FY2003 OSWER Innovation Pilot Results Fact Sheet £EPA Brockton Brightfields: Innovative Green Power The Environmental Protection Agency's Office of Solid Waste and Emergency Response initiated a series of innovative pilot projects to test ideas and strategies for improved environmental and public health results. This series of fact sheets highlights the innovative approaches, results, and environmental and economic benefits from the pilot projects that may be replicated across various sectors, industries, communities, and regions. PROJECT DESCRIPTION/INNOVATION EPA awarded an Innovation grant to the City of Brockton, Massachusetts in 2003 to develop a case study examining the development and financing of long-term renewable-energy projects on brownfields. This case study was innovative in demonstrating to green power developers that it is possible to face the challenge of securing project financing for long-term contracts using renewable energy certificates (RECs). A REC represents the environmental attributes of one MWh (megawatt hour) of generation. A tradable commodity, RECs can be bought and sold separately from electricity itself and represents an additional income stream for the solar array owners. In the past, RECs were short-term and the income received was volatile. This project helped to secure more stable long-term REC contracts. BACKGROUND The Bay State Gas Company owned a manufactured gas plant, Brockton Gas Works, that operated on 27 acres of land from 1898 to 1963. After its closure, the site was deemed a brownfield by EPA due to its limited redevelopment opportunities as a result of contaminants capped below the surface. In August 2004, Bay State Gas Company completed remediation on 27 acres of the brownfield and the 3.7 acre brightfield was completed in August 2006. The term "brightfields" refers to the conversion of contaminated sites into usable land by bringing pollution-free solar energy generation and high-tech solar manufacturing. In this case, photovoltaic arrays were placed on the site to produce solar energy. This approximately $3 million The brightfield was able to secure a 20-year agreement with Constellation New Energy, a regional energy company, for the purchase of RECs and electricity. The city receives about $145,000 in annual revenue, paying for the cost to construct the brightfield, operations and maintenance costs. project was paid for through state and federal grants, a municipal bond and proceeds from a land sale of one of the lots on the property. PROJECT SUMMARY The City of Brockton, in partnership with EPA Region 1, Brockton 21st Century Corporation and XENERGY, developed an innovative marketing concept to secure a long-term contract for the RECs generated by the Brockton Brightfield. A number of green power aggregators and marketers expressed interest in purchasing RECs from the solar Brightfield at a significant premium above and beyond what could be offered by the local market in return for compliance with the state's renewable energy targets. However, many retail electricity suppliers typically indicate a preference for short-term contracts. While monetizing the environmental benefits of various projects has been a long-standing environmental challenge, the innovative financing and growth concepts proposed by this pilot sought to provide an incentive to the market to support long-term contracts for RECs. ------- RESULTS The case study found that long-term contracts for RECs were in demand and the City of Brockton entered into a 20-year agreement with Constellation New Energy to sell RECs at a variable rate of $180 per MWh for five years, and at $180 per MWh for the next 10 years. The company has also agreed to buy electricity generated by the facility at a rate of seven cents per KWh for 10 years and at market value for each of the final years of the contract. The pilot proved that the additional income received from long-term RECs could provide stable financing for brightfield opportunities and thus helped make renewable energy on brownfields a legitimate approach to redevelopment. 2010 UPDATE The City of Brockton has been able to generate nearly $145,000 in annual revenue from the project. Currently, the revenue goes toward paying off the cost to build and maintain the brightfield. In 2026, the loan will be paid off and the city will begin to directly benefit from the sale of RECs and electricity. Since the brightfield went online in September 2006, it has generated nearly 2,300 MWh of renewable energy and avoided 3.8 million pounds of carbon emissions. Lead: The City of Brockton, Massachusetts Sponsor: U.S. EPA Region 1 Other Partners: • Bay State Gas • Brockton 21st Century Corporation • Massachusetts Renewable Energy Trust • KEMA (Previously XENERGY) OSWER Innovation Projects: www.epa.gov/oswer/iwg/pilots Brockton Brightfields Data: http://view2.fatspaniel.net/FST/Portal/GlobalSolarEnergy/ brockton/HostedAdminView.html?&eid=2130 EPA's RE-Powering America's Land: www.epa.gov/renewableenergyland/ EPA's Green Power Partnership Renewable Energy Certificates Web Page: www.epa.gov/greenpower/gpmarket/rec.htm A United States Environmental Protection * m Agency OSWER Innovation Pilot Results Fact Sheet — January 2011 Brockton Brightfields: Innovative Green Power ------- |