Farmington Solar Project and RECs
The Farmington Solar Project
The Farmington Solar Project—its official name is the New England College Renewable Partnership (NECRP)—is a consortial solar photovoltaic (PV) development by Amherst, Bowdoin, Hampshire, Smith, Williams colleges in partnership with renewable energy developer NextEra and a local dairy farmer in Farmington, Maine.
The project involves 76.5 MegaWatts (MW) of ground-mounted solar PV generation capacity, a 25 MW share of which the colleges have contracted to offtake for 20 years, including Williams’ share of 8.6 MW (equivalent to 11.33% of the project’s total nameplate capacity).
The project began production in late October 2021 and in the case of Williams College, contributes Renewable Energy Certificates (RECs) for an estimated approximately 73% of our current purchased energy (the FY23 share was actually close to 79% in part due to successful campus energy conservation). A REC reflects the environmental attributes of 1 MegaWatt hour (MWh), specifically that the electricity was generated from clean, renewable energy sources such as solar PV, wind, certain hydroelectric power installations and others (the eligibility criteria vary across states).
With the start of operations of the Farmington Solar Project, Williams has taken a substantial step towards its climate action goals, specifically, sourcing 100% of its purchased electricity from renewable sources and substantially reducing campus emissions, including from electricity consumption. By investing in clean, renewable power generation such as Farmington, additional smaller on-campus solar PV systems, through additional RECs purchases and by benefiting from a growing share of renewables in the grid electricity mix, we have matched our electricity use with renewables since FY21.
How do RECs work?
It is important to understand how RECs work. As a measurable green attribute (1 REC = MWh of clean, renewable energy), they can be severed and sold separately from the electricity itself. As a result, active RECs markets have developed across North America, Europe and other parts of the world where RECs are bought and sold.
A renewable power developer or project owner, for example, can decide whether to hold the RECs themselves and allocate them to their own electricity use, enabling claims of green power use, or to sell them to somebody else, in which case they can no longer claim that their generated electricity is green.
Each REC can only be allocated against electricity use once. Repeated claims would otherwise lead to double, triple, quadruple, etc. counting against electricity emissions and thus undermine honest efforts to actually “green the grid” and mitigate climate change. To avoid such double counting, verifiers and registries for RECs exist, such as NEPOOL GIS for the New England region, who keep track of RECs and serve as validators.
In the case of Williams’ on-campus solar PV systems, we typically only retain the RECs in cases where the associated solar PV system supports a building’s green/sustainability certification requirements (e.g., if the building is net zero energy certified). Either way, the college is helping to increase the amount of electricity that is produced from clean, renewable energy sources, makes solar PV more visible, and allows students to learn about their operation through the data dashboards we maintain.
Another important aspect to consider about RECs is that they refer to 1 MWh of clean, renewable power, not greenhouse gas emissions as a carbon offset does (1 offset = 1 ton of CO2e emissions reduced or avoided). The actual amount of emissions avoided through the generation of a REC depends on multiple factors, including location and time since the grid’s emissions intensity depends on the fuel mix used in the local electricity grid where the project is located at a specific time. See below for more information on how Williams College tries to increase the climate benefits of the Farmington Solar Project.
As part of its climate action goals, Williams will continue to explore and invest in renewable energy for its operations, including on campus solar PV.
REC Arbitrage
The college is taking additional measures to further the Farmington Solar Project’s climate benefits. In an annually reviewed process, the college sells the Farmington RECs and purchases Green-E certified alternative RECs generated in dirtier electric grid regions in the U.S. This process, known as arbitrage, yields revenue that will be used to advance additional climate action at Williams while also helping to displace more carbon-intensive power generation.
How does this work in practice? There are two types of REC’s:
1) The Farmington project qualifies as a generator of New England Class I RECs. These RECs are part of the New England states’ Renewable Portfolio Standards, which aim to systematically decarbonize the electricity sector. As a result, these RECs have a substantial market value.
2) Voluntary REC markets offer buyers a variety of RECs generated across the country by small to large facility owners and operators. Although these are high quality and verified RECs, they typically trade at lower prices because they aren’t governed by renewable energy regulatory programs.
The difference between the two types of RECs presents an arbitrage opportunity for Williams and other holders of Class I RECs. With the overarching goal of increasing the total carbon emissions displaced, Williams is actively replacing our Farmington RECs for voluntary market RECs from facilities located in areas where electricity generation is based on a heavier mix of fossil fuels than that of the New England grid. Doing so signals to renewable energy developers that it’s profitable to invest in these regions and thus reduce their emissions intensity.
In addition, Williams is investing the arbitrage revenue in campus projects that help speed up its own transition to net zero emissions. This could include projects such as projects such as electrifying campus buildings or the campus vehicle fleet; implementing energy efficiency measures; and removing roadblocks to boosting renewable energy generation on campus. This year, the arbitrage process is expected to generate $400,000-$500,000 in revenue to support such projects.
Like the Farmington Solar Project itself, this economic and climate strategy of arbitraging is new for Williams. And while the benefits are compelling, the decision to arbitrage will be reviewed each year since REC prices, regional grid emissions intensities and other factors continue to evolve.
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