Non-utility energy procurements represent big business in the American wind energy industry. While not yet a driving force in Canada, it’s a trend with significant potential on our horizon. Susanne Fratzscher, Director of Business Development at CustomerFirst Renewables will join a CanWEA panel called The Future of Corporate Power Purchase Agreements (CPPAs) in Canada, to discuss this very opportunity.
We spoke with Susanne about the upcoming conference, the context for the momentum of CPPAs in the United States and what this might mean for Canada.
*This interview has been edited for clarity and length.
Let’s start by introducing our readers to CustomerFirst Renewables. How do you help companies to make good procurement decisions?
Susanne Fratzscher: We are an independent advisor that helps buyers understand what role renewable energy can play in their energy supply mix. We help clients to develop actionable energy strategies, guide them through the competitive procurement process, and once procurement decisions are taken, we support them to optimize the performance of their procurement over time.
Our work on the implementation side has been focused on the US, primarily because this is where direct corporate procurement of renewable energies has grown significantly over the last few years. However, we are also advising clients in Canada to see what options they have in different provinces. We hope we can build more momentum here.
What can attendees expect from your panel?
Susanne Fratzscher: First, I want to encourage corporate buyers to think creatively and strategically about their energy procurements to see where renewables can play a very attractive role.
Second, in order to maximize the value of renewables, I want companies to understand it is important to think about a robust strategy first and then procure competitively.
Third, it is very important for buyers to avoid having all their eggs in one basket—to diversify their value and risk by using renewable energy portfolios.
Fourth, my message to government entities is that voluntary claims must stay voluntary and there must be carve-outs of provincial targets for non-utility buyers.
Finally, it is important for the industry to work together to provide education, support, and patience to non-utility buyers as they go through the procurement process.
How do Corporate Power Purchase Agreements work in the United States? Why has this been an effective strategy for US corporations?
Susanne Fratzscher: Corporations and institutions have traditionally been on the receiving end of power procurement from local utilities. Now, they are starting to think about actively shaping their purchases through direct procurements. This shift is driven by corporate and institutional carbon reduction goals coupled with the declining cost of renewable energies, which make renewables a cost-competitive alternative to conventional power purchases.
An additional factor is that corporate and institutional non-utility buyers have discovered that the power purchase agreement (PPA) model is a great contractual framework to procure renewable energies. PPAs allow the buyer or multiple buyers combined to purchase power at a certain price for a given time from a given project. It enables corporations and institutions to avoid upfront investments and to access much larger procurements than if they had to invest.
What are the key opportunities for CPPAs in Canada?
Susanne Fratzscher: We’ve been speaking about the economic value proposition—saving cost on non-utility buyer energy procurement—but reducing the volatility of spend and green energy goals are two very significant additional drivers.
There are also many strategic benefits. Millennials resonate extremely well with companies that demonstrate corporate sustainability and innovation. All of this can be represented through renewable energies.
However, certain aspects of the renewable energy value proposition are stronger in certain places. A company will consider if its energy load is in a largely nuclear-powered province like Ontario, where the electric footprint is relatively clean but power is comparatively expensive, or in a province like Alberta where its footprint is more carbon-intense and prices fluctuate. It all depends on what objectives the corporation wants to achieve and how it can leverage the value proposition of renewable energies.
How can the wind energy sector in Canada align itself for success through CPPAs?
Susanne Fratzscher: The Canadian wind industry can start to see corporate and institutional buyers as an additional driver for demand, and can help the renewables-development community to realize that corporate and institutional buyers approach procurement in a very different way than a utility buyer.
For institutions and corporations, this approach is very new and requires a lot of upfront education and organizational understanding. We need to debunk a lot of myths related to renewable energy procurement, like that the lights won’t go off if there is no sunshine or no wind, or that it isn’t more expensive than conventional grid power.
It would be helpful to have independent voices like CanWEA, along with other institutions and independent advisors to support this education process.
What are you most looking forward to at the CanWEA Annual Conference and Exhibition?
Susanne Fratzscher: I’m looking forward to interacting with Canadian wind energy leaders and corporate buyers. I’ll also be watching to see where the challenges are in Canada and how they can be overcome to help corporate buyers become one of the constant and driving forces for renewables, particularly in provinces where the shift to cost-effective and green energy is dearly needed.
You can find Susanne on-stage during The Future of Corporate Power Purchase Agreements (CPPAs) in Canada on October 24, 11.00 am to 12.00 pm.
Susanne Fratzscher is the Director of Business Development at CustomerFirst Renewables (CFR), and leads CFR’s business outreach and marketing as well as relationships with the higher education, healthcare, and financial services sectors.
Susanne has 16 years of experience in leadership positions in renewable energy, business development, and project management. As Senior Advisor, Renewable Energy for the World Wildlife Fund (WWF), she helped leading global companies develop strategies to source renewable energy and create value for their bottom-line and reputation. During her tenure as Managing Director of the Canadian German Chamber of Industry and Commerce in Montreal, she was instrumental in building and leading a team to provide consulting services to corporations on international business development strategies, primarily in renewable energy and clean tech industries.
Looking for more wind energy insights?
The Annual Canadian Wind Energy Conference & Exhibition is the meeting point for all members of the wind energy industry – top business executives, technical experts, decision and policy makers, and government representatives – to come together and address the key issues facing the industry today. Join us October 23-25, 2018 at the BMO Centre in Calgary, Alberta.