UC Regents Approve Final Component of Big Shift Phase 2, Moving UC Davis Toward 40% Fossil Fuel Reduction

At its March meeting, the University of California Board of Regents approved a $55 million component of UC Davis’ “Big Shift,” a multi-year, campus-spanning effort to replace the natural-gas-powered steam heating system with an electric-powered hot-water network. 

With Phase One finished in 2023 and the next phase planned completion in 2028, the Big Shift project will reduce annual greenhouse gas emissions in campus operations by roughly 40 percent and generate approximately $3.15 million in annual utility savings. When the full project is built out, those numbers can reach 80 percent and $8 million* respectively. 

Joshua Morejohn, executive director of Utilities and Engineering at UC Davis Facilities Management explained that these savings come from a “deliberate decision to redesign the campus energy system rather than rebuild the old one.” 

The storage tank that changes the equation 

Central to the newly approved component, is construction of a 2.25-million-gallon hot-water Thermal Energy Storage, or TES, tank, essentially a giant thermal battery for storing heat. 

Electricity prices fluctuate throughout the day. By storing heat in the TES tank when electricity is cheaper or cleaner, the university can use the heat during peak demand periods. 

The new system will also house two heat-recovery chillers that capture heat from cooling buildings and recycle it for heating, turning waste into working energy. 

Together, these upgrades allow the campus to lower operating costs, reduce strain on the grid, reuse energy, and cut fossil fuel use. 

How the funding came together 

The $55 million Big Shift portion approved by the Regents makes the total cost of the current under-construction phase $124.99 million and brings the total Big Shift investment to $180 million. 

With this part approved, the campus avoids roughly $40 million in deferred maintenance that would otherwise have been required to replace some of the campus’s oldest boilers and chillers. 

To make the $55 million portion viable, UC Davis combined long-term external financing of 4.25% over 30 years offset by approximately $25 million in federal clean energy tax credits under the Inflation Reduction Act, or IRA, and revenue from the University of California’s biogas program under California’s Low Carbon Fuel Standard. 

Because these federal tax credits are limited in both availability and timeline and must be used specifically for clean energy and storage, moving forward now allows the campus to take advantage of a rare funding opportunity. 

“The timing is critical,” said Clare Shinnerl, vice chancellor for Finance, Operations and Administration. “This approved Regents action allows us to further reduce greenhouse gas emissions, lower utilities costs, address deferred maintenance, and prepare for a campus expansion – all while benefiting from federal incentives. We are grateful for all the support.” 

The decision marks another step in UC Davis’ long-term strategy to transition away from fossil fuels, a shift that began here before any other campus in the UC system, while further strengthening the campus’s sustainability leadership.

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  Estimated annual savings are based on current projections and will vary depending on project delivery timelines, future energy prices, and potential carbon costs or regulatory requirements.