colocation & Cloud Buyers’ Principles).  Signing companies, however, need not be SR Inc Members and absolutely no costs or obligations are required.  Indeed, all sustainability conscious commercial tenants are encouraged to sign onto this simple but important statement of shared principles. 

Pro Bono Service:  If your company does join these world leading companies as an original signer of the Sustainable Tenants’ Leasing Principles before May 23rd 2017,  SR Inc will donate to your firm on a pro bono – zero cost – basis, SR Inc’s proprietary, editable, Sustainable Leasing Strategy Playbook developed with leading Member-clients over seven plus years, featuring actionable Executive Guidance & Tools for Site Selection, RFPs (including negotiating leverage matrix), LOIs, Lease Language & Work Letter (for tenant build-out). 

The companies signing the Sustainable Tenants’ Leasing Principles look forward to the prospect of your firm joining them to send a needed and clear signal to a fragment, multi-trillion dollar, landlord market about the fact the best corporate tenants do care about the need to move to sustainably healthy workplaces.  Don’t hesitate to reach out to me or Brittany Doherty, Program Director of SR Inc’s Sustainable Business & Enterprise Roundtable, if you think that your firm may want to lead in this simple, highly efficient and effective manner this Earth Month.

 

 

JBJim Boyle is CEO & Chairman of Sustainability Roundtable, Inc. For nearly eight years, Jim has led full-time teams of diverse experts assisting world-leading corporations, real estate owners, and federal agencies in their move to greater sustainability. He has led in developing SR Inc’s confidential, industry specific, annual management assessment and recommendation process for more sustainable operations and real estate that is compatible with major public standards globally. Further, he has directed the development of hundreds of pieces of SR Inc original Executive Guidance & Tools and led in the creation of SR Inc’s Renewable Energy Procurement Services (REPS) practice, which represents top corporate off-takers across the U.S. and internationally.  Before founding SR Inc, Mr. Boyle advised fast growth technology firms, private equity firms, and institutional investors as an adviser on real estate strategy and implementation, and before that, as a large law firm attorney assisting corporate and investment clients on complex real estate and environmental compliance-related issues. Jim is a graduate of Middlebury College and Boston College Law School, who early in his career served as a federal law clerk and as an aide to John F. Kerry in the U. S. Senate.

BDBrittany Doherty, Program Director joined SR Inc at the start of 2015. Brittany has two years of experience managing and writing Sustainability Reports for the Town of Dartmouth in accordance with the comprehensive, credible, and widely used standard, the Global Report Initiative (GRI). Brittany graduated with a B.S in Organizational Behavior Management & Sustainability from the University of Massachusetts-Dartmouth, while actively developing a variety of sustainability initiatives for the university. Brittany served as the President of Net Impact at her university for three years, was a member of the Fair Labor Association Student Committee for two years, and also launched a pilot-teaching-program to integrate Sustainability into the global network of Junior Achievement. While Brittany was attending graduate school, earning a certificate in Environmental Policy, she worked as an Analyst for the Town of Dartmouth, assisting in the advancement of the Town’s economic, environmental and social policies. Outside of her work at SR Inc, Brittany has volunteered on the Sustainable Belmont Committee and assisted in the Town’s GHG Inventory project, as part of the Climate Action Plan. She also served as a valuable member for the Belmont Solar Campaign (BSC).

Selling Your CFO on Large Scale Off-site Renewables

April 21st, 2017

At a recent multi-member discussion focused on “Selling your CFO on Large Scale Off-site Renewable Energy,” David Osborn, Sustainability Roundtable Inc. COO & Senior Adviser, shared key learnings from Member-Clients regarding the “Virtual Power Purchase Agreement (VPPA)/Contract for Differences (CFD)” transaction structure that has reshaped many Member-Clients’ Sustainability Programs.  Patrick Sullivan, NRG’s Vice President of Development, provided a detailed description of the VPPA/CFD transaction, and Nicola Peill-Moelter, Member-Client Akamai’s Senior Director of Environmental Sustainability, shared Akamai’s experience developing a large scale VPPA/CFD project to enable Akamai to advance towards 50% renewable energy — even as it quickly scales its network worldwide.

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Many Sustainability Roundtable Inc. (SR Inc) Member-Clients were years ahead of the curve when they made renewable energy a leading element of their companies’ corporate sustainability strategies (as has been regularly reported on this blog – for instance, see A Revolution Towards Renewable Energy Portfolio-wide and a 2017 update). Today, 89 global corporations, including nearly a dozen SR Inc Charter Members, have joined the RE100 and committed to powering 100% of their operations with renewable energy. This trend indicates a much broader change in the global energy market that has caused many of the largest and most sophisticated corporate energy consumers to recognize that renewable energy technologies have become a necessary component of a sound energy strategy. Beyond that, they can provide a financial hedging strategy that produces savings, mitigates energy price risk, and provides environmental benefits.

While SR Inc has long been advising Member-Clients on onsite renewable energy procurement, the concept of Virtual Power Purchase Agreements (VPPAs) – and, specifically, the Contract for Differences (CFD) form of VPPAs – has driven the adoption of ambitious renewable energy goals for leading global corporations, especially among energy intensive global IT companies. The advent of off-site VPPA/CFD agreements, which do not require companies to have optimal sites for renewable energy projects, has also transformed a growing number of SR Inc Member-Clients’ sustainability programs, as they create a financially attractive path to achieving ambitious environmental goals these companies would not otherwise pursue.

A large scale, off-site Virtual Power Purchase Agreement (VPPA), structured as a Contract for Difference (CFD), is an innovative financial transaction that has made it possible for top credit corporate buyers to improve their financial risks profile while winning Renewable Energy Certificates (RECs) for providing unequivocally “additional” renewable energy to the grid (click to enlarge).

Companies opt to do VPPAs over traditional PPAs when they want to procure renewable energy but cannot cost-effectively develop renewable energy onsite, or when they do not pay a utility for their electricity (i.e., they pay a landlord or colocation facility).  Many SR Inc Member-Clients’ real estate portfolios are predominately in leased space.  These companies in particular are interested in scaled off-site solutions, and more specifically, in how to help their CFO understand the financial benefits of these transactions in the face of growing energy price volatility.

