How private companies, IOUs help universities reach climate goals & save money 

Published on February 21, 2023 by Kim Riley

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The Ohio State University

Universities increasingly outsource the management of their power/HVAC systems to private companies and investor-owned utilities (IOUs) to help meet their environmental/sustainability goals and to improve cost efficiencies.

With an ambitious goal to become an international pioneer in sustainability, Ohio State University (OSU), for example, in 2017 entered into a 50-year integrated solutions agreement with Ohio State Energy Partners (OSEP) — a public-private partnership between gas and electricity supplier ENGIE North America and investment firm Axium Infrastructure — which is leasing the university’s energy assets.

“Public-private partnerships allow for an alternative funding stream to achieve key initiatives like energy use reduction that can also contribute to a reduction of carbon emissions, while still allowing the university to focus on its core mission of teaching, research, and health care thanks to money going toward the overall endowment,” Brett Garrett, director of energy at OSU’s Facilities Operations and Development, told Daily Energy Insider.

More broadly, Garrett said that such public-private partnerships offer institutions like Ohio State the ability to stay focused on their core business. And so far, it has been a very successful partnership.

“To date, because of the agreement, more than $91 million has been invested in reducing energy consumption by approximately 11 percent,” Garrett said.

The 50-year lease agreement — valued at almost $1.2 billion — is designed to help OSU meet its energy sustainability goals for its 485-building campus in Columbus, Ohio, one of the largest university campuses in the United States.

OSU’s specific sustainability goals are to improve energy efficiency by a minimum of 25 percent within 10 years; achieve carbon neutrality by 2050; nurture the next generation of sustainable energy leaders; and serve as an incubator for sustainable energy innovations.

Toward reaching such goals, the agreement tasks ENGIE (as part of OSEP) with operating the systems that power, heat, and cool OSU. And through its performance guarantees, ENGIE has responsibility for the resiliency and reliability of these systems, including uptime commitments from 99.9 percent for steam to up to 99.996 percent for electricity.

The on-campus Combined Heat and Power Plant (CHP) under construction and slated for completion this fall at Ohio State also will contribute to the university’s sustainability goals. Once completed, the CHP will provide energy to new academic, medical, and research spaces on campus and eventually replace OSU’s 100-year-old, natural-gas-fueled heating facility, the McCracken Power Plant, which cannot efficiently meet the university’s heating demands.

As part of the CHP construction project, there are other ongoing climate-related upgrades that are needed, including the chilled water system, which is being modernized via Hellan Strainer Company’s SSI strainer for water filtration, according to Patrick Wadden, vice president of sales and marketing at Hellan Strainer, a global manufacturing company located in Cleveland, Ohio.

Getting in on such university sustainability projects and public-private partnerships offers his company an opportunity for expansion, Wadden told Daily Energy Insider, adding that Hellan Strainer has seen an increase in business from colleges and universities for its strainer systems.

“The Hellan Strainer Company and its engineered products division SSI have been busy with campus expansion projects for a few years now,” he said, noting that the aging of the heating and cooling infrastructure at universities has led to a need for upgrades that will make on-campus facilities and utility systems more energy efficient.

“This is, in part, accomplished with upgrades of the current cooling systems equipment,” said Wadden. “For example, our online cleanable strainers are a great fit for cooling tower water applications in that they can be cycled and cleaned without shutting down the cooling system.”

The university marketplace, Wadden said, has been a good fit for Hellan Strainer, and in the last 15 months, the company has participated in multiple projects at Ohio State. “And that’s just one university,” he said, noting that others like Penn State, Northwestern, Boston College, and Clemson, among many others, are also working to meet their climate goals through similar partnerships.

These partnerships make sense because the priority of a university is to educate students. Its core competencies aren’t running a power plant to generate electricity or chilled water or steam, or to create energy efficiencies,” said Wadden.

That includes IOUs like Duke Energy.

In Indiana, a new, efficient source of power for Duke Energy customers and Purdue University is now operating: the Duke Energy CHP Plant at Purdue is a 16-megawatt natural gas-powered plant on the southern edge of the university’s West Lafayette campus.

Built, owned, and operated by Duke Energy since April 2022, the plant produces electricity for the company’s customers and is a new source of thermal energy in the form of steam for Purdue’s heating and hot water needs. All the power from the system goes to Duke Energy with Purdue University purchasing all the steam produced under a long-term agreement.

“We’re creating a reliable source of steam for Purdue’s power needs and an efficient source of power for our Indiana customers,” said Duke Energy Indiana President Stan Pinegar. “We’ve collaborated with one of our leading customers to add a new, cleaner resource to our generation fleet.”

The collaboration provides a low-cost generation resource for all Duke Indiana customers as the steam payment by Purdue is credited to fuel costs benefiting all of Duke Energy Indiana’s customers. The plant is also expected to improve the stability and reliability of the electric grid serving the Lafayette/West Lafayette area by having a local source of power generation.

Duke Energy spokesperson McKenzie Barbknecht said the project in November 2022 received recognition from the Combined Heat and Power Alliance, which awarded its 2022 CHP Project of the Year Award to the Duke Energy CHP system at Purdue University.

“Using a collaborative approach, Duke Energy and Purdue University developed an innovative CHP project which will lower energy costs, cut carbon emissions, and deliver reliable power and heat for the campus and the local Lafayette community,” said David Gardiner, executive director of the Combined Heat and Power Alliance, in a statement.

In addition, Duke Energy and Purdue University last year announced plans to jointly explore the feasibility of using advanced nuclear energy to meet the campus community’s long-term energy needs, Barbknecht wrote in an email.

Barbknecht pointed out that “Duke Energy works with universities in other states in a similar fashion.”

At Clemson University in South Carolina, for instance, Duke operates a 13.5 MW combined heat and power plant with a new campus substation, retail substation, and an upgraded regional transmission grid providing additional energy services for the campus.

The regulated CHP plant system serves as both a new generation asset for Duke Energy and the primary thermal energy (steam) supply source for the university, Barbknecht wrote.

For its part, Purdue University has called Duke Energy “a dependable partner” that’s been open to innovative ideas and process improvements. The university also said their collaborative relationship has yielded a new plant that moves the university further down the path of carbon reduction while meeting the needs of both partners more efficiently than either could have achieved alone.