How Hotels Can Take Advantage of Renewable Energy Certificates

For the iconic Palace Hotel in San Francisco, using sustainable practices is about doing the right thing for the environment, but it’s also about a commitment to what is important to guests.

“We attract quite a bit of business from technology companies who will ask about our carbon footprint before they sign a contract with us,” Palace Hotel Chief Engineer Jerry Turner said. “They want to know how much energy they use when they stay with us, and it does play a role in their decision.”

Though it’s San Francisco’s most historic hotel, the Palace management team prides itself on maintaining the modern look and feel of a luxury destination. The hotel is in the early stages of becoming a certified “green” building. That includes using only high-efficiency LED lighting, using EnergyStar-certified equipment and using building automation controls. The hotel is also undergoing substantial efficiency upgrades in its guest rooms.

One of its most important initiatives is purchasing wind renewable energy certificates to match 100 percent of its electricity use through its energy provider, Constellation.

Why Use Renewable Energy?

Renewable energy helps businesses maintain a competitive edge and meet sustainability goals. The use of renewable energy has doubled from 2000 to 2014 and now accounts for about 13 percent of all electricity generated in the United States, according to the U.S. Energy Information Administration.

Not every hotel has the ability to generate renewable energy on site, but all can incorporate renewable energy sources like wind, hydropower and solar into their mix by purchasing Renewable Energy Certificates (RECs).

The Palace Hotel works with Constellation to purchase RECs from sources around the country for 100 percent of its usage. These certificates offset electricity generation from traditional coal-fired sources in a specific region and build a market for renewable energy. The carbon emissions offset by RECs can be substantial. On average, the Palace Hotel uses approximately 36,000 dekatherms of natural gas per year and 11,000 megawatts of electricity.

Offsetting the carbon emissions from that usage is equal to taking nearly 2,000 vehicles off the road each year, according to the U.S. EPA’s Greenhouse Gas Equivalencies calculator.

How Do Renewable Energy Certificates Work?

When power is generated and delivered into the grid, it becomes impossible to determine whether it was created through a renewable or non-renewable resource. Renewable Energy Certificates (also known as Green tags or renewable energy credits) help organizations claim the environmental attributes of power generated by renewable resources.

In other words, they are energy commodities that act as proof that one megawatt hour of electricity was generated from a renewable resource and delivered to the nation’s power grid.

RECs are validated through an independent certification program known as Green-e Energy. This program ensures the companies that sell them meet established consumer protection and environmental standards.

The energy associated with a REC is sold separately. REC attributes involve understanding the fuel source (wind, water, solar), emissions, location and age of a facility and the date on which the megawatt hour associated with the REC was produced.

What Are the Benefits of RECs?

Purchasing RECs is a fast and simple way to demonstrate an organization’s commitment to environmentally responsible practices. Additionally, they enable organizations to make substantiated claims about their effort to reduce greenhouse gas emissions and they support the progression of renewable power plants, which is good for economic development.

How Can Hotels Purchase Them?

Hotel operators or facilities managers should check to see if their energy provider has a Green-e Energy program. In many cases, they can purchase RECs and electricity or RECs alone from any supplier that supports green energy.

Constellation offers two options for purchasing RECs:

• Bundled Electricity and RECs—Customers can incorporate RECs into their electricity contract upfront with a single transaction. This arrangement covers a designated percent of electricity usage for the full term.
• RECs Only—Customers can add renewable energy to their existing plan by matching a percentage of the electricity they purchase with RECs. They can also purchase a fixed quantity of RECs at any time and incorporate them into their existing contract.

Other Solutions for Renewable Energy

For hotels that want to achieve the financial and physical benefits of on-site renewable energy generation, Constellation offers a variety of options to make sustainable power sources more affordable.

Power purchase agreements allow businesses to pay for a solar power project over the term of an electricity contract, avoiding large capital expenses. Constellation is the third largest commercial solar developer in the United States, having completed nearly 200 installations since 2007.

In addition to assisting hotels with renewable energy projects, Constellation can work with them to achieve overall energy management goals.

This can include reducing energy consumption with energy efficiency upgrades and managing costs with strategic purchasing strategies.

Turner, a member of the Hotel Council of San Francisco, said Constellation and its renewable energy solutions can benefit hotels as the city strives to become known across the nation as an environmentally-friendly destination.

“The cost factor is negligible, and it’s the right thing to do at the right time,” he said. “It benefits all of us when we conserve and attract business, so we all win.”

If your hotel is interested in learning more about renewable energy options or energy management, contact Constellation today.