Consequently, David Osborn, SR Inc COO & Senior Adviser, drew from SR Inc’s experience advising dozens of Member-Clients on onsite and offsite renewable energy solutions, to share Key Learnings regarding how to make the case internally for VPPA/CFDs.

Below is a public summary of the Key Learnings David Osborn reviewed:

  1. Develop a renewable energy strategy for your entire portfolio, including leased space – Off-site deals for energy consumed in leased space are available and you can win a meaningfully better deal in 2017 than in 2016.
  2. Act to integrate renewable energy into your corporate sustainability strategy; waiting will risk a buyer-favorable market – Very low interest rates, 30% federal tax credits and fierce supplier competition are creating value opportunities that are time sensitive.
  3. On owned sites where you pay the electricity bill, onsite PPAs or Community Solar could drive year one savings in several US markets – Examine your U.S. portfolio for sites where: (a) changing regulations are favorable; (b) you are paying $.07/kWh+; (c) your sites enable solar; or (d) community renewable energy is available; or (e) the relevant utility offers a “green tariff” to corporate buyers.
  4. For sites that are leased or otherwise incompatible with renewable energy, consider offsite options – If you are able to procure renewable energy from the same utility district as your demand, it can provide both high-quality bundled RECs and a robust hedge against electricity price risk. If the renewable energy system is not grid-proximate, it can still provide a financial hedge and high quality RECs.
  5. As the market has matured, responsible corporate procurement requires a managed, auditable procurement process – With dozens of deeply experienced, well-financed, and well referenced corporate suppliers and scores of combined transactional, technological and site-based options, responsible corporate procurement of renewable energy solutions requires a comprehensive, auditable process.
  6. Corporate off-takers should engage a strategic adviser to help manage their renewable energy procurement – Experienced corporate off-takers develop a blended team of internal experts with deep experience in renewable and conventional energy combined with outside advisers compensated by the corporate off-taker and/or any winning suppliers for a transparent, market-based fee disclosed in the RFP.
  7. Integrate storage technology into your renewable energy strategy – Storage technology advancements, rapidly decreasing costs, and changing grid tariff structures virtually necessitate including storage capability as part of onsite and offsite renewable energy strategies.
  8. Examine opportunities for aggregated procurement of offsite renewable energy – Member-Clients are increasingly interested in aggregated procurement of renewable energy to improve economic terms, reduce transaction costs and further de-risk procurement.
  9. Engage the CFO – Develop a team, plan and market-tested data to engage the CFO 6 to 9 months before procurement to demonstrate why a renewable energy strategy and implementing transactions provide a superior, risk-adjusted opportunity.

The Virtual Power Purchase Agreement (VPPA) & the Contract For Difference (CFD) Transaction Structure:  A Sustainable Game Changer

Vice President, Renewables Development at NRG Energy

Patrick Sullivan, Vice President, Renewables Development at NRG Energy

Patrick Sullivan, Vice President of Renewables Development at NRG, a SR Inc Premier Thought Leader, provided a detailed explanation of the VPPA/CFD transaction structure that has transformed so many corporate sustainability programs. He noted that corporate customers are increasingly seeking offsite PPAs, given the cost of solar and wind energy has dropped significantly in the past ten years, often to a level competitive with the cheapest form of energy available from the grid. VPPAs produce many of the benefits of a more traditional PPA with no capital expenditure required by the customer.  Importantly, VPPAs enable “additionality” by creating a long-term financial contract to support the development and construction of new renewable generation facilities. Like a traditional PPA, VPPAs produce RECs that the buyer can retire to claim emissions reductions and help achieve corporate sustainability goals. Although a VPPA is financial in nature and bears no direct relationship to the actual electricity consumption of the offtaker, it does serve as a long-term hedge against energy price volatility, acting to offset retail energy price fluctuations and reducing a buyer’s exposure to volatile fuel prices over the long-term.

NRG_CFDs

Sample graphic of a CFD, with NRG as the renewable energy developer, owner and operator.

These types of contracts differ from a physical or traditional PPA, in that in a traditional PPA, the corporate offtaker physically takes title to the electricity from the system and pays the system provider an agreed upon PPA price over the term of the multi-year contract. Rather than being strictly a financial hedge, a traditional PPA is an energy hedge applied to the offtaker’s load or monetized in the market.

Leveraging the VPPA/CFD Transaction Structure to Super Charge Your Sustainability Strategy

Member Executive Nicola Peill-Moelter, Senior Director of Environmental Sustainability at Akamai Technologies, described how the Akamai team built the business case for CFDs internally, and specifically how they presented the opportunity to the company’s CFO. Akamai, a global Content Delivery Network service, has grown rapidly, with a 20x increase in peak traffic since 2009, while carbon increased only two-fold over the same period. Renewable energy is a key to this decoupling of business growth from energy consumption and carbon emissions.

Nicola Peill-Moelter, Senior Director of Environmental Sustainability at Akamai Technologies

Nicola Peill-Moelter, Senior Director of Environmental Sustainability at Akamai Technologies

The challenge for Akamai, like many companies, is that its office and network operations are highly-distributed globally with low power demand in each. Further, most of these facilities are leased, so Akamai pays the landlord (versus the utility) for electricity. This common set of circumstances means that a CFD is the only suitable option for procuring renewable energy in the form of bundled RECs. Furthermore, because CFDs (unlike PPAs) expose the buyer to electricity pricing volatility, the business case must be stronger, and not strictly tied to potential lower electricity costs which may be a weak argument for distributed, outsourced operations.

Akamai recently announced a 2020 goal to reduce greenhouse gas emissions by 40% from 2015 levels, which hinges on a second goal to power 50% of global network operations from renewable energy. Below is Nicola’s own summary of the CFD structure Akamai opted to pursue to achieve this goal:

“Thanks to finance innovation, a long-term CFD with a renewable energy-project developer is a viable procurement mechanism that aligns with our principles. We agree to act as the long-term energy “off-taker” at a fixed price, called the strike price. With this commitment in hand, the developer can secure funding for a project that will generate electricity commensurate with our annual energy usage in that power market. Once the project is up and running, the electricity is sold into the wholesale market, with the difference between the strike and market prices flowing to us as a debit or credit, along with the credits for the renewable energy generated (bundled RECs) which are subsequently retired.”

