Innovative Financing Mechanisms

Identifying alternative sources of funding so projects which require capital funding can move forward...

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Innovative Financing Mechanisms is an Innovation goal in the Cornell Climate Action Plan (CAP).



Explore innovative financing mechanisms, including third-party financing, federal and state grants, and other means to fund demonstration and scale-up projects.

Goal: This is an “enabling” action that will facilitate other priority actions by identifying alternative sources of funding for both capital and operating expenditures. The Energy Team will explore innovative financing mechanisms such as:

  • A systematic way to identify grant opportunities
  • Third-party ownership of solar, wind, and other renewable energy facilities
  • Strategies to support the work of the Green Revolving Loan Fund action team

The University is constrained in obtaining capital funds, and there is no new debt policy. CAP projects that require a capital expenditure cannot obtain funding through conventional debt instruments that have been used to finance projects such as Lake Source Cooling and Combined Heat and Power in the past. This action explores innovative financing strategies to allow projects which require capital funding to move forward.

For priority actions in the CAP, the Energy Team will work to identify funding needs and promising funding streams. Specific strategies to be employed include:
1) Develop a system to monitor NYSERDA, DOE, and other public and private grants, identify promising opportunities, and coordinate a response.
2) Engage the University’s Energy Risk Oversight Committee on actions involving third party ownership and long-term Power Purchase Agreements. The Committee can recommend “hedging” strategies to ensure greater price certainty for renewable fuels.
3) Coordinate with development professionals within the university to identify mutual areas of opportunity.
4) Collaborate with the Johnson School Center for Sustainable Global Enterprise and other academic units to leverage Cornell’s educational and research capacity. For example, in fall 2012, Professor Mark Milstein and students at the Center for Sustainable Global Enterprise created a very accurate financial model of the Cornell Tech Campus energy systems, in order to analyze the economic feasibility of integrating renewable energy. The Energy Team will continue and expand such collaborations.

Next Steps

  • Navigate and resolve issues of ownership of “renewable energy attributes” and other issues that impact the economic viability of renewable energy projects, such as “hedging” strategies and escalation of power prices.
  • Develop a methodology for consideration by the University administration to sell carbon credits through a verified third-party certification process to raise funds for other CAP actions.
  • Implement a system to track and follow through on relevant grant opportunities through NYSERDA, DOE, or other entities.

Resources

The intended outcome of these tasks is to either procure green energy at costs similar to conventional energy, or if the costs are higher, to ensure that green energy is appropriately valued through a process which has been agreed to by the University administration.