Silicon Valley Collaborative Renewable Energy Procurement (SV-REP) Project
Our Renewable Energy Procurement Project
The Silicon Valley Collaborative Renewable Energy Procurement (SV-REP) Project was launched by Joint Venture Silicon Valley's Public Sector Climate Task Force, in partnership with the County of Santa Clara, California. Formed in 2007, the Task Force includes representatives from nearly 50 Silicon Valley cities, towns and counties, plus several special districts and other public agencies. The goal of the Task Force is to develop effective, collaborative solutions for the reduction of greenhouse gas emissions from public agency operations and to learn from each other about climate protection programs.
The SV-REP project was created to address three of the major challenges regarding public sector adoption of renewable energy in an era of diminished financial resources, including: high upfront costs associated with the purchase and installation of these technologies, the considerable transaction costs involved in conducting competitive bid processes and developing agreements, and the general lack of understanding of financing options and available incentives. The goal of the SV-REP project was to address these challenges via a regional collaborative effort utilizing a standardized Power Purchase Agreement (PPA) financing model, lease agreements and procurement process.
Although purchasing a renewable energy system outright is generally considered to be the most cost effective strategy in the long-term, the high capital costs are often prohibitive. An alternative method of financing is needed in order to utilize renewable energy and thereby decrease energy costs and aid in the reduction of carbon emissions in compliance with AB32. In the past five years, the financial sector and renewable energy providers have developed innovative third party ownership financing structures (Power Purchase Agreements) to take advantage of the tax incentives available to the private sector. However, these financing structures require significant legal, procurement, property management, and engineering expertise to execute and therefore have high transaction costs that present a barrier to local governments.
In order to support the public sector adoption of renewable energy and reduce transaction costs, Joint Venture and the members of the Public Sector Climate Task Force partnered with the County of Santa Clara, as lead agency, on a regional collaborative procurement. By leveraging the contractual resource investment of the lead agency and creating a procurement pool, all participants benefit by reducing or eliminating barriers to adoption of renewable power.
Through a collaborative and transparent process, the SV-REP addressed the informational barriers and limited resource capacities that are impediments to adoption of renewable energy and non-traditional financing approaches. This method not only conserved funds, but also accelerated the financing process and deployment of renewable energy technologies to achieve climate protection goals while supporting local economic development.
The group embarked on this process to achieve the following regional benefits:
- Conservation of government funds for capital investment.
- Reduced transaction costs through standardized processes, agreements and collaborative procurement.
- Increased Public Sector adoption and installation of renewable energy generation systems throughout Silicon Valley.
- Reduction of greenhouse gas emissions from public agency operations.
- Volume discounts and decreased prices due to robust competition.
- Stimulation of the local economy by using local vendors, creating jobs, and additional business activity.
- Stabilization of electricity costs through the use of Power Purchase Agreements.
- Standardized Power Purchase Agreement and procurement documents.
- Creation of a case study to share with other regions looking to do similar projects through a collaborative process.
Siva Darbhamulla, Chief of Design Services, County of Santa Clara
Ben Foster, Vice President, Optony
Caroline Judy, Assistant Director, Government Support Services, County of Alameda
Jerry Lahr, Power Program Manager, Association of Bay Area Governments
Kara Gross, Vice President, Joint Venture: Silicon Valley Network
Steve Mitra, County Counsel, County of Santa Clara
Lin Ortega, Utilities Engineer/Program Manager, County of Santa Clara
Chris Schroeder, Purchasing Agent, City of Milpitas
Joe Steinberger, Principal Environmental Planner, Bay Area Air Quality Management District
Mary Tucker, Energy Program Manager, City of San Jose
Project Director: Rachel Massaro, Joint Venture Silicon Valley
What's Happening Now?
Phase I of the SV-REP Project is currently the largest multi-agency procurement of renewable energy in the United States. It involves 70 sites at 43 locations, and collaboration across 9 public agencies (County of Santa Clara, cities of Milpitas, Cupertino, Morgan Hill, Pacifica, and Mountain View, Town of Los Gatos, Santa Clara Valley Transportation Authority, and the South Bayside Waste Management Authority). The carport, rooftop, and ground-mounted systems will be located at community centers, city halls, fire stations, police stations, office buildings, senior centers, libraries, clinics, and other publicly-owned facilities. Some examples include South Bayside Waste Management Authority’s new recycling and waste transfer facility in San Carlos, Cupertino’s corporate yard, and the Santa Clara Valley Transportation Authority’s bus depots.
Vendor selection for Phase I was finalized in early September 2010. The selected vendors include SunPower Corporation (for the large system bundle), Borrego Solar (medium system bundle), and EcoPlexus (small combined and small rooftop bundles).
In September 2011, Joint Venture, Alameda County, and the Contra Costa Economic Partnership entered into a partnership to expand upon the success of the SV-REP. Information on the Regional Renewable Energy Procurement Project (R-REP), which is open to all public agencies in Santa Clara, San Mateo, Alameda and Contra Costa Counties, can be found on the R-REP webpage.
Best Practices Guide
Joint Venture has partnered with Optony and the World Resources Institute on a Public/Private Sector Best Practices Guide for collaborative procurement of solar power. The guide is now available for download. Additional information related to the guide is available at www.wri.org/publication/purchasing-power.
The U.S. Environmental Protection Agency Green Power Partnership has already launched an effort based upon the SV-REP model in the metropolitan Washington, D.C. area. More information about this initiative, the Clean Energy Collaborative Procurement, can be found at www.epa.gov/greenpower/collaborative-procurement-initiative.
Additionally, several other regions across the country are looking at the SV-REP model for potential use in 2011.
Documents and Resources
Documents and resources are available to view from the SV-REP, including procurement documents and media coverage.