Why Intel, NRG and Prologis believe in onsite clean energy

Why Intel, NRG and Prologis believe in onsite clean energy

Intel has staged two of the biggest private solar parking lot installations in the United States. This one, in Chandler, Arizona, includes more than 30,000 panels. 

Every month, at least one massive company announces an equally massive power purchase agreement that enables it to source at least a portion of its electricity from renewable energy resources such as solar and wind. Among the latest to trumpet that achievement: the biggest U.S. bank, JPMorgan Chase, which locked in a 20-year contract for a 100-megawatt wind farm in Texas as part of its new 100 percent renewable energy (by 2020) pledge.

But long before PPAs became the strategy-du-jour for expanding corporate clean power portfolios, investments in on-site renewables — ranging from rooftop solar to fuel cells to small wind turbines — were the "thing" for companies seeking to reduce their dependence on coal-generated electricity.

Actually, these installations are still very much a thing, despite the very real challenges associated with making them happen such as dicey relationships with building owners, the age and structure of office buildings or warehouses and (of course) the money needed to make them happen.

Consider that retailer Target is aiming to install solar photovoltaic technology on 500 buildings by 2020 — it currently ranks as the leading non-residential user of onsite solar, with roughly 300 installations by the end of 2016, according to an ongoing tally kept by the Solar Energy Industry Association. (Rival Walmart is No. 2, but only slightly, followed by real estate investment trust Prologis, which has made solar energy part of its long-term development strategy.)

According to the SEIA metrics, through the third quarter of 2016, American companies had invested in more than 1 gigawatt of onsite solar (and that doesn’t count other generating sources). The impact of those installation amounts to a reduction of about 1 million metric tons of carbon dioxide emissions. Many projects considered in this data set are not net-metered, meaning that they’re meant mostly for self-consumption.

And, despite the very real uncertainty over state- and federal-level incentives and policies that will affect the financial risk associated with these capital expenditures, SEIA noted that there is still plenty of low-hanging fruit. Walmart, for example, has gone solar on just 7 percent of its 5,000-plus facilities, and the penetration rate for supermarket chain Albertson’s hovers at about 2 percent of its 2,000-plus stores and distribution centers.

What’s ahead for onsite installations? In preparation for an upcoming session at VERGE 17, I spoke with three very different companies that are being creative about their strategies. Here are three of my takeaways from those conversations.

In emerging markets, it’s often greener than the alternative 

When it comes to actual buyers of on-site solar, tech giant Intel doesn’t make the Top 10 list (at least as calculated by the SEIA) but it is a tough act to follow when it comes to pushing the limits of what’s possible. After all, back in 2015, Intel said it planned to triple its onsite renewable projects by 2020.  

It’s no coincidence, for example, that the company is behind the two largest privately owned solar carports in the United States. Its latest one came online in early May in Chandler, Arizona. It covers 3,200 parking spots with 30,000 panels that have a generating capacity of 7.7 megawatts annually.

"Like all of our projects, every kilowatt-hour is directly connected to our buildings; nothing goes back to the grid," said Marty Sedler, director of global utilities and infrastructure at Intel. The investment is estimated at $20 million.

The company has completed more than 60 projects since 2010, and 20 more are still in the works. It isn’t U.S.-biased with its site selection, as the completed projects span 12 states and countries. Intel is experimenting with at least 14 generating approaches — from solar to small wind to fuel cells that aren’t necessarily "clean" but that might be a lot cleaner than the local alternative.

An example of the latter situation comes from India, where Sedler said the company has installed a 2.5-MW fuel cell that handles more than half the load of the building where it’s situated. The fuel for this technology is natural gas, which beats the most common alternatives, diesel-fired generators. Given the instability of the local power supply (outages occur almost every day), it was relatively easy to justify this investment from an economic and sustainability standpoint because the emissions profile is better than that of the local supply. 

"Every company has to look and say, ‘What fits me?’" Sedler said. "Where am I? What’s my balance sheet? And, is my power reliable?"

By the way, that "tripling of installations" target means Intel is shooting to complete more than 100 installations by the 2020 timeframe.

A lease is no excuse

NRG’s new 130,000-square-foot Princeton, New Jersey, headquarters site is both an exercise in corporate resilience and a proof point that a company doesn’t need to own a building in order improve its sustainable operations profile. Planning for it began in the aftermath of Superstorm Sandy, after diesel fuel shortages threw many corporate disaster recovery plans out the window, and the energy company designed it to be replicable at other leased facilities. At least parts of it.

The site's microgrid orchestrates a wide array of energy generating and storage resources including 617 kilowatts of solar capacity distributed across parking-lot and rooftop arrays (the latter is paired with a green roof planted with native grasses); two horizontal wind turbines; a solar thermal system; and a natural gas-fired, combined heat and power plant (complete with a 45-ton absorption chiller). Its backup resources include diesel and gas-powered generators, and 500 kilowatts in energy storage capacity.  

The company studied iconic buildings including the Bullitt Center in Seattle and Yale University's Kroon Hall for ideas of how to come up with a system that could be used as a recipe for other sites, with special consideration to the possibilities of installing technologies of this nature in a leased environment, according to an NRG spokesman.

The idea is to enable NRG to use its own resources when it makes more sense, such as when solar resources are abundant or demand signals from the local grid make it more economical to rely on its own energy generation resources. A massive wall display in the building's naturally lit lobby shows a near real-time view into which resources are carrying most of the building's load.

<p>NRG hopes to replicate elements of the microgrid design at its Princeton headquarters, which accommodates about 500 employees, in other corporate locations.</p>
The trickiest thing to accommodate turned out to be the company's energy "trading floor," housed in a space characterized by high ceilings and a raised floor (like a data center). Many desks in the open floor plan are crammed with multiple computer monitors; each person has a vent to control the air flow in his or her individual space.

The engineering and planning team who walked me through the project offered three pieces of advice for those planning similar installations:

  • Get a good sense of efficiency metrics for the space before you decide on the capacity of the generating and backup resources. In many cases, NRG found that it needed smaller systems than it originally anticipated.
  • Understand how closely resources can be managed. NRG used two types of inverters for solar arrays. Those in the parking lot can be dialed back as necessary, when not as much power is needed, sort of like a "dimmer switch."
  • Get local officials involved early, in order to iron out potential issues associated with unusual architectural design features. In NRG's case, for example, the municipality needed to evaluate how to classify the open staircase behind its lobby. Was it really an atrium? That required different structural considerations.

[Learn more about onsite renewables at VERGE 17, Sept. 19-21 in Santa Clara, California.]

Stay closely aligned with your real estate strategy team 

As we've reported previously, Prologis — which manages a global portfolio of warehouses and industrial facilities — has been investing in rooftop solar for more than a decade, on its way to a goal of installing 200 MW by 2020. (In its latest sustainability update, the company reported that its current capacity is 165 MW.) 

Matt Singleton, vice president of global energy and development for Prologis, said while the economics of these projects have changed dramatically, the underlying financing mechanisms to help complete them haven't changed much over the past two years. It has used property assessed clean energy (PACE) programs in some places, such as San Francisco, to make its investments. Because its building don’t consume as much power as an official building or retail space, it also can sell more power back to the grid than other organizations making onsite investments.

As it approaches that 2020 mile marker, the company is studying the role that energy storage might play in future installations, although Singleton didn't have any specific developments to discuss.

"The point is to keep the goals evolving in a way that aligns with the way that the business is trending," he said.