Our fourth interview is with Kelly Snyder, senior director of origination at EDP Renewables North America. Discussions about greenhouse gas accounting all too often overlook the tremendous role of energy customers in driving grid decarbonization investments and the efforts of the people who make that clean energy procurement happen. The Clean Energy Buyers Institute has interviewed five energy professionals and asked five questions, to reveal insights and real stories about their hard work to advance the carbon-free energy transition. Customer perspectives are important for broader industry dialogues, particularly as World Resources Institute and the World Business Council for Sustainable Development update the Greenhouse Gas Protocol.

1. Could you share an example or two illustrating how and why carbon-free electricity (CFE) procurement is important for your company and for decarbonizing the grid?

As a pure-play renewable independent power producer, making CFE procurement more accessible is a part of EDP Renewables North America’s core mission. According to the U.S. Energy Information Administration, roughly 30% of all U.S. carbon-dioxide emissions are derived from the electricity sector.

Limiting the increase in global temperature to 1.5° Celsius compared with the pre-industrial levels requires the global economy to fully decarbonize by 2050. To overcome this unprecedented challenge, there must be a coordinated commitment from all countries, involving policymakers, businesses, consumers, and power generators like EDP Renewables North America. Currently, more than 130 countries have announced or are considering net-zero targets, covering 83% of global emissions. This corresponds to more than 90% of the global gross domestic product and 80% of the world population. However, the announced pledges fall short of reaching the target by 2050, and there is still an ambition gap to be fulfilled.

2. How does the voluntary market system affect how you assess different CFE procurement options and ultimately make decisions?

Roughly half of all power purchase agreements for renewable generation in the last five years have been driven by corporate and industrial buyers. We view voluntary purchases as an effective way for buyers to both demonstrate their general commitment to CFE procurement and to drive deeper impact via the ability to make specific commitments to physical renewable projects that they’ve helped bring onto the grid via their commitment to purchase electricity and energy attribute certificates (EACs).

3. How do energy attribute certificates (EACs) and market-based accounting affect your decision making, and why?

We appreciate that market-based accounting provides our buyers the ability to individualize their reporting by taking into account the contractual commitments they’ve made with renewable energy producers in the locations where they do business. As such, pointing to specific projects is a key distinguisher for companies willing to make a bigger impact than just buying a retail green energy contract or unbundled renewable energy certificates (RECs).

It is critical for leading developers like EDP Renewables North America to have contractual certainty in order to allocate the capital to build the project. For our clients, contributing to a new renewable project makes a meaningful difference in meeting their corporate environmental, social, and governance (ESG) and sustainability goals. The client should be able to say, “I helped build that project!” and feel like an equal partner in the success of a project’s development. It’s a win/win for the client, EDP Renewables North America, and our climate.

4. What advice would you give to companies that are just starting their efforts to procure carbon-free electricity?

Just like evaluating projects to avoid or reduce emissions via reducing consumption, we’d recommend you consider the costs of the action alongside the benefit of the elimination of future costs. Companies interested in procuring carbon-free energy should evaluate the potential upsides of power purchase agreements as a hedge against future increases in electricity costs. Retail plans will just increase costs vis-à-vis the retail nonrenewable option; however, power purchase agreements (PPAs) have the ability to also act as a hedge, rather than just a cost center, provided the renewable project is in a similar location to the corporate load.

It is just as important to consider key factors beyond price, including the developer’s experience and track record. We would encourage first-time corporates to meet the developer face to face, call references, and to make sure the partnership will work, because when signing a PPA, you are essentially getting married!

One of our greatest successes was when one of our potential clients came out to an existing wind site and experienced our day-to-day operations and saw firsthand the culture of safety that is infused in our project DNA. It was our environmental team who sealed the deal. EDP Renewables North America has a world-class environmental group that is actively setting standards, participating in research, winning awards, and making the industry better. The client was able to see this for themselves, and we signed the PPA onsite, and the project is now in operation.

5. If you could change one thing in today’s CFE markets to help your company go even further in decarbonizing the grid, what would it be?

Renewable projects are extremely capital intensive; a typical renewable project will spend three-quarters of its total capital outlay over the project’s useful life by day one of operations. Because this is a fundamental aspect of renewable projects, project development risk is seen as an extremely critical piece of overall project risk to manage. Many buyers — understandably so — are hesitant to transact with projects unless/until developers are certain they can bring projects online. If we could change one thing, we would tell buyers to be open to transacting with earlier-stage projects and agree to share risks that the developer sees as still extant and mitigable through the practical exercise of due diligence.

Oftentimes, the best projects (whether “best” is determined by a project’s location, size, price, or by other attributes) are never marketed broadly to customers who are in that large category of those who wait until projects have “certainty.” Usually, the winning off-takers of these projects are those who realize greater benefits by sharing risk with their developer.