Energy Strategy Reduces Emissions and Price Volatility
 

Having previously entered a long-term electricity supply contract with NextEra Energy Services, Baylor University began exploring other procurement strategies that emphasized carbon emission reduction and energy price stability. The Texas-based university, advised by Amerex Energy Services, had already fulfilled various sustainability-related commitments and was interested in integrating renewable energy into its broader initiatives.

Challenge

Baylor University wanted to continue its commitment to sustainability by seeking to integrate renewable energy into its energy strategy. However, this endeavor had to be approached without jeopardizing its ability to fulfill daily electricity demands on campus or exceeding its allocated energy budget. As a result, the University recognized the importance of identifying a solution that was both flexible and low risk, while simultaneously ensuring budget stability and yielding long-term benefits. 

Solution

After assessing the University’s energy needs and goals, NextEra Energy Services recommended a 10-year SupplyIQ® managed energy hedging contract paired with a 10-year RenewableLink® Premier contract for 10 megawatts (MW) peak capacity from NextEra Energy Resources’ Waco Solar project. The combination of both contracts will provide the University with the flexibility to manage energy procurement over time, which includes taking advantage of market dips, as well as integrating future renewables into the procurement plan as needed. 

As a SupplyIQ customer, the University will get the flexibility to augment its energy strategy over time with renewables and other energy initiatives, while also having the freedom to take advantage of future buying opportunities. Managed hedging allows the University to lock in varying blocks of energy at different times over multiple years. This forward-looking approach, allows Baylor to build into a fixed price with a more certain budget.

The RenewableLink Premier contract will supply the University with renewable energy credits (RECs) through a unique energy supply contract, avoiding the complexities of a traditional power purchase agreement (PPA). Beyond offsetting a substantial portion of the University’s emissions, this agreement will allow Baylor to claim additionality since the RECs are project-specific from a new-build renewable asset.

Result

NextEra Energy Services’ flexible and low risk SupplyIQ and RenewableLink contracts will help Baylor University integrate renewable energy into its energy strategy, without compromising its ability to meet campus energy consumption needs. By hedging against market volatility over time and optimizing energy savings, this agreement will also promote budget stability and the potential for long-term cost savings benefits. By agreeing to offset 10 MW, or approximately 19% of its deregulated energy usage in Texas, Baylor University will provide essential support for bringing new solar power to Texas from 2025 onwards, signaling its commitment to carbon reduction and investment in the community.