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How Amazon’s Second Headquarters Can Advance the Clean Energy Economy

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Amazon encouraged cities to think boldly about how its second headquarters (HQ2) can enhance and transform their communities. We urge both Amazon and the bidding cities to adopt the same enterprising and transformative mindset regarding HQ2’s role in shaping the future of energy.

Amazon has impressive green credentials. The e-commerce giant is a top corporate purchaser of clean energy and is on its way to being 100 percent renewable. Buildings at its Seattle campus incorporate LED lighting and waste-heat recovery, operating at the forefront of energy efficiency.

Now, by choosing which city will host its coveted HQ2, Amazon is paying close attention to sustainability criteria such as utility incentives for clean energy development and mass transit options for employees.

We encourage Amazon to reward proposals that extend clean energy benefits beyond the borders of HQ2, to enhance sustainability throughout the host city and state. Equally important, we call on the 20 finalist cities to make public all sustainability provisions of their HQ2 proposals.

We understand that cities are keeping certain incentives confidential in order to maintain a competitive edge. However, clean energy commitments should not be treated as private trade secrets, but rather as public best practices to promote and share.

The 19 U.S. cities and regions vying to attract HQ2 demonstrate widely varying degrees of commitment to sustainability in their proposals. For example, Boston touts its top rank in energy efficiency and its Climate Action Plan to achieve carbon neutrality by 2050. For its proposed site at Suffolk Downs, Boston presents a vision that features subway access, rooftop solar panels, geothermal energy and data center waste-heat recovery.

Philadelphia trumpets its abundant mass transit and bike lanes. Its proposed uCity Square site could integrate a combined heat and power plant, and the Navy Yard site already features a nationally recognized electricity micro-grid with on-site solar generation and battery storage. Beyond promoting the Colorado Energy Plan, Denver details its utility’s investment in energy innovation and ability to provide 100 percent renewable energy services.

Other cities’ proposals offer little in the way of clean energy provisions, or have not divulged such elements publicly. For example, Raleigh does not seem to discuss clean energy in its public proposal. New York City highlights its extensive subway system but does not outline specific clean energy plans.

Austin has kept most of its proposal a secret, providing only vague references to sustainability in its public materials. Columbus proposes self-driving electric vehicles for sustainable transportation, but the environmental benefits of this strategy would likely be insignificant because Ohio relies on coal to produce more than half of its electricity.

On Amazon’s end, HQ2 can serve as a catalyst to accelerate citywide and statewide clean energy initiatives, extending well beyond the new campus’s perimeter. Even though HQ2 may add up to 8 million square feet of office space, its energy consumption will be small relative to a large metropolitan area. It would only require a fraction of the power output of a typical coal or natural gas power plant.

One venue where Amazon could maximize its sustainability impact is through securing access to renewable energy. Aside from covering HQ2 rooftops with solar panels, Amazon’s ability to procure renewable power varies with the local electricity market structure. The company has an important choice to make.

Amazon can conveniently locate HQ2 in one of 13 American cities where deregulated power markets allow customers to choose their renewable energy suppliers. Alternatively, if located within a regulated market such as Atlanta, Denver, or Raleigh, Amazon can buy renewable energy from the utility through existing “green tariff” programs. Here, Amazon has the opportunity to join Google and others in using its corporate influence to expand green tariffs statewide, including to residential customers.

Even more ambitiously, Amazon can leverage HQ2 in Indianapolis, Miami, or Nashville to enable renewable energy purchase by all state residents, pressing state energy commissions and utilities to either establish green tariff programs from scratch or allow retail choice.

As Amazon HQ2 promises to bring 21st century jobs to its new host community, we hope that it also brings the 21st century energy ecosystem with it: carbon-free, smart and accessible energy infrastructure, technologies and markets.

Benjamin D. Leibowicz is an assistant professor of operations research and industrial engineering at The University of Texas at Austin. 

Karim Farhat is an energy consultant and a former graduate research fellow at the Steyer-Taylor Center for Energy Policy and Finance at Stanford University. 

Source: University of Texas

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