J.M. Smucker Company Enters into PPA to Cover 50% of the Company’s Total Electricity Use by 2020

 

The J. M. Smucker Company recently announced it has entered into a long-term power purchase agreement (PPA) with Lincoln Clean Energy (LCE) for 60 megawatts (MW) of the utility-scale 230 MW Plum Creek Wind Project in Wayne County, Nebraska. Starting in 2020, the wind energy produced from the Plum Creek project will address approximately 50% of Smucker’s total electricity use.

“In 2017, electricity accounted for more than half our greenhouse gas emissions,” said Julia Sabin, Vice President of Government Relations and Corporate Sustainability for The J. M. Smucker Company. “This agreement will not only reduce our carbon footprint but will also allow us to make a lasting contribution to our nation’s renewable energy capacity.”

In an effort to learn more about the company’s most recent energy initiative, Energy Manager Today interviewed Sabin.

EMT: What are some of the challenges faced throughout the process?

JS: “Smucker has a long-term sustainability vision built on our basic beliefs but, like many companies, our long-term business planning is done in three-to-five-year increments. It took our internal team time to get comfortable with an agreement well beyond that typical three-to-five-year increment. The sheer number of attractive renewable energy projects in the market meant we had to create robust criteria to narrow down the options. Once we arrived at the vPPA project we wished to pursue, having the the right legal and advisory expertise was critical to successfully navigating the complexities of such a contract.”

EMT: What are some of the lessons you and your team learned from this?

JS: “In order to gain approval from senior leadership at the start of the process, we needed to identify a project champion and project manager, then assemble the right cross-functional team from the start. Our team launched with representation from corporate procurement, commodity purchasing, finance, treasury, tax, legal, corporate engineering, and corporate sustainability. Having the right people discussing the details from the outset allowed the sourcing work to progress rapidly. Energy forecasting can sometimes be more of an art than a science and required layering our internal subject matter expertise on top of best-in-class external advisory input to arrive at an acceptable financial model specific to our business. Simply put, unless your company has existing internal expertise, an expert external advisor is indispensable.”

EMT: What was the business case for a company like Smucker to invest in renewables in this way?

JS: “This effort began with the sole purpose to meaningfully move the needle on reducing our greenhouse gas footprint. Once the team learned more about the approach, we began to understand the incredible social impacts of wind farms like Plum Creek. Finally, we worked to become as comfortable as possible with the financial aspects and, fortunately, those turned out to be favorable for all involved. Additionally, by aiming to address 50% of our electricity usage, we increase our price certainty for electricity in an increasingly uncertain market. This project builds on our previous renewable energy efforts that are on-site at our Chico, CA and Havre de Grace, MD manufacturing facilities as well as prior Green-e certified renewable energy credit purchases. The partnership with Lincoln Clean Energy allows us to significantly increase our impact by participating in a utility-scale project.”

LCE has developed and financed more than two gigawatts of wind power over the last four years and was the largest non-utility developer and owner of US wind power commissioned in 2017.

“In addition to creating high-paying local jobs, the Plum Creek Wind Project will result in over $3 million in local community benefits annually in the Wayne County area,” said Declan Flanagan, Founder and CEO of Lincoln Clean Energy.

Schneider Electric Energy & Sustainability Services served as an advisor to Smucker on its selection of Plum Creek.

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