The City of Cambridge, Massachusetts announced it will enter the nation’s largest-ever municipal virtual power purchase agreement (VPPA), committing to purchase the renewable energy credits (RECs) associated with a solar facility in Champaign County, Illinois.
Virtual Power Purchase Agreements are financial agreements that enable businesses and organizations to buy RECs associated with a specific project that is not necessarily on the same regional grid, without having to arrange physical delivery of generated electricity from the site.
Under a VPPA, the project owner, in this case MN8 Energy, liquidates the energy at market pricing and passes the revenue through to the offtaker, which in this case is the City of Cambridge.
MN8 Energy has approximately 4 GW of operational and under-construction solar projects, and 1.1 GWh of battery energy storage capacity from over 875 projects across 28 states.
The City committed to a VPPA for 50 MW of the 135 MW Prairie Solar project. The city’s portion of the project is expected to generate 113,000 MWh of clean energy annually, enough to cover the average electricity consumption of more than 25,000 Cambridge households.
The project is expected to create 300 construction jobs and is scheduled to reach commercial operations before 2026.
Boston-based Sustainability Roundtable, Inc. facilitated the City of Cambridge’s transaction through their Net Zero Consortium for Buyers.
The project is located on the MISO grid, where only 32% of energy comes from low-carbon sources. MN8 said the project will deliver approximately 2.6 times the emissions reductions compared to the equivalent solar generation in Massachusetts. Based on 2022 EPA data, Cambridge’s 50 MWac portion alone is expected to avoid 70,510 metric tons of CO2 emissions annually by displacing fossil fuel generation.
MN8 Energy said the VPPA approach is an attractive option for companies and organizations that are either without the infrastructure or regulatory framework to handle direct physical procurement of clean energy, without available projects to procure from on their local grid, or that do not have large enough aggregated demand to make a physical PPA feasible.
“The Prairie Solar project represents the type of project that drives the clean energy transition forward,” said Alberto Fernandez, Head of Construction at MN8 Energy. “Through close collaboration with local stakeholders in Champaign County and innovative partnerships like our agreement with Cambridge, we’re demonstrating how large-scale solar can provide lasting economic benefits to host communities while helping municipalities across the country achieve their sustainability goals.”
