Cities and other local governments are actively participating in the renewable electricity market. Whether they’re participating for environmental or economic purposes (or both), communities continue to see the benefits of clean electricity and seek opportunities to add more for government operations and more broadly for residents and businesses. Navigating renewable energy procurement can be complex, especially as additional purchasing options become available.
In June, cities from across Minnesota gathered to discuss how they can support their communities in transitioning to clean energy. This discussion was part of an all-day boot camp led by national experts from World Resource Institute and Rocky Mountain Institute and hosted by GPI and the Clean Energy Resources Teams. Throughout the day, participants learned about procurement opportunities and barriers. While most cities will face similar challenges procuring energy, there may be unique barriers depending on what a city pursues and the utility territory in which they are located.
The most important consideration when pursuing renewable energy is to know why you want to increase renewable energy adoption. For instance, many cities seek the economic benefit of participating in solar projects, so they may look for options that will save money over time. Others may have set renewable energy targets requiring them to own the renewable energy credits (RECs) associated with renewable generation, so a green power purchase program might make more sense. Cities that wish to see resilience benefits, local workforce development, or equitable access to clean energy could pursue an on-site, in-boundary renewable development that will best support these benefits. Some of these priorities may have complementary solutions while others have inherently conflicting solutions. When setting renewable energy goals, cities should be clear about the desired outcome so that they can develop a road map to achieve those goals.
For example, if a city sets a specific renewable energy target, it will need to pursue options that include ownership of RECs in order for the city to claim credit for the additional renewable energy on the system. Many procurement options that directly increase renewable energy, like on-site installations or community solar gardens, come with incentives or payment structures where the utility claims the RECs. In these instances, in order to claim renewable credit, cities would need to decide which route is best for their situation. This will limit procurement options to those that include RECs, like purchasing RECs on the market or through a green tariff program that are either in lieu of or complementary to on-site installations or community solar subscriptions. While these options will help the city meet its goal, it will have no impact on local benefits, such as equitable access and workforce development. On the flipside, local installations of clean energy often require selling the renewable attributes (i.e., the RECs) and therefore the ability to claim the renewable energy. However, there will be tremendous opportunity to increase local jobs and expand access to renewable energy.
The following is a summary of different procurement options available to most communities, along with pros and cons in consideration of different goals.
There are several options available to local governments to procure renewable energy and each has its own complexity. While there have been many trailblazers testing these options and helping to drive down costs, cities will still need to decide what option is best for their situation—there is no single right answer.
In an effort to wade through these renewable energy options and help Minnesota cities and counties develop goals and pathways that best fit their priorities, GPI staff, along with the Clean Energy Resource Teams, will facilitate a network of cities over the next eight months. The network will support cities and counties in a peer setting to work toward tangible outcomes that will drive increased adoption of renewable energy deployment in the state.
For more information about this network, contact Abby Finis at [email protected].
More resources and tools are available through the American Cities Climate Challenge Renewable Accelerator: https://cityrenewables.org/tools-resources/