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Michigan State UniversityMichigan State UniversityInfrastructure Planning and Facilities

Goal One - Improve the physical environment

The committee recognizes that MSU cannot move to 100% renewable energy overnight. At this time, MSU cannot feasibly and reliably buy and/or generate 100% renewable energy from current sources. For example, solar energy technology has been used on campus, but according to the Black and Veatch report on next generation energy technologies, covering all of MSU’s roofs with solar panels would only generate 11-13% of the electricity needed. The anaerobic digester accounts for 0.5 MW of the 61.4 MW of campus electrical demand.

Until MSU can build or purchase its steam and electrical needs from renewable resources, certain “bridge” technologies will be used. When selecting both supply and demand side technologies while moving toward clean energy, MSU will select technologies that also decrease campus emissions, thus reducing negative impacts on to the environment and on human health.

The committee believes that the targets outlined in this goal can be achieved with the knowledge available today. It is conceivable that as technology changes, the university will accelerate its progress. What we know today and what we may know in five years could be drastically different in terms of available research and technology as well as state and federal regulations.

A simple graphic depicting that over time, campus emissions will decrease, and use of renewable energy will increase – MSU’s goal for powering the future.
Powering the future: Incorproating renewable energy while reducing emissions.

The targets for renewable energy increases and greenhouse gas (GHG) reductions are set in five-year increments beginning in fiscal year (FY) 2015. The goals reflect progress compared to a FY 2010 baseline. The target for renewable energy is larger in FY 2030 (15% versus 5% in previous years) because there is potential opportunity at the end of power plant equipment life to switch out to more renewable energies.

These targets are set based on consideration of projected campus growth and energy needs, and a number of alternatives in terms of available and emerging technologies, cost effectiveness, reliability and implications for MSU’s cost structure. The targets maintain a reliable energy system, meet capacity and push out the need for additional capacity beyond 2050, and reduce emissions that negatively impact health and the environment.

Chart depicting recommended campus renewable energy and emissions targets through the year 2030. For 2015, renewable energy should make up 15% of energy, and emissions should be reduced by 30%. For 2020, renewables make up 20% and emissions are reduced by 45%. For 2025, renewables make up 25% and emissions are reduced by 55%. For 2030, renewables make up 40% and emissions are reduced by 65%.
Recommended campus renewable energy and greenhouse gas emission targets thorugh FY 2030.

The committee evaluated several scenarios to develop the targets. The tables below shows three examples of different scenarios evaluated with the Integrated Energy Planning Model. Key input areas such as space management, energy conservation and efficiency, fuel switching, and renewable energy options are shown. Required capital, cost of utility services (CUS), GHG reduction and capacity are performance indicators.

Inputs

Space Management Energy Conservation and Efficiency (retro-commissioning, conservation measures) Fuel Switching Rewnewable energy (biomass, green energy, renewable generation)
Base Case (BAU) 2 million square feet per decade growth
Scenario A 1.5 million square feet per decade growth $10 million invested in 2012, 2015, 2018 100% NG in boiler 3, 10% in boilers 1, 2 30% biomass in boiler 4, 10MW off peak green power purchased
Scenario B 1.5 million square feet per decade growth $10 million invested in 2012, 201, 2018 Max NG switch, 100% in boilers 1,2,3, 46% in boiler 4
Scenario C 1.5 million square feet per decade growth $10 million invested in 2012, 2015, 2018 All new construction is powered with geothermal energy building integrated solar panels

Performance Indicators

Required Capital (in millions) CUS in 2030 (in millions GHG reduction by 2030 Capacity Tipping Points
Base Case (BAU) $108.1 $86 2% Steam 2018 Electricity 2039
Scenario A $94.8 $65.7 53% Beyond 2050 for steam and electricity
Scenario B $94.8 $72.9 36% Beyond 2050 for steam and electricity
Scenario C $177 $62.8 40% Beyond 2050 for steam, 2048 for electricity

Examples of potential energy transition strategies and scenarios. Scenarios relate space management, energy conservation, fuel switching, and renewable energy to performance indicators such as GHG reductions and capacity tipping points for steam and electricity generation. Scenarios determine that the GHG and renewable energy targets are aggressive and achievable.

The committee discovered that while different strategy combinations can get the university to its targets and move toward the vision of 100% renewable energy, there is no perfect scenario – each has a set of trade-offs. Thus, the committee recommended a combination of strategies that balance the five key variables (reliability, capacity, environment, health, and cost) while reaching the goal of 100% renewable energy in the most prudent and efficient way.

In the following scenarios, A, B, and C are shown in comparison to the base case to show the impacts and trade-offs of key variables. The targets were set after examining these trade-offs and considering what the university could reasonably achieve while balancing cost, capacity, reliability, health and environment.

Required capital

The required capital becomes an important consideration for the financial health of the university. MSU’s long term Moody’s credit rating is Aa1. If the university uses significant debt to finance capital projects, it can lower its credit rating and increase the cost of borrowing money. It can also impact its ability to use debt to finance other, non-energy related projects.

Line graph showing the required capital needed to meet requirements for each scenario for the years 2010 to 2050, depicting that scenarios A and B require the same amount of capital, and less than the base case. Scenario C requires more capital.
The black line indicates the business as usual case. Scenario A and B require the same capital and thus the lines are on top of each other.

