A New Power Paradigm For Wastewater Utilities?
By Kevin Westerling,
@KevinOnWater
Renewable energy is great for the environment. Are power purchase agreements great for wastewater treatment operations?
Among the main (and many) challenges facing wastewater treatment utilities are keeping costs down and keeping operations online, while doing so in the most environmentally friendly way possible. One potential consideration to tackle all three is a power purchase agreement (PPA). PPAs are an increasingly popular mechanism for financing and developing renewable energy projects across a range of wellsuited facilities, but wastewater treatment plants are especially ideal candidates. Perhaps most attractive, particularly in terms of feasibility, is that it comes without capital cost for putting the equipment — namely solar panels — in place.
What is a power purchase agreement, or PPA, and what are the benefits compared to traditional power supply?
A power purchase agreement is a contract between an independent power producer and a buyer, like a company or municipality. PPAs make it easier for organizations to adopt clean energy solutions by offering predictable energy costs without the complexity of system ownership or large upfront costs. Beyond design and installation, the energy provider may continue to manage the system throughout the agreement — REC Solar does so for 25 years — so customers can stay focused on their business while getting energy resilience and savings over the long term.
On top of that, pairing renewable energy with storage can reduce reliance on the traditional grid, thereby helping facilities to better manage demand and avoid costly energy peaks. For organizations with aroundthe-clock responsibilities, such as wastewater treatment utilities, it can be a long-term operational strategy that helps them control their costs and improve energy reliability.
What conditions must exist for a wastewater facility to be a good candidate for solar energy in particular?
Wastewater facilities are great candidates for solar when they have available space that can be creatively used for an array like rooftops, land, or parking areas. A supportive policy environment can always help, but with REC Solar’s PPA model, customers don’t actually need to navigate policy themselves. For example, in California specifically, pairing solar with storage is a no-brainer under Net Energy Metering 3.0, formally known as the Net Billing Tariff [governing how solar energy systems interact with the electrical grid]. And for many facilities, the value goes beyond saving money and into meeting sustainability goals, like California’s 2045 target for carbon neutrality or the reduction of Scope 2 emissions [indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat, or cooling].
The environment and community obviously benefit, but can you highlight with an example?
A previous project in California with the Central Contra Costa Sanitary District (Central San) on a 2.16-megawatt (MW) solar array eliminated 1,865 metric tons of carbon dioxide emissions annually, equivalent to removing 444 gasoline-powered vehicles from the roads yearly. By shifting to this financing model, Central San is projected to save nearly $6 million in electricity costs over the system’s lifetime.
What approvals or steps are typically necessary for the municipality to proceed with a PPA?
The process varies from city to city, but because PPAs are $0 down, municipalities typically have an easier time getting budgetary approval than for large capital projects. That said, we do look at current energy data and rates to make sure the process makes financial sense over the span of 20 to 25 years and that the customers see savings. We also want stakeholder engagement and buy-in, which we enjoy in California because we’re based there and have been around for so long. Beyond that, we want to make sure the area is feasible, the interconnection can work, and that we take advantage of net energy metering (NEM) where available. Specific to California, Government Code Section 4217 allows California public agencies, including cities and special districts, to enter into contracts for energy conservation, generation, or purchase without a full formal competitive bidding process, cutting down time and administrative expenses on getting clean energy.
Are there any pitfalls to be aware of to ensure success?
There are a few things to be aware of as a company looking to implement solar into your operations that can get very confusing. First, we recommend working with a consultancy group and with partners who are in business for the long haul because projects run smoother with someone who is familiar with the local policy landscape and procurement processes. Also be aware of growth plans for the site. If you’re moving tanks, growing, or need to do any cleaning or crane operations, you want to make sure those plans are taken into consideration with where panels will be, how much energy you’ll need, and when you’ll need it. Ultimately, solar often makes sense for many organizations with substantial energy loads and available land or rooftop space.