Implementing the Climate Action Plan
When implementing climate action plans on research campuses, two important and related questions must be answered. How do we pay for climate actions? And, who will manage and oversee implementation of the plan? The answer to each question will be specific to your campus.
Narrow climate action plans focus on incremental savings through low-cost and voluntary measures. This approach begs the question about what should be done after the short-term, incremental improvements are completed.
In contrast, a portfolio approach can help achieve deep reductions in energy consumption and move toward campus-wide climate neutrality.
Build a Portfolio
After considering a wide array of individual measures, a single portfolio is created for implementation. This approach allows research campuses to combine energy conservation measures that have a good return on investment with measures that feature a lower return. The end result is a combined portfolio that balances financial and time constraints while meeting climate action goals.
There are many considerations for building a portfolio, including:
Compatibility with organizational mission: All climate-neutral measures should support the mission of the research campus. If your research campus has a strong biochemistry mission, implementing biofuels may be an important aspect of your plan.
Community partnerships: Research campuses should strive to be active members of their community. If your campus and its neighboring community share an issue (e.g., congested roadways), it may be worthwhile to move related measures to the top of the implementation plan.
Coincidence development: If new construction is anticipated in the near future, high-performance building standards should be a high priority. New construction projects create opportunities for infrastructure installation and other campus-wide improvements to go climate neutral from the ground up.
Big impact actions: When analyzing a long list of individual measures, the big impact measures typically fall to the bottom because of necessary investment and time commitments. If campuses expect to meet demanding greenhouse gas reduction goals, big impact actions must be worked into the portfolio.
Creating a portfolio before entering the financing stage typically leads to lower transaction costs. Following this methodology allows you to obtain an acceptable cost benefit ratio for the entire group of projects, which might not be possible by tackling smaller, individual measures one at a time
Federal, academic, and business research campuses each have unique opportunities and constraints for financing climate actions.
The following list provides an overview of the financing options currently available to research campuses wanting to fund energy efficiency and renewable energy projects as part of their climate action plans.
Self financing: Self-financing is a viable option for research campuses with sufficient internal funds. Self-financing may be the most cost-effective option for a campus, as it avoids long-term interest and lending costs. Internal financing can also reduce the "cost of waiting", or minimize the loss of energy cost savings while waiting for external funding.
Energy savings performance contracts: Under this type of agreement, an energy service company (ESCO) furnishes the upfront capital for an energy efficiency improvement, in return for payments over the lifetime of the agreement. These return payments are provided by the energy cost savings generated by the project.
Managed utility services contracts: This contract is similar to an energy savings performance contract, but the utility company (instead of an ESCO) delivers the energy services and pays for upgrades in exchange for payments from the campus. Payments are made from the energy cost savings generated by the project.
Power purchase agreements: In this scenario, the research campus finances on-site energy projects with little-to-no upfront capital costs. A developer installs a renewable energy system on campus-owned property under an agreement that the campus will purchase the power generated by the system. The campus pays for the system through its cost-savings over the life of the contract.
Revolving loan funds: A revolving loan fund (RLF) is an interest-bearing (or sometimes interest-free) loan used as capital for projects expected to yield a certain amount of savings. The savings from one project are used to replenish the RLF, which then allows for other similar investments.
State and local incentives are another important source of funding for research campuses and can reduce the cost of energy efficiency and renewable energy projects. Find a list of incentives for your state on the Database of State Incentives for Renewables and Efficiency.
The question of whether to implement the plan or subcontract the work to a third party is an important decision because energy systems are composed of modern, complex, and large-scale technologies. It is essential to understand the strengths and limitations of your institution's capabilities.
The final step in the process is to measure and evaluate progress toward a climate-neutral campus.