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Developing a Business Case for Renewable Energy at Airports
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168 pages | 8.5 x 11 | PAPERBACK
ISBN 978-0-309-42939-9 | DOI 10.17226/22081
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GET THIS BOOK Stephen B. Barrett, Philip M. DeVita, Julie Kenfield, Bradley T. Jacobsen, and
David Y. Bannard; Airport Cooperative Research Program; Transportation Research
Board; National Academies of Sciences, Engineering, and Medicine
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Developing a Business Case for Renewable Energy at Airports
A I R P O R T C O O P E R AT I V E R E S E A R C H P R O G R A M
ACRP
REPORT 151
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
Subscriber Categories
Aviation • Energy • Finance
Research sponsored by the Federal Aviation Administration
TRANSPORTATION RESEARCH BOARD
WASHINGTON, D.C.
2016
www.TRB.org
Copyright National Academy of Sciences. All rights reserved.
Developing a Business Case for Renewable Energy at Airports
AIRPORT COOPERATIVE RESEARCH PROGRAM ACRP REPORT 151
Airports are vital national resources. They serve a key role in trans- Project A02-56
portation of people and goods and in regional, national, and interna- ISSN 1935-9802
tional commerce. They are where the nation’s aviation system connects ISBN 978-0-309-37504-7
with other modes of transportation and where federal responsibility for Library of Congress Control Number 2016932850
managing and regulating air traffic operations intersects with the role of
© 2016 National Academy of Sciences. All rights reserved.
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) COPYRIGHT INFORMATION
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Developing a Business Case for Renewable Energy at Airports
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Developing a Business Case for Renewable Energy at Airports
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
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
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.
Copyright National Academy of Sciences. All rights reserved.
Developing a Business Case for Renewable Energy at Airports
F O R E W O R D
By Theresia H. Schatz
Staff Officer
Transportation Research Board
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 airport’s 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-
port’s particular objectives. The report presents a business case in the context of an airport’s
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 airport’s 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.
Copyright National Academy of Sciences. All rights reserved.
Developing a Business Case for Renewable Energy at Airports
C O N T E N T S
1 Summary
3 Chapter 1 I ntroducing 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 I ntegrating 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
Copyright National Academy of Sciences. All rights reserved.
Developing a Business Case for Renewable Energy at Airports
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.
Copyright National Academy of Sciences. All rights reserved.
Developing a Business Case for Renewable Energy at Airports
S u m m a r y
Developing a Business Case for
Renewable Energy at Airports
Organizations prepare a business case analysis to engage in a thorough investigation of the
alternatives to a proposed project. Increasingly, business value is being measured not only
by the immediate and quantifiable financial metrics, but also through consideration of the
self-sustainability, environmental, and social benefits. Airports are not only self-sustaining
businesses and agents of governments; they are also critical components of the regional and
national transportation infrastructure. This puts them in a unique position to make credible
arguments that support both the financial and policy objectives of an organization pursuing
long-term self-sustainability.
This report provides airports with instruction and tools to help them develop a business
case that maximizes the benefits of renewable energy opportunities. It presents the busi-
ness case as a comprehensive planning exercise supporting a specific objective (e.g., energy
stability, reliability) and integrates it into the airport’s typical decision-making process. It
provides a systematic approach to combine the application of near-term financial measures
that are typically considered in business planning along with value for self-sustainability
benefits associated with long-term investments and the environmental and social benefits
that are important to the airport in its governmental responsibilities.
The research supporting the guidance focuses on identifying and communicating the
inherent benefits of renewable energy as part of the business case analysis. To reinforce its
practical application, this report presents direct experience in developing a business case for
renewable energy to show how those attributes are valued differently by different organiza-
tions with different missions and how this broader renewable energy business experience
translates to the airport business.
• Chapter 1 lays out what a business case is, why renewable energy is important, what
renewable energy technologies should be considered and when, and what a business case
for renewable energy at airports looks like.
• Chapter 2 describes how an airport can justify its renewable energy project by identifying
key objectives and how the project fits into the airport’s vision.
• Chapter 3 reviews the criteria used to evaluate a renewable energy project and presents a sys-
tem for weighting each factor, including long-term self-sustainability and environmental/
social considerations, based on the airport’s particular objectives.
• Chapter 4 describes how an airport should integrate the proposed project into its stan-
dard master planning and capital planning process.
• Chapter 5 identifies the key internal and external stakeholders whose participation is
central to successful implementation.
• Chapter 6 walks through a model business case and evaluates each of the factors funda-
mental in the renewable energy business case.
1
Copyright National Academy of Sciences. All rights reserved.
Developing a Business Case for Renewable Energy at Airports
2 Developing a Business Case for renewable Energy at airports
• Chapter 7 provides examples of similar renewable energy business cases from both an
airport’s perspective as well as from the perspective of other industries and the lessons
learned.
• Chapter 8 guides airports in evaluating diverse funding opportunities.
Some practitioners may spend time reviewing the entire report as it lays the groundwork for
the benefits of renewable energy and how these projects can be applied to airports. Others may
want to focus on the model business case provided in Chapter 6 to go beyond the theory and
see how a business case for on-site energy decisions is developed. The business case examples
provided in Chapter 7 provide a clear illustration of what different organizations are doing in
the renewable energy area and why.
Regardless of how one uses the report, it represents a change in thinking for most in view-
ing the future where airports will continue to execute their missions of providing safe and
efficient air travel to the general public while navigating an increasingly unpredictable energy
landscape, which is critical to its core functionality. The challenge for airports is to adapt the
business case examples to a business that is far from “usual,” to take advantage of opportuni-
ties being revealed by technology and a changing energy industry, and to address challenges
associated with securing airport operations in times of new and unanticipated risk. Renewable
energy can be part of that solution.
Copyright National Academy of Sciences. All rights reserved.
