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A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP REPORT 151 TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2016 www.TRB.org Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation â¢ Energy â¢ Finance Developing a Business Case for Renewable Energy at Airports Stephen B. Barrett Philip M. DeVita HMMH Burlington, MA Julie E. Kenfield Bradley T. Jacobsen Jacobsen/Daniels associates Ypsilanti, MI and David Y. Bannard Foley & larDner llP Boston, MA
AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and interna- tional commerce. They are where the nationâs aviation system connects with other modes of transportation and where federal responsibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Cooperative Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agen- cies and not being adequately addressed by existing federal research programs. ACRP is modeled after the successful National Cooperative Highway Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activi- ties in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100â Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Associa- tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sciences formally initiating the program. ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organi- zations. Each of these participants has different interests and responsibili- ties, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing coop- erative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP REPORT 151 Project A02-56 ISSN 1935-9802 ISBN 978-0-309-37504-7 Library of Congress Control Number 2016932850 Â© 2016 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report. Published reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America
The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Ralph J. Cicerone is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Boardâs varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.
C O O P E R A T I V E R E S E A R C H P R O G R A M S AUTHOR ACKNOWLEDGMENTS Stephen B. Barrett, Director of Climate and Energy at HMMH, was Principal Investigator. The other authors of this report are Philip M. DeVita, Director of Air Quality, HMMH; Julie E. Kenfield, Director, and Bradley T. Jacobsen, Managing Partner, Jacobsen/Daniels Associates; and David Y. Bannard, Partner, Foley & Lardner LLP. The authors would also like to thank the following individuals for contributing to the research: Bill Weihl of Facebook; Ronald Zimmerman of Glen Falls Hospital; Jim Martin-Schramm of Luther College; Scott Volberding of Outagamie County Regional Airport; Ajay Babla, Robert Bolton, Iraj Ghaemi, Paul Manasjan, and Keith Wilshetz of San Diego County Regional Airport Authority; Elaine Karnes of Southwest Airlines; Stacey George, Michael Hamilton, Christopher Menge, and Crystale Wozniak of HMMH; and Abe Oommen, Kirkland Ellens, Ernest Huffman, and David Brown of Jacobsen/Daniels Associates. CRP STAFF FOR ACRP REPORT 151 Christopher W. Jenks, Director, Cooperative Research Programs Michael R. Salamone, ACRP Manager Theresia H. Schatz, Senior Program Officer Terri Baker, Senior Program Assistant Eileen P. Delaney, Director of Publications Sreyashi Roy, Editor ACRP PROJECT 02-56 PANEL Field of Environment Hana Rocek, Airport Consulting, Inc., Denver, CO (Chair) Peter Aarons, HNTB Corporation, Los Angeles, CA Michael J. Cheyne, Hartsfield-Jackson Atlanta International Airport, Atlanta, GA Adam Klauber, ICF International, Cambridge, MA Jonathan Rubin, University of Maine, Orono, ME Mary Soderstrum, AVCON, INC., Orlando, FL Rhonda Solomon, FAA Liaison Katherine B. Preston, Airports Council International - North America Liaison
ACRP Report 151: Developing a Business Case for Renewable Energy at Airports is a guidebook to help airports understand renewable energy opportunities. The report includes instruc- tions and tools to evaluate proposed renewable energy projects and their alternatives so that an informed decision that maximizes financial, self-sustainability, environmental, and social benefits can be reached. The report lays out what a business case is, why renewable energy is important, and what a business case for renewable energy looks like. It describes the impor- tance of identifying the project objective and understanding how renewable energy might fit into an airportâs vision. A decision-making matrix is included that contains criteria used to evaluate a renewable energy project with a system for weighting each factor based on an air- portâs particular objectives. The report presents a business case in the context of an airportâs typical master planning and capital improvement planning processes including engagement of key stakeholders. The report provides a model business case that evaluates a solar photo- voltaic facility, a fossil fuel generator, and a fuel cell as options for providing on-site electricity generation to improve an airportâs energy stability and resiliency. It also includes examples of renewable energy business cases from both aviation and non-aviation organizations to high- light lessons learned. A sample request for proposals and a sample power purchase agreement are provided for project implementation. Renewable energy can provide financial and public policy benefits to airports. In current practice, airports are typically presented with opportunities to pursue renewable energy projects based on the availability of grant funding programs or inquiries from private enti- ties. In such circumstances, it may not be possible for airports to engage in a thorough investigation of the alternatives to the proposed projects and reach an informed decision that optimizes financial, self-sustainability, environmental, and social benefits. An effective, objective business case evaluation would assist airports embarking on renewable energy projects to advance future planning that targets economic, environmental, and social goals. Given the range of sustainable measures that can be undertaken, implementation of renew- able energy projects has been limited, although it presents a significant opportunity to lower greenhouse gas emissions. Under ACRP Project 02-56, research was conducted by HMMH in association with Jacobsen/ Daniels Associates and Foley & Lardner LLP. Electronic files for the sample request for proposals and the sample power purchase agreement as well as a decision-making matrix are available on CRP-CD-177, which is bound into this report and also available at www.trb.org. F O R E W O R D By Theresia H. Schatz Staff Officer Transportation Research Board
1 Summary 3 Chapter 1 Introducing a Renewable Energy Business Case 4 1.1 Business Case 5 1.2 Business Case for Sustainability 6 1.3 Basics of Renewable Energy 14 1.4 Business Case for Renewable Energy 18 Chapter 2 Basis of Business Case 18 2.1 Vision Statement 18 2.2 Problem and Solution 20 2.3 Justification and Guiding Principles 21 Chapter 3 Evaluation Criteria and Ranking Methodology 21 3.1 Fatal Flaw Analysis 25 3.2 Evaluation Criteria 29 3.3 Weighting and Ranking System 33 Chapter 4 Integrating Projects with Planning and Decision Making 33 4.1 Master Planning 43 4.2 Capital Improvement Planning 44 4.3 Implementation 46 4.4 Permitting 46 4.5 Construction 47 4.6 Operations 48 Chapter 5 Engaging Internal and External Stakeholders 48 5.1 Internal 52 5.2 External 54 Chapter 6 Reviewing a Model Business Case 54 6.1 Setting up a Business Case 58 6.2 Defining Options 62 6.3 Fatal Flaw Analysis 64 6.4 Evaluation Criteria Analysis 73 6.5 Summary Conclusion and Next Steps 74 Chapter 7 Examples of Business Cases 74 7.1 Facebook 76 7.2 Glen Falls Hospital 77 7.3 Luther College 78 7.4 Outagamie Airport 80 7.5 San Diego Airport 83 7.6 Southwest Airlines C O N T E N T S
84 Chapter 8 Funding a Renewable Energy Project 84 8.1 Airport Funding Options 87 8.2 Private Partner Funding Options 88 8.3 Business Structure 90 References A-1 Appendix A Airport Survey of Renewable Decision Making B-1 Appendix B Sample Request for Proposals C-1 Appendix C Sample Power Purchase Agreement Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.