Cincinnati plans to power city government with massive new solar array

The city of Cincinnati plans to buy enough energy from a new solar plant to be built in Highland County to power about a quarter of city government year-round, Mayor John Cranley said on Thursday.

A company is building a 400-megawatt plant on 1,000 acres of soybean fields in the county, which is east of Clermont County. The city will buy energy generated by 100 megawatts of the array, and city officials projected that Cincinnati either will break even or save up to $1.7 million over 20 years based on current energy prices. There also is room at the plant to add additional panels, so other cities or businesses could join Cincinnati.

At a news conference on Thursday at the city’s West Side police station, which uses net zero energy, Cranley said his goal is to do just that and try to make up for what he called the Ohio General Assembly’s shortsighted decision to end requirements that a certain percentage of the state’s energy be generated from renewable sources.

The city is incurring no capital costs to build the array, Cranley said. It will be constructed by Chicago-based Hecate Energy. Cincinnati-based Creekwood Energy Partners, which is headquartered at the Scripps Center downtown, consulted on the project, helping put it together. The city will enter into a power purchase contract with the companies, which will allow them to get financing to build the array. The contract will allow the city to pay a consistent rate for the energy generated by the array.

“The city’s not taking any financial risk on this,” Cranley said, adding that it would be financially irresponsible to taxpayers not to carry out the plan. “You may not care about the science.”

Nevertheless, there is a moral component to the decision, he said. By using renewable energy, the city is reducing its carbon emissions by 158,000 tons, the equivalent of taking 30,000 cars off the road, planting 2.4 million trees or foregoing the burning of 157 million pounds of coal. City government’s biggest energy user is WaterWorks.

“We believe it’s wrong to rip up this planet and leave it worse for our kids,” Cranley said.

The city cannot just buy renewable energy from an already existing producer because one doesn’t exist at the scale with the available capacity the city proposes to purchase, said Craig Overmyer, vice president of options for Hecate Energy.

Overmyer acknowledged that the city could pay higher than market rate at times if cheaper energy comes on the power grid from another source or if some revolution happens in solar panels that makes them much cheaper or more efficient. Solar technology, however, has been subject to slow evolution, not radical revolution in terms of how it has changed, he said. The price of such panels has dropped.

“We don’t see that on the horizon,” Overmyer said of major technological changes to solar. “I don’t know what the price of electricity is going to be 12 years from now. I don’t know that anything has really come down in price if I look back 12 years. They know they have one locked in cost. It doesn’t escalate. It doesn’t go up with inflation.”

Residential electric prices have been relatively flat in real dollars for the past 20 years, according to the U.S. Energy Information Administration.

Cities have gotten burned before on such deals. In Springfield, Ill., the city agreed to a 10-year contract in 2008 to buy wind power at a rate that ended up being more than double what it could have paid on the open market or to generate the power itself at its coal-fired power plants.

Cranley said the Highland County solar array will be big enough to achieve the economies of scale needed to beat coal on price.

Michael Forrester, the city’s energy manager, said Cincinnati is buying a long-term hedge on its energy bills.

“Our overall goals were to utilize money we already spend … and choose where we’re getting our electricity from,” Forrester said. “Overall, as energy markets rise, we have locked in our price.”

Environmental advocates praised the decision.

“The leadership at the statehouse has just flat out failed us when it comes to clean energy,” said Heather Taylor-Miesle, executive director of the Ohio Environmental Council. “The cities are … going to make sure we take those steps forward.”

The full array will go into service by December 2021.

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