Distributed Power Generation at State Facilities: Economic Analysis of Savings and Carbon Credits

States own numerous dispersed facilities, many in remote locations. These facilities could be potential locations for renewable energy generation systems, using the power to offset the electricity use at the locations with excess being sold back to the utilities, i.e. the grid. In efforts to initiate renewable energy generation at state facilities, the State of Missouri undertook a study to erect a combined photovoltaic (PV) array and wind turbine renewable energy project at a highway patrol facility. In this study, a new rapid site evaluation for wind power potential was undertaken. The annual energy generation was estimated to be 22,800 kilowatt hours (kWh) (12 month x 1,900 kWh/month). The PV/wind turbine system installed and operational in under five months from project initiation. Based upon electricity offsets alone, an economic analysis estimated that the wind turbine part of the project would have a payback period of 18 – 25 years. When considering the Carbon Credits (CC) that could be generated, the payback period was reduced. Carbon Credits are largely an unknown and misunderstood commodity. The current trading price of $3 to $4 per CC equivalent is expected to increase to around $12 in the short term, and within the payback period of this project, carbon credits are anticipated to reach $20–30. Carbon Credit finance is still largely an untested market for entities such as a state, and the economics covered in this talk are not easily attained on small projects. This talk will discuss how agglomeration of the small projects could lead to marketing of these credits to help the economic analysis of the individual projects.