In order to get buy-in from the C-Suite for these goals, Nicola and team had to build the business case for renewable energy, which boiled down to 4 key questions:

  1. Why are we doing this?
  2. How will we achieve these goals?
  3. How much will it cost?
  4. Are the risks acceptable and manageable?

To ensure the initiative’s success, Nicola identified key players and ensured she had a strong renewable energy strategy team in place. She recommended that such a team consist of a:

  1. Sustainability champion: a strong influencer who instigates and leads the project/strategy with the goal of reducing carbon emissions but who can also build a strong business case
  2. Executive champion: an executive who fully supports the project/strategy – ideally the executive whose division is responsible for a major portion of the company’s energy consumption and carbon emissions
  3. Renewable energy consultant: a subject matter expert who helps develop the strategy and is compensated for the best outcome for your company
Akamai_sellingtheCFO

Key players needed to get internal buy-in for a CFD at Akamai.

Other players who played a key role and ultimately needed to be involved in making a deal possible included Executive Management, the CEO and CFO, a treasurer, and a support team including representatives from legal and accounting and outside legal and accounting consultants with expertise in renewable energy.

The business case for a CFD should go beyond potential electricity cost savings. A core part of the business case may include the strong trend of growing consumer concern about climate change, corporations setting renewable energy goals, and strengthening supplier sustainability requirements. Of course, when pitching to the C-Suite, Nicola stressed the importance of speaking in terms they understand – e.g. “competitive value”, “competitive differentiation”, “product features”, and “market trends” – to tell a story compelling to the audience. She also made the case for the “why” in a way that resonated with top decision makers: customer demand. With 89 companies and counting committed to 100% renewable energy via the RE100, and investors applying similar pressure, companies like Akamai need to display their commitment to provide clean-powered services (products) in order to remain competitive.

Helping Your CFO Understand Why So Many Top Corporations Have Found the VPPA/CFD Transaction Structure Attractive

A compelling business case garners buy-in from the CEO and most of the executive team. But ultimately, they look to the CFO to give her/his blessing before signing off. It’s easy for the CFO to say “No.” The needed support from the CFO comes from a  trusted relationship between the CFO and the sustainability champion; demonstration of a well-thought out procurement strategy; well-vetted financials; and an assessment of and mitigation plan for the risks.

 

Akamai_CFDs

SR Inc has been pleased to advise many Member-Clients leading the historically important embrace of renewable energy technologies world-wide. SR Inc recommends that companies avoid committing to energy-related transactions until they have systematically examined opportunities for renewable energy procurement portfolio-wide. SR Inc looks forward to continuing work with Member-Client companies to define management best practices in integrating advanced energy systems and transactions into portfolio-wide sustainability strategies to help meet individual and aggregated needs for procurement of more sustainable energy.

The slide presentation accompanying the Symposium summarized in this blog are available in SR Inc’s Member-only Digital Library here.  Interested non-member companies are encouraged to reach out to SR Inc to request an invitation to join SR Inc’s shared-cost industry leadership service here.

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kwall_linkedin_pic-1 (2)As a Senior Manager of Research & Consulting at SR Inc, Kelsey Wallace supports research, development and implementation of enterprise sustainability strategies for companies that recognize the business imperative of more sustainable operations in the face of climate change and an increasingly resource-constrained world. Prior to joining Sustainability Roundtable, Inc., Kelsey worked for an environmental/engineering consulting firm where she supported clients including  the U.S. Environmental Protection Agency and the U.S. Green Buildings Council to promote sustainable buildings, clean energy, and safe drinking water. Kelsey also devoted a year to national service with the AmeriCorps National Civilian Community Corps, where she worked on team-based conservation and community development projects throughout the Southwest United States. Kelsey has her B.A. in Environmental Studies from Connecticut College.

Global, National, State & Municipal 100% Renewable Energy Commitments

March 16th, 2017

As leading enterprises make dramatic transitions toward renewable energy throughout their portfolios, global, national, state and municipal commitments are acting to push for 100% renewable energy. Our previous blogs, A Revolution Towards Renewable Energy Portfolio-wide (January 9, 2017 updateApril 26, 2016 update) and Innovators for a Clean Energy Future reflect the importance of technical, market and regulatory change in corporate renewable energy portfolios. Nearly a dozen SR Inc SBER Charter Members have joined RE100, a collaborative, global initiative of influential businesses committed to a public goal to procure 100% of their electricity from renewable sources by a specified year. As SR Inc helps Member-clients set company goals, many have requested an outline of public sector commitments – especially those affecting the utilities. Consequently, we drafted the below blog to highlight global, national, state and municipal commitments which are helping to set the public sector context for the renewable energy revolution.

Global Renewable Energy Commitments

In Paris in December 2015, the U.N.’s 21st Conference of Parties brought widespread agreement by all the governments of the world on goals, metrics and reporting to avoid the most catastrophic effects of climate change. Under the Paris Agreement, countries agreed to hold the increase in global average temperature to well below 2 degrees C (3.6 degrees F), pursue efforts to limit the increase to 1.5 degrees C (2.7 degrees F), and achieve net-zero emissions in the second half of this century. The G20 could advance this global climate action by making further progress on the topic of fossil fuel subsidy reform. The G20 have agreed to phase out inefficient fossil fuel subsidies that encourage wasteful consumption over the “medium term”. Related, a Boston-based nonprofit organization, Ceres created the “Clean Trillion” investment campaign, a clarion call to invest more than $1 trillion per year in clean energy through 2050. Meeting the Clean Trillion goal will be an immense challenge, but it’s achievable if businesses, investors and policymakers join forces.

