Citizens powers up its renewable energy commitment with Sunflower Wind

Photo courtesy of Ørsted

Sunflower Wind, a newly operational wind farm in Marion County, Kansas, generates enough clean energy for the local grid to power around 96,000 homes annually. It's a boon that's expected to help meet the state's energy needs for decades to come. Back in September 2022, Citizens entered into a virtual power purchase agreement (VPPA) with Ørsted, the company that developed the wind facility. With the deal, we secured a 25.8-megawatt share of the project's 200-megawatt capacity.

The renewable energy produced by Citizens' share matches 100% of our expected power consumption across our entire operational footprint.

In addition to establishing a sustainable energy source, the construction of Sunflower Wind created over 200 jobs during peak construction and created 10 highly skilled, full-time roles for the wind farm's operations and maintenance. Plus, the project will inject tens of millions of dollars in property tax revenue over the next 30 years, which will help fund local infrastructure, schools and emergency services with no added tax burden to local taxpayers.

Recognizing the opportunities created by Sunflower Wind, we knew it was the perfect project to spur Citizens' ongoing efforts to reduce our operational impact, support the transition to a lower-carbon economy, and mitigate the effects of climate change.

Pursuing a source of renewable energy

A VPPA is a long-term contract to buy renewable power — in this case, in the form of renewable energy credits. An agreement like this requires a significant investment, not only in terms of financial cost but also in time and patience.

"A VPPA can take a long time," says Hugh Peltz, senior vice president of procurement and property corporate services. "The timeline we're talking about is months or even years before the project actually comes to fruition and starts to generate power."

With the agreement, Citizens has pledged to offtake a certain amount of energy generated by Sunflower Wind, an action that Peltz describes as being unique for financial institutions. Committing early to being a long-term offtaker supported Ørsted's ability to construct the project. Other corporate offtakers include a Walmart supplier cohort that includes Amy's Kitchen, The J.M. Smucker Co., Great Lakes Cheese, Levi Strauss & Co. and Valvoline.

Finding the right partner in Ørsted

When we began looking for a VPPA partner, we considered many options, including several solar energy producers and other wind power facilities.

"We bid both wind and solar projects," Peltz said, "but there was a unique inflection point in the market due to our timing. During our process, there were a number of concerns being raised around forced labor in solar supply chains that was limiting the supply of panels. At the same time, there weren't very many wind projects happening. Based on the proposals we received, Sunflower Wind represented our best ability to move forward."

Throughout the consideration process, Citizens prioritized projects with economic viability, high levels of transparency and a strong likelihood of coming to fruition. The other possible projects faced supply chain uncertainty, a lack of offtaker participation or difficulty securing internal funding and authorization.

Choosing to partner with Ørsted was the right choice for many reasons. "One of our considerations in choosing a partner was the story of impact, and Ørsted was stellar in that regard," says Peltz. "With everything from biodiversity initiatives to supply chain and recycling partnerships to community engagement throughout the project, they went above and beyond."

Embracing sustainability beyond wind power

Our VPPA with Ørsted is "an important piece of Citizens' overall operational sustainability program," explains Peltz. While this project makes us one of the first financial organizations to enter into a VPPA, it isn't our first involvement with renewable energy projects. Citizens has supported sustainable energy for years through other types of investments, such as being a tax equity investor. In fact, we've funded nine other wind farm projects since 2015, totaling $375 million in investments.

Since our IPO, we've worked to reduce our emissions year over year and disclose our progress along the way. Across our footprint, our property team has implemented a retail network transformation plan to upgrade our buildings to energy-efficient systems.

We are reducing emissions through a three-pronged strategy: lighting, automated building management and efficient HVAC systems.

• Across 1,200 branch locations, we are replacing incandescent lighting with more efficient LED bulbs wherever possible, reducing energy use and waste.
• A smart building management system helps control energy consumption through automated thermostat settings and light schedules, similar to using smart devices in a home.
• Monitoring and analyzing the performance of HVAC systems in all branches gives us opportunities to further reduce energy use and replace aging equipment.

Encouraging others to spark positive climate impact

As we work to reduce emissions and invest in renewable energy, we're also prioritizing what our learnings can do to support and guide our clients as more people and businesses adopt sustainable practices.

We are committed to engaging with our clients – especially those in high-emitting sectors – on how they can prepare for and manage the transition to a lower-carbon future. Many of our conversations have leveraged insights gleaned from our own operational sustainability experience, including this virtual power purchase agreement.

Investing in renewable energy projects is just the start. Agreeing to buy energy produced by a project requires foresight, due diligence and long-term commitment. With our involvement in Sunflower Wind, we're demonstrating dedication to driving positive climate impact — in our 1,200 branch locations, across rural Kansas and around the globe.