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Hedging for Colleges & Universities
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Renewable Energy Hedge Fact Sheet
Green–e is an independent consumer protection program that offers certification and verification or renewable energy and greenhouse gas mitigation products like RECs
Member of
Association for the Advancement of Sustainability in Higher Education
New Hampshire Businesses for Social Responsibility
How it Works
Budget and Climate Commitments
Using a Renewable Energy HedgeTM is a great way to stabilize your energy budget while supporting the development of a renewable energy future. Because the hedge is a financial swap agreement and not a power purchase, it does not interfere with current energy purchases at any time. Your customized hedge plan can also include Green-e® certified Renewable Energy Certificates to offset climate emissions and help you become carbon neutral. This is an opportunity to make your Chief Financial Officer and your Sustainability Officer both feel more confident about the future!
How it Works
In a Renewable Energy Hedge, the two parties include a commercial energy user and a renewable energy producer. These two parties agree on a strike price and a duration or term for the agreement. The producer continues to sell power into the usual local electricity spot market. The user continues to buy power from the usual supplier. The energy sales are then analyzed. If the income received by the energy producer is greater than the strike price, the producer pays the user. If the income is less than the strike price, then the user pays the producer. The widely variable cost then becomes stabilized by the strike price. It is a simple and effective tool that creates a win-win-win scenario for both parties and the environment. For larger energy consumers, more than one renewable energy producer can be included.
Some of the benefits include:
- Stabilizes your energy budget for the life of the hedge
- Supports renewable energy development
- Offsets carbon emissions with Green-e® certified renewable energy credits
- No upfront capital costs and no changes to current purchase practices needed
- A detailed analysis of potential savings is available
(download a Hedge Fact Sheet)
Case Study: Southern New Hampshire University, a Green Power Champion
Southern New Hampshire University (SNHU) is a signatory of the American Colleges and Universities Presidents Climate Commitment with a number of sustainable goals. To begin achieving these goals, SNHU entered a Renewable Energy Hedge agreement and began offsetting all carbon emissions while stabilizing their energy costs for 15 years. With conservative estimated energy price increases, their average projected savings are calculated to be $1.2 million annually for electricity and gas. SNHU is also receiving 17,500 Green-e® RECs per year to offset their estimated 11,400 tons of carbon emissions and to use for other projects. In 2008, the US Environmental Protection Agency named SNHU a, "College and University Green Power Challenge Champion."
Download the Letter of Recommendation from SNHU's President
.