National Renewable Energy Commitments

Germany

Germany is well recognized as an international leader in renewable energy. The Energiewende (German for energy transition) is the transition by Germany to a low carbon, environmentally sound, reliable and affordable energy supply. Hermann Scheer, who was a member of the German Parliament for three decades, was a driving force in making Germany a world leader in renewable energy. Scheer was the main architect of Germany’s pioneering Renewable Energy Act, which set up a system of incentives paid for by utilities to encourage hundreds of thousands of home owners and investors to build solar and wind power systems. Scheer, named as one of Time Magazine’s five “heroes for the green century” in 2002, won the Alternative Nobel Prize in 1999 for his commitment to renewable energy. Visit Hermann Scheer’s website for his complete bio.

  • Germany has promised to transform its electricity supply to 100% renewable energy by 2050.
  • Germany aims to cut GHG emissions by 40% by 2020 and up to 95% in 2050, over a 1990 base year.
  • On December 26, 2015, German renewable energy met 81% of the nation’s energy demand.
  • Annually, Germany generates about 30% of its electricity from renewables.
  • By 2022, all 17 of Germany’s nuclear plants will be closed.
  • Polls reveal citizens’ support for Energiewende from a study by the Universities of Stuttgart and Münster in cooperation with Fraunhofer ISI and ISE. Key phrasing for measuring citizens’ 2016 support for Energiewende: “The Energiewende is…”
    • Very Important: 57%
    • Important: 36%
    • Less Important: 5%
    • Not at all Important: 1%

Denmark

Denmark’s goal is to achieve 100% renewable power and heat by 2035 and 100% renewable energy in all sectors by 2050.

  • Denmark already achieved moments of 100% + renewable energy attributed to its excellent – and similar to Massachusetts – offshore wind resources. Denmark’s population is 5,690,750 (2016) while Massachusetts’ population is 6,811,779 (2016).
  • The Danish Government’s plan “Our Energy” is based on the previous government’s Energy Strategy 2050, but raises the bar higher.
  • The long-term goal of the plan is to implement an energy and transport network that relies solely on renewable energy sources.
  • By 2020, the initiatives will lead to extensive reductions in energy consumption, making it possible for half of the country’s electricity consumption to be covered by wind power.
  • Coal is to be phased out of Danish power plants by 2030.
  • Denmark’s 2015 GDP was $295.09 billion (World Bank).

Costa Rica

Costa Rica’s goal is to achieve 100% renewable energy (no target given), with an additional goal of carbon neutrality by 2021.

  • In 2015, the nation had achieved supplying 99% of electricity demand with renewable sources, approximately 80% of which was by hydropower. The previous year, renewables covered about 90% of demand as electricity generation in Costa Rica broke down by source to:
    • Hydropower (including pumped storage): 6717 GWh (IEA) / 65.75% (Natl.  Energy Plan VII)
    • Geothermal: 1538 GWh (IEA) / 15.06% (Natl. Energy Plan VII)
    • Oil: 1043 GWh (IEA) / 10.21% (Natl. Energy Plan VII)
    • Wind: 735 GWh (IEA) / 6% (Natl. Energy Plan VII)
    • Bioenergy: 181 GWh (IEA) / 2.96% (Natl. Energy Plan VII)
    • Solar PV: 3 GWh (IEA) / .02% (Natl. Energy Plan VII)
  • The population of Costa Rica is 4,857,218 (2016).
  • Costa Rica’s 2015 GDP was $54.137 billion (World Bank).

United States

100% Clean & Renewable Energy Resolution by 2050 (Markey and Merkley)

On December 7, 2016, Senators Edward J. Markey (D-Mass.) and Jeff Merkley (D-Oreg.) introduced a Senate Resolution calling for generating 100% of the electricity consumed in the United States from clean and renewable energy resources by 2050. The resolution highlights the following goals:

  • Supports a national goal of phasing out fossil fuel emissions and, by 2050, generating 100% of the electricity consumed in the United States from clean energy resources, such as solar, wind, geothermal, and other renewable resources; and
  • Supports policies to achieve that goal that will—
    • Create jobs for all individuals, especially in communities with high rates of unemployment or underemployment, and build a sustainable economy; and
    • Ensure universal access to clean energy for all homes and businesses in the United States, including for moderate- and low-income families.
  • Res.632 Co-sponsors:
    • Senator Jeff Merkley (D-OR)
    • Senator Benjamin L. Cardin (D-MD)
    • Senator Brian Schatz (D-HI)
    • Senator Bernard Sanders (I-VT)
    • Senator Mazie K. Hirono (D-HI)
    • Senator Al Franken (D-MN)
    • Senator Elizabeth Warren (D-MA)

State Renewable Energy Commitments

Massachusetts

In 2017, State Representative Sean Garballey (D-Arlington), State Representative Marjorie Decker (D-Cambridge), and State Senator Jamie Eldridge (D-Acton) filed a bill that would commit Massachusetts to obtain 100% of its energy from clean, renewable sources like solar and wind.

  • An Act to transition Massachusetts to 100% Renewable Energy (HD.3357) would require the state to achieve 100% renewable electricity generation by 2035, and Bill SD 1932 phases out the use of fossil fuels across all sectors, including heating and transportation, by 2050.
  • The bill supplements an already concerted effort by Massachusetts to pursue a low-carbon economy– the Massachusetts Global Warming Solutions Act which requires the state to reduce greenhouse gas emissions 80% from 1990 levels by 2050.
  • The bill has been co-sponsored by 53 Massachusetts lawmakers in the House and Senate.

California

Two years ago, California pushed through a law requiring the state to generate half of its electricity from renewable sources by 2030. However, in February 2017, California Senate leader Kevin de León increased the percentage and introduced legislation (SB 584) that, if approved, would require the state to source 100% of its electricity from renewables by 2045.

