1. May 19, 2017
Beyond the business case: identifying the value proposition for the community
Contact
Stephanie Cairns
Director, Cities & Communities
Could we get more Cities on board the renewables journey if we had a better value proposition?
In this workshop, I’ll be sharing research I conducted for an initiative called “Getting to Implementation on Community Energy Planning”. Basically, while about 275 communities in Canada, representing more than 60% of the population, have community energy plans outlining ambitious energy efficiency, fuel switching, and renewable energy plans, the vast majority of these have not moved from plan into implementation. Working with two other organizations, Quest and the BC Community Energy Association, our research looked at on why this is -- what are the barriers to implementation—and the initiative developed new tools and support to break down those barriers.
Our team at the Smart Prosperity Institute focused on two simple questions: What IS the Value Proposition for Community Energy Planning? And, how well is that value proposition being made to the decision-makers and communities who are needed to champion the journey to lower carbon energy systems?
To investigate this, we reviewed economic analyses of Community Energy Plans, & experience from 16 specific projects that have already been implemented across Canada. Our research was tested at several community workshop and webinars, and refined and adapted based on that feedback.
We came up with a menu, synthesized from these findings, of the types of positive community impacts that will often accompany energy efficiency, district energy, renewable energy, and active transport projects – while these impacts will be VERY project and community specific , they nonetheless provide a useful “checklist” for project proponents to assess whether they are presenting the full value proposition of their project to decision makers and communities.
So, here are 7 potential elements that might be explored in considering the value proposition for a renewable energy project, with some bite sized examples from our research.
“Copyright Queen's Printer for Ontario, photo source: Ontario Growth Secretariat, Ministry of Municipal Affairs and Housing”
institute.smartprosperity.ca

2. Elements for a value proposition
Will the project
Improve energy affordability for local residents and local businesses?
Keep “energy dollars” in the community?
Create local and/or regional jobs?
Will the project improve energy affordability for local residents and local businesses?
Canadians spend $2,000-$4,000 per capita per year on energy; energy efficient buildings and access to good public transport are key elements in lowering household expenditures for heating and mobility, and tackling energy poverty.
Energy affordability is also important for keeping jobs in communities. In Guelph, Ontario, for example rising energy costs placed pressure on a car parts plant, a major local employer, to close. Working with the provincial utility and the City, they installed a combined heat and power system that is saving the plant $2 million/year in energy costs, allowing the plant, and its jobs, to stay in the community.
Will the project keep “energy dollars” in the community?
In London, Ontario, a mid sized City, the community as a whole was spending a little over $1.6 billion/year on energy, a number large enough to catch City Council’s attention, but only 12% of these dollars stayed in the local economy. If energy efficiency or switching to locally generated electricity or fuels could reduced this by just 1 % annually, 14 million more dollars might well be spent in the local economy. The opportunity to keep these energy dollars recirculating in the community is what propelled the Mayor and the Council to become a big champions of the London’s community energy plan. A similar story was told yesterday about how San Diego first started down their energy sustainability pathway, mainly for economic reasons.
Will the project create local and/or regional jobs?
Any proposal for a local arena, or a new bridge, or a highway upgrade likely includes alluring estimates of job creation at the direct, indirect, and induced levels. But in our research we found that this important part of the value proposition was much too rarely addressed in energy efficiency and renewable energy proposals

3. Elements for a value proposition
Will the project
Attract new investment to the community?
Companies attracted by clean, high quality power
Companies attracted by green brand
Support community health goals (improved air quality, active transport)?
Increase energy resilience?
4. Will the project attract new investment to the community?
Some of this might come from companies looking for clean, high quality power. We heard yesterday about the 100% renewables commitments from over 80 North American companies- those companies want to locate in communities with green power, and many high techn companies also need highly reliable, high quality power.
Access to clean, affordable, and reliable energy was one reason that the RackForce Giga Data Center located in Kelowna, BC,
and that IBM moved their entire corporate headquarters and labs to Markham, Ontario, a move credited to the development of a local district energy system that provides clean, reliable, and affordable energy from multiple sources.
New investment might also come from companies wanting to ally with a City’s green brand. We heard the examples of this from Vancouver yesterday; Across the country, in Guelph, Canadian Solar chose to locate its solar module manufacturing plant specifically in Guelph because of that City’s Community Energy Initiative.
5. Will the project support community health goals, for example by improving air quality, or increasing the community’s activity levels?
In Waterloo, Ontario, it is predicted that the expansion of light rail and bus rapid transit will prevent up to 60 hospital admissions and reduce costs of health care by as much as $9 million over 3 decades, simply by reducing air pollution
6 . Will the project increase the community’s energy resilience?
In many remote and off-grid communities, local biomass based energy plants can help communities get off expensive trucked in diesel, and support twin goals of energy affordability and energy resilience.
Resilience in local energy systems is important for on-grid as well as off-grid communities. For example, distributed community energy can provide critical standby power for emergency reception shelters and for critical services in the event of major power interruptions such as those in Calgary’s 2013 flood, or the Ontario ice storm that same year which left millions without power for days in bitter winter weather.
Those are just some of the values that a renewable energy project can bring to a community. Of course, the value proposition needs to be assessed project by project, and community by community. But to our surprise, our research found that these types of community value propositions are all often not part of the analysis, nor of the pitch for community energy plans.
By considering, and bringing forward a broader value proposition, we might get more neighbourhoods, more local leaders, and more Cities on board with the renewables journey.