Cities100: Washington, D.C. - Wind Power Purchase Saves Money

By entering into a Power Purchase Agreement to buy wind energy at a fixed rate over the next 20 years, Washington, D.C. is lowering its carbon footprint and saving money for taxpayers.

The Challenge

Large-scale wind power is not feasible in Washington, D.C. but, with the use of a PPA, the District is able to directly source wind power and advance the regional market for renewable energy. The PPA also reduces the District’s vulnerability to volatile energy prices by establishing a long-term price for electricity that is fixed for 20 years and cheaper than fossil fuel-based power.

The Solution

In 2015, Washington, D.C. entered into a 20-year Power Purchase Agreement (PPA) with Iberdrola Renewables. Wind power procured under the PPA will supply roughly one-third of the District government’s electricity from a 46 MW wind farm. The deal is the largest of its kind ever entered into by an American city. Under the PPA, the District does not pay for the wind farm itself, but rather, agrees to purchase 125,000 to 150,000 MWh of wind electricity every year at a fixed rate 30% lower than fossil fuel power.

The avoided emissions will reduce government-wide greenhouse gas emis-sions by 17% from 2013 levels, which is the equivalent of growing 24 million trees each year. The PPA is expected to spur additional investment in the local renewable energy market by demonstrating confidence in wind energy as a scalable, long-term solution. The District is also negotiating two solar PPAs that would install 12.5 MW of solar arrays on roughly 50 District buildings, provid-ing another 3% to 5% of the government’s electricity consumption.

Environmental Benefits – Greenhouse gas emission reductions from the PPA are equivalent to taking 20,000 cars off the road.

Social Benefits – The wind farm that the PPA supports has created close to 100 clean energy jobs during construction and supports roughly half-a-dozen permanent positions.

Economic Benefits – The PPA will help stabilize long-term electricity costs and is estimated to save District taxpayers $45 million over the next 20 years through lower electricity rates.

Health Benefits – The majority of the District’s air pollution comes from fossil fuel-fired power plants located outside its borders. The PPA prevents the release of air pollutants such as soot, smog, and mercury that are harmful to human health.

About Cities100

Presented by C40 Cities Climate Leadership Group (C40), Sustainia and Realdania – Cities100 showcases leading solutions to urban climate challenges in ten sectors, ranging from solid waste management to transportation.

Available online and in print, Cities100 provides stakeholders an accessible format to explore achievable solutions for climate action in cities, and will be a useful tool for relevant groups ranging from impact investors and development organizations, to mayors and city governments.  You can access the full Cities100 2015 publication online here.