Timeline of CA Renewables Portfolio Standard:

  • 2002: Senate Bill 1078 establishes the RPS program, requiring 20% of retail sales from renewable energy by 2017.
  • 2003: Energy Action Plan I accelerated the 20% deadline to 2010.
  • 2005: Energy Action Plan II recommends a further goal of 33% by 2020.
  • 2006: Senate Bill 107 codified the accelerated 20% by 2010 deadline into law.
  • 2008: Governor Schwarzenegger issues Executive Order S-14-08 requiring 33% renewables by 2020.
  • 2009: Governor Schwarzenegger issues Executive Order S-21-09 directing the California Air Resources Board, under its AB 32 authority, to adopt regulations by July 31, 2010, consistent with the 33% renewable energy target established in Executive Order S-14-08.
  • 2011: Senate Bill X1-2, signed by Gov. Edmund G. Brown, Jr., codifies 33% by 2020 RPS.
  • 2015: Senate Bill 350, signed by Gov. Edmund G. Brown, Jr. codifies 50% by 2030 RPS.

New York

In 2014, Governor Andrew M. Cuomo launched New York’s signature energy policy, Reforming the Energy Vision (REV), mandating that the state get 50% of its electricity from renewable sources by 2030. REV aims to build an integrated energy network able to harness the combined benefits of the central grid with clean, locally generated power.

  • Gov. Andrew Cuomo has plans to cut carbon pollution in New York by 40% by 2030 and 80% by 2050.
  • He has pledged to add 150,000 solar panels and 300 wind turbines around the state.
  • In its initial phase, utilities and other energy suppliers will be required to procure and phase in new renewable power resources starting with 26.31% of the state’s total electricity load in 2017 and grow to 30.54% of the statewide total in 2021.
  • Nearly 23% of New York’s electric power today comes from a variety of renewable sources, mainly hydroelectric with significant contributions from wind, biomass and solar resources.

Hawaii

Gov. David Ige signed into law a bill (HB623) regarding Hawaii’s commitment to clean energy by directing the state’s utilities to generate 100% of their electricity sales from renewable energy resources by 2045. Under Hawaii’s Renewable Portfolio Standard (RPS), each electric utility company that sells electricity for consumption in Hawaii must establish the following percentages of renewable electrical energy sales:

  • 10% of its net electricity sales by December 31, 2010
  • 15% of its net electricity sales by December 31, 2015
  • 30% of its net electricity sales by December 31, 2020
  • 40% of its net electricity sales by December 31, 2030
  • 70% of its net electricity sales by December 31, 2040
  • 100% of its net electricity sales by December 31, 2045

Municipal Renewable Energy Commitments

  • Aspen, Colorado commits to 100% Renewable Electricity at Aspen Electric (municipality) by 2015:
    • As of 2015, Aspen achieved 100% renewable power.
  • Burlington, Vermont commits to owning or contracting with renewable power generation facilities to cover the equivalent of 100% of electricity demand citywide:
    • In September 2014, the Burlington Electric Department reached its aim to own or purchase enough power generated by renewables to cover the equivalent of 100% of the demand citywide.
  • Columbia, Maryland announced in 2015 it would offset 100% of its energy use from renewable sources and signed a 20-year power purchase agreement with SunEdison:
    • Columbia is now powered by 100% renewable electricity – a mix of 75% wind and 25% solar.
  • Greensburg, Kansas commits to 100% renewable power, including electricity, as part of a master sustainability plan:
    • The Greensburg Wind Farm, which was built as part of the master plan, produces enough electricity to power every home, business, and municipal building in the town and surrounding area.
  • San Diego, California set a goal to achieve 100% renewable electricity community-wide by 2035:
    • In September 2014, Mayor Kevin Faulconer (R-San Diego) presented his Climate Action Plan, which includes among other provisions, a target of reaching 100% renewable power for all of San Diego’s homes and businesses by 2035, with an emphasis on using local resources. After a year of state-mandated environmental review, the Climate Action Plan, which received broad, multi-stakeholder, bipartisan support, was officially adopted by the City Council on December 15, 2015.
  • Additional cities who have pledged 100% renewable energy: Del Mar, California, East Hampton, New York, Georgetown, Texas, Grand Rapids, Michigan, Lancaster, California, Moab, Utah, Nassau, New York, Palo Alto, California, Park City, Utah, Pueblo, Colorado, Rochester, Minnesota, Salt Lake City, Utah, San Francisco, California, San Jose, California, Santa Monica, California, Taos, New Mexico.
  • 17 cities and towns in Massachusetts have set ambitious goals to promote clean energy and to reduce their energy usage.

 

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BD

Brittany Doherty, Program Director joined SR Inc at the start of 2015. Brittany has two years of experience managing and writing Sustainability Reports for the Town of Dartmouth in accordance with the comprehensive, credible, and widely used standard, the Global Report Initiative (GRI). Brittany graduated with a B.S in Organizational Behavior Management & Sustainability from the University of Massachusetts-Dartmouth, while actively developing a variety of sustainability initiatives for the university. Brittany served as the President of Net Impact at her university for three years, was a member of the Fair Labor Association Student Committee for two years, and also launched a pilot-teaching-program to integrate Sustainability into the global network of Junior Achievement. While Brittany was attending graduate school, earning a certificate in Environmental Policy, she worked as an Analyst for the Town of Dartmouth, assisting in the advancement of the Town’s economic, environmental, and social policies. Outside of her work at SR Inc, Brittany has volunteered on the Sustainable Belmont Committee and assisted in the Town’s GHG Inventory project, as part of the Climate Action Plan. She also served as a valuable member for the Belmont Solar Campaign (BSC).

