Virtual PPA: Cambridge, Mass Links Residential Emissions to Illinois Solar Farm
Cambridge, Massachusetts, the home of Harvard University and the Massachusetts Institute of Technology, has announced it will procure 50 MW of clean energy under a virtual power purchase agreement (VPPA) with MN8 Energy. The city says this is the largest VPPA of its kind in the U.S.
Power purchase agreements (PPA) are financial tools that enable cities, companies or utilities to directly or indirectly reap the benefits of clean energy without the upfront costs. With a traditional power purchase agreement, the customer contracts with a developer that pays for, installs and maintains a clean energy project, such as a solar array, on the customer’s property. The developer owns the system but sells the electricity generated to the customer at a fixed, reduced cost.
Virtual PPAs are similar, as the energy buyer doesn’t actually receive the energy as it’s often generated in other parts of the country. In the virtual PPA case, the buyer obtains renewable energy credits (RECs) that can be used to lower its carbon emissions.
As a result, both the customer and the local community where the clean energy is generated and consumed, benefit from reduced emissions.
Renewable power will be generated – and consumed – in Illinois
The Prairie Solar Project in Champaign County, Illinois, will produce the power under the Cambridge VPPA. MN8 Energy owns, and will build and operate the Prairie Solar Project, which was developed by BayWa r.e. Americas.
With an expected 113,000 MWh of clean energy capacity, the average annual power consumption of more than 25,000 homes in Cambridge will be covered and more than 70,500 metric tons of carbon dioxide emissions avoided thanks to the VPPA.
“The City of Cambridge has been a climate leader for many years, and today is a monumental step along this path,” Julie Wormser, chief climate officer at the City of Cambridge, said in a statement. “We’re showing that cities can bring tangible decarbonization and clean energy impacts to their residents through VPPAs. Cambridge benefits by decreasing our carbon footprint, and Illinois residents get cleaner air to breathe.”
Because the carbon intensity of electricity generated in Illinois is higher than in Massachusetts, the VPPA is expected to achieve 2.6 time the emissions reductions for residents of Champaign County.
First VPPA targeting residential building emissions
This is the first time a U.S. city has targeted residential building carbon emissions with a VPPA, according to a statement. The carbon-free energy generated by the Illinois solar farm statistically offsets the emissions in Cambridge.
In 2023, Cambridge amended its Building Energy Use Disclosure Ordinance to require large non-residential buildings achieve net zero emissions by 2035. Mid-size non-residential buildings have until 2050 to comply.
The VPPA was brokered by Sustainability Roundtable through its Net Zero Consortium for Buyers (NZCB), a confidential renewable energy buyers’ community for utility-scale clean energy.
In September, the group announced it had brokered an aggregated VPPA between NZCB and Akamai Technologies, Teradyne and Wayfair. With the procurement from the City of Cambridge, NZCB has reached its goal of driving the generation of 1 GW of renewable energy capacity before 2025.
“The City of Cambridge has been very clear and direct about its mission: combating climate change by procuring RECs from new utility-scale clean energy projects to match its resident’s electricity consumption,” said David Osborn, Sustainability Roundtable’s chief financial officer.