In this example, scenario C is the most aggressive in incorporating renewable energy to MSU’s energy infrastructure; however the required capital is high and exceeds the debt capacity of MSU’s Aa1 rating. Scenario A adds less renewable energy to the campus, but stays under the debt capacity limit.

Cost of utility services

Cost of utility services (CUS) refers to the set of expenses required to provide energy to the campus. They include operating costs and debt service from capital investments. Because the committee is not recommending precise, everyday operational decisions, the cost of utility services can range.

Line graph depicting the cost of utility services (including capital costs, operation and maintenance costs, delivered fuel expenses, and avoided costs) for the year 2010 through the year 2050. It shows that each of the scenarios A, B and C would have lower utility costs than the base case, with scenario C being the lowest.
Cost of utility services includes capital costs, operation and maintenance costs (which includes disposal costs), delivered fuel expenses, and avoided costs. 

From the examples in scenario A, B and C it is clear that conservation paired with supply side strategies reduces the cost of utility services from the business-as-usual scenario.

Based on the model, an investment of $30 million to $40 million in energy conservation measures over the next 10 years as well as increased investments per square foot of new construction to meet more stringent energy related building standards will be required in order to meet the targets. By the time they are fully implemented, these investments should yield approximately a 15% to 25% reduction in the average annual costs of utilities relative to the business-as-usual case. This funding then should be re-invested into other energy-related activities such as implementing additional conservation measures, funding the increase in fuel costs from fuel switching and adding renewable energy to campus.

Reliability

The power plant currently has a reliability standard such that it can continue to operate when the largest unit is out of service. The scenarios outlined above maintain the same level of reliability. As more renewable energy is incorporated, there must be solutions to maintaining an adequate level of reliability for critical university functions. Some renewable technologies, such as wind energy and solar power, are dependent on factors that are not completely predictable. As such, development of energy storage technologies will be critical in incorporating these types of renewables into the campus portfolio as primary power sources. Otherwise renewable resources need to be backed up by grid power purchases. However, other options such as anaerobic digestion, converting waste and food to biogas, could be expanded to provide reliable, renewable energy.

GHG Reduction

The largest contributor to GHGs and other air emissions is the combustion of fossil fuels. Therefore, GHG emissions and other air emissions that impact health (NOx, SOx, and particulate matter) are closely correlated. GHG emissions data was used as a measure of environmental impact and public health impact.

Line graph depicting GHG emissions in metric tons of Carbon Dioxide, showing that the base case and scenario C reduce emissions over time, but scenarios A and B reduce emissions sharply through 2015 and sustain the lower levels of GHGs through 2050.
This graph shows GHG emissions in terms of metric tons of carbon dioxide equivalents (MTCO2e). The black line represents the BAU case. The sharp decline in the reference case represents the assumption that when boilers reach the end of their useful life, they are replaced with natural gas turbines. Scenario C and the reference case reduce greenhouse gas emissions over time, but scenarios A and B reduce emissions sharply through 2015 and sustain lower greenhouse gas emissions through the planning horizon. By 2030, scenario A reduces greenhouse gas emissions by 53%, a greater reduction than the other scenarios.

These scenarios show that it is possible to achieve significant GHG reductions as early as 2015. The most significant reduction occurs when a combination of supply side strategies is combined with conservation strategies. Reducing GHGs reduce the negative environmental and health impacts of the energy system.

In addition, action now positions MSU to avoid significant costs and risks expected under possible future regulatory and legislative scenarios designed to place a price on greenhouse gas emissions or the use of fossil fuels for the production of energy. Projecting out through 2050, the Integrated Energy Planning Model shows MSU could potentially save an estimated $200 million to $250 million in potential costs levied on greenhouse gas emissions due to reduced financial exposure. Inaction now could lead to a high financial risk to the institution later. The Energy Transition Plan moves to renewable energy and significantly reduces GHG emissions, mitigating financial risk for the university.

Capacity

Assuming a growth rate of 2 million square feet per decade, it is expected that MSU will hit its firm capacity for steam in 2018 and electricity in 2039. If the university continues business as usual, MSU would need to find means to provide additional power to the campus. This type of expansion could cost $100 million or more based on figures from the last power plant expansion.

Two separate line graphs, one depicting the firm capacity (or the point at which additional steam or electricity would be needed) for steam and one depicting the firm capacity for electricity as compared to each of the proposed transition scenarios. It shows that each scenario A, B and C would push the firm capacity beyond 2050.
In the steam and electrical capacity graphs, the dotted line represents the firm capacity, or the point in which additional steam or electricity will be needed.  Scenario A (red) and B (blue) perform similarly, thus the lines overlap in the graphs.

The strategies in scenarios A, B, and C would push the firm capacity tipping points for steam beyond 2050, thus delaying the need for an expensive plant expansion using current technologies. This does not necessarily mean that the university should wait until 2050 to invest in power generation technologies, but it does allow the university the opportunity to invest in energy conservation and allow more time to consider emerging power generation technologies.

After analyzing several scenarios, it was clear that there is no magic bullet. Each decision had a set of trade-offs. However the optimal scenarios used combinations of strategies to reduce greenhouse gas emissions and add renewable energy infrastructure in a cost effective manner. As a result, the committee recommends that the university pursue a combination of strategies prioritized by the hierarchy below.

Prioritizing strategies this way maximizes GHG emissions reductions and costs savings while allowing the university to add renewable energy infrastructure.

Recommended Strategies