Corporate Sustainability Growth Driven By Financial Impact

February 28th, 2017

Corporate Sustainability is defined as “a more strategic approach to business innovation and optimization in a world of rising resource constraints” (based upon the Dow Jones Sustainability Index (DJSI) definition – see our blog, An Unprecedented Opportunity & Moment for CRE). As such, it is no surprise that Corporate Sustainability is now a mainstream management strategy framework among large companies, public and private:

  • 43% of the Fortune 500 have set and reported Corporate Sustainability targets, including over half the Fortune 100
  • The Fortune 100 alone has reduced enough carbon impact equivalent to taking 15 coal-fired power plants out of commission
  • 87 companies have committed publicly to go to 100% renewable energy; some have already accomplished this goal and others are close
  • In 2016, solar and wind alone accounted for about 65% of new electrical capacity here in the US
  • 93% of CEO’s surveyed by Accenture think sustainability issues will be “key to their future business success”…
  • …and 63% of CEO’s surveyed in 2013 believed that Corporate Sustainability would “transform their industries within the next 5 years” – that puts this movement on par with the Internet, Business Process Resdesign, and the Total Quality Movement
  • 80% of institutional investors care about a company’s sustainability efforts, according to a 2016 MIT Sloan Business School and Boston Consulting Group study
  • Case studies abound within the thousands of companies, organizations, countries and regions that report to the Carbon Disclosure Project[1] (CDP) and Global Reporting Initiative[2] (GRI)

For those awake to this opportunity, most of the above is not really news, but rather a continuation of a megatrend that has been building steam for years. However, as an “approach to business”, what is remarkably NOT often reported is the financial impact of pursuing this management approach to business. We are not talking about the payback on LED investment, or the ROI for installing a solar array, or even the business case for LEED or BREAM certification for a building. Rather, we are referring to the investible business case for integrating Corporate Sustainability into how an enterprise operates, replete with cost efficiency, process/product/service design, talent attraction and retention, customer acquisition, retention and spend share, investor risk/return assessment and future regulator risk impact.

This lack of communication may reflect that companies may not fully understand the business case and impact of bringing this management approach to their business strategy and operations. At least in part as a result of this lack of broad financial impact communication, there is still a longstanding perspective – far more prevalent outside of our clients than within – that Corporate Sustainability is just “the right thing to do”, but that it “costs money”.  It also may help explain why only 31% of middle managers (who largely are responsible for implementation) believe that investors care about Corporate Sustainability (when in fact more than 80% of investors do) (same Sloan Business School and Boston Consulting Group study). This gap is furthered likely by one side of the national political news these days which mirrors this perception that “it is a drag on our economy”.

So, why is it that all of these leading corporations are putting so much behind their corporate sustainability efforts?  Are they doing this to hurt their shareholders returns? Are they doing this to weaken their competitive cost structures? Are they doing this because those burdensome regulations are forcing them to (show me the regulation requiring commitment to 100% renewable energy)? Anyone who is in business today knows that the answer to all the above is “not a chance”. While many examples exist today of the financial impact from Corporate Sustainability, we share what should catch the attention of corporate executives and managers:

  • Bloomberg – Demonstrating $25.5 million in savings in 2015 on the way to achieving a 2020 goal for $100 million in cost savings
  • SAP – Sharing an integrated reporting model in which, for example, each 1% improvement in 3 key metrics often impacted by Corporate Sustainability programs drives 3% operating profit lift
  • Harvard Business School Study – Quantifying incremental 7-9% shareholder value growth for companies performing strongly on “Material” ESG drivers.

Companies are about sustained shareholder value and profit growth, and any strategy they implement is going to need to accomplish that.  The Corporate Sustainability growth highlighted above is driven by sustained financial impact far more than by simply being “the right thing to do.”

[1] Today some 5,800 companies, representing close to 60% of global market capitalization, disclose through CDP.

[2] The GRI Disclosure Database contains 2,261 GRI reports for 2016; GRI reports include a GRI Content Index and do not include GRI reports that reference the guidelines but do not include a GRI Content Index (“GRI-referenced reports”) or those sustainability reports that do not reference GRI Guidelines.

 

 

David Osborn, COO, SR Inc

David Osborn, COO, SR Inc

David Osborn is an accomplished corporate sustainability advisor serving dozens of SR Inc’s Fortune 500 and mid-sized client companies as they drive significant operational efficiencies and better align with talent, customers, investors, and regulators through corporate sustainability strategy. From his career in business consulting and executive leadership, David brings to SR Inc over 25 years of experience in building professional services and technology-driven businesses serving a broad range of client industries. David graduated from Dartmouth College where his studies concentrated in Economics and Geology. He received numerous academic honors highlighted by a citation in mathematics from the then college President, John G Kemeny. After IT systems experiences at Arthur Anderson (now Accenture) and Wang Labs, David graduated from Northwestern’s Kellogg Graduate School of Management with honors, a member of the Beta Gamma Sigma Honor Society and in the top 3% of his class.

After receiving his MBA, David cut his teeth at Bain & Company in their Boston office and then progressed up to Managing Partner at Booz, Allen & Hamilton (BAH) where he was ultimately elected by his Partners to head their Australasian business. After helping to grow that business from a very early stage to a staff of more than 100, David returned to the US to head BAH’s Retail Financial Services practice in North America. After a few years back in the US market, David transitioned out of his highly successful consulting career and served as Managing Partner / EVP at two innovative business service companies: the first a 150 employee, VC-backed innovative technology services provider in Boston, and the second a high-end, 200+ employee proprietary marketing services provider located in Princeton and New York. In both companies, David led over 200% growth within 2-3 years while substantially building the companies’ delivery teams and capabilities.

Scoring Corporate Sustainability Financial Impact

February 27th, 2017

In our Membership-based Strategic Advisory & Support Service at Sustainability Roundtable, Inc (SR Inc), we have the privilege of working with dozens of companies, many in the Fortune 500, and we communicate with scores of others all year long. Among our leading clients, we share one example of how companies are scoring the financial impact of their Corporate Sustainability program as a business strategy.  Bloomberg, named our Corporate Leader of the Year in both 2013 and 2016, has made their Corporate Sustainability strategy investible by demonstrating the financial gains over years of incorporating Corporate Sustainability into their annual budgeting. To underscore that achievement, Bloomberg (a private company) publicly reports their cost savings and has set a 2020 corporate goal for cost savings. Bloomberg’s goal is to achieve $100 million in cost savings by 2020 and has reported that they saved $25.5 million in 2015. Notably, hand in hand with these financial gains, they also report that they have reduced carbon emissions by 35% from a 2007 extrapolated baseline and absolute emissions by 11% despite approximately doubling in size since 2007.

There are three interdependent dimensions to Bloomberg’s approach that we find particularly impressive and repeatable by other companies:

  1. They track detailed project-level savings over multiple years to account for how efficiencies have improved the business performance as the company grows. Much more common are individual project business cases that are approved (or not) at a point in time given very reasonable assumptions at the time.
  2. They aggregate a set of projects under a single overall strategy with a common theme – “The focus of Corporate Sustainability strategy drove us to invest in all these projects.”

    Jason Shulman, Global Head of Sustainable Operations, Bloomberg

    Jason Shulman, Global Head of Sustainable Operations, Bloomberg

  3. The CFO approves investments in the strategy – not the individual projects. This has been accomplished by enabling the finance function to “audit the Corporate Sustainability books,” helping to gain CFO buy-in.  Not all projects, looked at on a stand-alone basis, have an immediate positive return, but Bloomberg incorporates them to bolster implementation of the overall program.

The chart below was part of a presentation by Bloomberg’s Jason Shulman to many of our client executives at SR Inc’s Summit for Sustainable Operations V in December in Washington DC. The first graph depicts the overall savings achieved since a 2007 baseline, with a breakdown of Capex and Opex savings within their Facilities budget targeted for an audience of leading Corporate Real Estate (CRE) and Sustainability executives.

Total 2008-2015 Portfolio-wide Project Savings/Cost Avoidance by Project Type

graph

The second graphic shows the impressive emissions reduction achieved hand-in-hand with the expense savings.

graph2

We consider this highlighted example as among best practice approaches in particular because it has materially changed the way Bloomberg invests in its company.  Jason also explained how this investment grows as upper management – as well as implementing operating departments – increasingly buy-in to the strategy because of the proven good-for-business track record.  Additionally, in the “war for talent”, being able to speak credibly to the full triple bottom-line impact of Corporate Sustainability favorably impacts Bloomberg’s ability to attract and retain talent.

Unsurprisingly, this approach is now of interest to other Member Executives, and SR Inc will examine this approach further in 2017 along with other promising approaches tied to more integrated reporting. SAP serves as one of those examples that also quantifies the impact on operating profit from drivers often impacted by Corporate Sustainability programs like talent retention, SAP’s own Health & Culture index and employee engagement improvements.  (See my relevant tweet on this from January.)

Bringing the financial and shareholder value impact (see prior SR Inc blog on Harvard Business School’s study showing 7-9% shareholder growth impact from strong Environmental, Social & Governance (ESG) performance, particularly on “Material” ESG drivers – Corporate Sustainability Shareholder Value Impact) to the C-Suite will serve this megatrend well.  While the largest corporations have done a great deal, we are still in the early days of this change. The Paris Accord, signed by 196 countries in December 2015, demonstrates governmental leadership buy-in.  However, to get the job done will require businesses globally to be a (if not THE) primary driver of implementation. To make that happen, companies need to understand the full business case and performance benefits of aligning their strategy and operations with the ever-growing resource efficiency, social and governance demands of customers, competitors, talent and investors within the bounds established by regulators.

 

DavidO

David Osborn, COO, SR Inc

David Osborn is an accomplished corporate sustainability advisor serving dozens of SR Inc’s Fortune 500 and mid-sized client companies as they drive significant operational efficiencies and better align with talent, customers, investors, and regulators through corporate sustainability strategy. From his career in business consulting and executive leadership, David brings to SR Inc over 25 years of experience in building professional services and technology-driven businesses serving a broad range of client industries. David graduated from Dartmouth College where his studies concentrated in Economics and Geology. He received numerous academic honors highlighted by a citation in mathematics from the then college President John G. Kemeny. After IT systems experiences at Arthur Anderson (now Accenture) and Wang Labs, David graduated from Northwestern’s Kellogg Graduate School of Management with honors, a member of the Beta Gamma Sigma Honor Society and in the top 3% of his class.

After receiving his MBA, David cut his teeth at Bain & Company in their Boston office and then progressed up to Managing Partner at Booz, Allen & Hamilton (BAH) where he was ultimately elected by his Partners to head their Australasian business. After helping to grow that business from a very early stage to a staff of more than 100, David returned to the US to head BAH’s Retail Financial Services practice in North America. After a few years back in the US market, David transitioned out of his highly successful consulting career and served as Managing Partner / EVP at two innovative business service companies: the first a 150 employee, VC-backed innovative technology services provider in Boston, and the second a high-end, 200+ employee proprietary marketing services provider located in Princeton and New York. In both companies, David led over 200% growth within 2-3 years while substantially building the companies’ delivery teams and capabilities.

IoT Enabling the Move from Cost Management to Sustainable Value Creation

January 20th, 2017

Under the theme of “Regenerative Operations by 2030,” Sustainability Roundtable, Inc’s (SR Inc’s) Summit for Sustainable Operations V – held in December in DC  – focused on helping Member Executives move corporate operations and real estate from cost center management to sustainable value center creation advancing  C-Suite priorities (e.g. talent engagement, business process redesign). One inflecting change that enables this change in the role of operations and real estate is deployment of the Internet of Things (IoT), which provides improving insights into utilization, collaboration and productivity.    Through-out the Summit it became clear that the unprecedented ability to capture, manage, analyze and act on data enabled by the automatically interacting and adapting systems of the IoT is beginning to transform Member Executives perception of the possible; and, specifically, how they can move from a focus on managing costs within a building-centered framework to leading people in a software defined framework towards sustainable value creation in an increasingly transparent, global and resourced constraints world.

SR Inc’s Senior Consulting Advisor & COO, David Osborn, kicked off the session on IoT with a number of recommendations for real estate and operating executives to consider with regard to IoT deployment, as drawn from SR Inc’s ongoing work with Member-Clients who have experience sourcing and deploying IoT solutions. David’s priority guidance based upon best practices from SR Inc’s leading Member-Clients follows:

  1. Despite all the supply-side hype, IoT deployment opportunity is in fact not about “Whether”, but about “Where (First)”, “How” and “When”
  2. Use a people-centric approach and engage the workforce from an early stage – as you deploy, they will add value on how to impact the “$300/SF” in $3/SF – $30/SF – $300/SF (i.e. utilities, rent and talent respectively)
  3. Plan first for portfolio-wide visibility (leased and owned), but be selective on deploying deeper integration (control) where operational value can be captured
  4. Best practice is blueprinting a scalable “work smarter” approach with savings first from budget and progressing to earning strategy re-investment…
  5. …and while quick impact is likely necessary, plan for capturing the majority of opportunities over years – you likely need to get going now to be competitive in ~3 years
  6. While achieving “cost of occupancy” savings is job #1 today, the bigger opportunity is an approach that comprehends and targets workforce productivity
  7. Security is tantamount and solvable, but do not assume that providers have this covered or can meet your standards
  8. Pinpoint precisely what CRE executives need to know in 2017 to best manage this high potential enabling strategy

Ali Ahmed, Founder, Green Strategies LLC (former Global Energy & Sustainability Lead at Cisco)

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Ali Ahmed, Founder & Principle of Green Strategies LLC, which has partnered with SR Inc to assist Member-Clients

Following David’s introduction, Ali Ahmed – whom SR Inc served during his six years as Senior Manager of Global Energy Management and Sustainability at Cisco and who now partners with SR Inc through his Green Strategies LLC to assist Member-Clients – provided an overview of the current state for IoT in CRE and the opportunities it can provide to companies. Ali pointed out that the hurdles companies have historically faced in IoT are systematically being overcome, as technology and security systems become increasingly sophisticated while prices drop rapidly, meaning IoT installations are becoming increasingly decoupled from major building renovations. Ali reflected on the fact that, in the war for talent among leading global companies, IoT can enable companies to create agile work environments and connect with their employees through addressing safety and wellness concerns as soon as they arise, helping boost employee satisfaction and productivity. Still, Ali advised that, as increasingly more data becomes available, it is important to stay open to serendipity and the possibility for unexpected data sets to correlate while still being able to distinguish real and useful data trends from “noise.” Further, Ali stressed that security and privacy concerns remain of the utmost importance when evaluating potential solutions.

Amy Aves

Amy Aves, Senior Director of Global Real Estate Operations, Oracle

Amy Aves, Senior Director of Global Real Estate Operations, Oracle

Amy Aves, Senior Director of Global Real Estate Operations at SBER Charter Member Oracle, followed Ali’s remarks with an overview of the challenges Oracle has faced in implementing IoT solutions for its real estate and operations. Amy’s experience at Oracle corroborated Ali’s point regarding security concerns of IoT-enabled workplaces. With extremely strict security protocols, Oracle currently has approximately 60 projects in the pipeline awaiting security review and outsources technology solutions as little as possible. Amy is helping lead Oracle in leveraging the success of IoT deployment at its headquarters to install similar solutions at other owned sites (~40% of Oracle’s total square footage). Amy’s team is also driving efforts to track each new device that is installed as an asset so that there is a comprehensive inventory of all connected devices enterprise-wide. The rapid rate at which Oracle acquires companies proves to be a key challenge to its strict security protocols, as acquisitions typically have looser security standards than Oracle, and the security team is tasked with doing a lengthy security review of all these solutions as they are brought into the portfolio or replaced with an Oracle-approved (or in-house) solution. Amy concluded that Oracle recognizes the need for a portfolio-wide strategy to fully capture the sustainability benefits of total IoT integration and effectively avoid security risks.

Clayton Mitchell, Executive Director, Facilities Management, Kaiser Permanente

claytonmitchell

Clayton Mitchell, Executive Director, Facilities Management, Kaiser Permanente

Clayton Mitchell, an Executive Director at SBER Charter Member Kaiser Permanente, wrapped-up the session by discussing how he and his team helped successfully create and scale a program for IoT deployment. This successful program was founded on achieving savings first and “earning” the right for re-investment from the CFO. This approach was highlighted when Mitch rejected an initial offer of $3 million in up-front capital for energy efficiency projects from the CFO. He did this by first acknowledging that the CO region, which he oversaw, had significant troubles with alignment and resource allocation, but that a Building Automation System was in place, helping to form the beginnings of a vision for the region. Clayton and team identified five strategic imperatives to align relevant parties and priorities before spending any capital:

  1. Resource allocation (capital versus maintenance)
  2. Workforce development: focus on the kind of talent needed: best decisions on sustainability and efficiency come from the facility manager level – important to consider how the tool can help the person actually doing the work to take the site to the next level of success and productivity
  3. Sustainability: consider and weight its importance to continuity of operations, community benefit (an imperative in new client/prospect introductions
  4. Big data: gain portfolio-wide data visibility followed by targeted ROI-based investments in deeper systems integration
  5. Space/asset management: better leverage the existing real estate to improve staff experience while reducing costs (Kaiser has significantly improved space utilization through its alternative workplace program that leverages flexible workplaces to be more collaborative while integrating WELL standards to create healthier environments

As the CO region approached company and industry-best practice performance levels across virtually all facility metrics, Mitch is now leading his team in implementing similar best practices across the Mid-Atlantic region and California to the significant financial and sustainability benefit of the company.

SR Inc looks forward to continuing working with Member-Clients in 2017 to deepen the business case for a connected, sustainably healthy workplace that can help industry leaders and laggards alike make important strides towards low-impact, no-impact and ultimately regenerative portfolios in the coming decade.

The slides from the Summit for Sustainable Operations V can be found on SR Inc’s Digital Library here. Additional select relevant Executive Guidance from our Digital Library can be found below.

Select Relevant SBER Executive Guidance & Tools:

Advisories:

Briefings:

Presentations:

Reports:

 

kwall_linkedin_pic-1 (2)As a Senior Manager of Research & Consulting at SR Inc, Kelsey Wallace supports research, development and implementation of enterprise sustainability strategies for companies that recognize the business imperative of more sustainable operations in the face of climate change and an increasingly resource-constrained world. Prior to joining Sustainability Roundtable, Inc., Kelsey worked for an environmental/engineering consulting firm where she supported clients including  the U.S. Environmental Protection Agency and the U.S. Green Buildings Council to promote sustainable buildings, clean energy, and safe drinking water. Kelsey also devoted a year to national service with the AmeriCorps National Civilian Community Corps, where she worked on team-based conservation and community development projects throughout the Southwest United States. Kelsey has her B.A. in Environmental Studies from Connecticut College.