Energy
Coats aims to source renewable energy wherever that is feasible and is looking to expand its renewable energy generation which has grown from virtually zero to 28% in the last six years. There is already solar generation capacity at its Patrick Yarn Mill site in North Carolina, US and at Ambas, Southern India, which also has a biomass-based steam boiler.
Leader's Voice
“The risks associated with climate change continue to grow, and the window of opportunity for reducing damaging global warming is closing. While we have considered aspects of climate change risk discretely, we now regard climate change as a unitary Emerging Risk, which is reviewed at Board level. We are also looking closely at how we can report progress transparently and in line with the recommendations of the Task Force on Climate-Related Financial Disclosures. Addressing energy consumption and the sources of energy used in our business are, therefore, very high priorities for us.
Having done a lot in terms of reducing energy use in prior years, we need to focus on real-time optimization of demand and will be running pilot programs for this in 2020. We made significant progress in 2019 on renewable energy, with a new onsite solar array in Vietnam and negotiations underway in other locations. In 2019 we completed the transitioning off coal as a fuel source.
While climate change is a significant driver for our energy strategy, it is also imperative in terms of cost management as energy is a substantial cost driver in our processes. Reducing energy consumption generates a direct benefit, and we have also found, so far, that transitioning to renewable energy can be done without an adverse cost impact.”
Kevin Finn President, Business Operations
Sourcing renewable energy where possible
Our target is to increase our use of renewable energy, mainly through projects with suppliers where we contract with them the creation of new renewable generation capacity, through long term purchase commitments. In this way, we can ensure that the renewable energy we are using is an additional new capacity and hence actively contributes to de-carbonizing energy supplies. The renewable energy market is developing very rapidly at the moment. It is essential that we do our due diligence on our partners, and that our contractual terms ensure that we have rights to Renewable Energy Certificates or other equivalent attributes.
7% Reduction In energy intensity (Kwh/Kilo) by 2022
An Energy Management System (EnMS) in place is the essential requirement for taking a structured approach to achieving energy efficiencies. We have a program to progressively implement an EnMS aligned to ISO 50001 in all of our key manufacturing sites over the next three years. Over the last 18 months, our Romanian plant has developed a comprehensive system showing considerable success. Through the EnMS and with more meters strategically located in plants, we will identify all the significant energy users in our plants and develop the options for optimizing energy use in those processes. We continue to implement opportunities identified during the 2018 energy audits. These energy audits were useful in highlighting some opportunities, but are a snapshot assessment and are not as effective as having continuous management of actual energy demands.
Less energy and more efficiency
In 2019, we used 770 million kWh of energy (electricity and fossil fuels) to manufacture our products. This equates to a reduction of 3% in total energy compared to last year. Our energy use per unit of production has also reduced to 9.3 kWh per kg of production (2018: 9.4 kWh per kg). This is a reduction of 1% vs. 2018.
As for water, we have restarted 2018 to provide a like-for-like comparison with 2019. Full historical data is shown in the data table.
Over the last twelve months, we have continued to invest in new technology and processes, and stepped up our focus on energy efficiency, finding ways to improve our productivity while reducing our energy use. Over the last two years, we have undertaken detailed energy audits. Each site is working on a tailored energy-saving plan, most of which will be implemented in 2020. These include energy-saving opportunities ranging from increasing metering to equipment replacement to optimize energy savings and new waste heat recovery processes
At the end of 2019, we had our first
pilot site certified to ISO 50001. This is
the international standard for Energy
Management Systems, created by
the International Organisation for
Standardisation. The standard specifies
the requirements for establishing,
implementing, maintaining and
improving an energy management
system and continual improvement of
energy performance, including energy
efficiency, energy security, energy use and
consumption.
And these efforts are paying dividends, in Mexico, following a recent energy audit, we identified 24 energy conservation measures totaling potential savings of 32% of the total energy use. The top 4 measures were implemented, including boilers optimization, improving chilled water pump requirements, reducing the pressure for compressed air provision, and avoid using large well pumps during peak demand periods
In Bangladesh, two of our sites focussed on heat waste recovery processes both from the boilers’ exhausts and from the water jackets of the gas generators. Both locations saw a reduction in energy used, and one site successfully reduced their fossil fuel use by 12% while the other reduced their energy use intensity from 5.36 kWh per kg of thread to 4.71 kWh per kg.
Investment in renewable energy
Over the past year, in line with our intention to be using renewable energy whenever that is possible, we have continued to review the opportunities to install renewable energy generation facilities on and off our sites and purchase those Renewable Energy Certificates (RECs).
Just under a third of the energy we use
comes from renewable energy sources.
Our assessment has shown that we
could significantly increase this, and we
are evaluating potential targets over the
coming months.
We have several rooftop solar arrays now operating on Coats sites, and most of these are through long term PPA arrangements. We are finding this to be a very effective way to establish new renewable energy capacity rapidly and to evaluate potential partners in several countries. We have also found that there can be unexpected hurdles, especially in markets that are liberalizing their energy markets. In Mexico, we were quite advanced in discussions on a sizeable off-site wind energy PPA when an unexpected change in approach by the government effectively halted the project. We are currently working on a new project proposal for Mexico, and also exploring projects in India and Indonesia.
We have adopted a diversified approach that enables us to be flexible, depending on the type of renewable technology available. For example, at our Tamil Nadu site in India, we have chosen a solar plant. This plant provides 3.7% of the energy we need for both our locations in Ambas and Madurai, approx. 150 kWh per day. Another 90% of the energy we need comes from renewable energy generated offsite and provided by the Tamil Nadu Electricity Board. In the coming years, we are aiming to add another 750 kWh to our solar plant here
We are also proposing to increase the use of biofuel in our sites alongside entering more long-term Power Purchase Agreements (PPAs) for the onsite and offsite renewable energy generation.
Reducing our Greenhouse Gas
emissions
As a significant user of energy, climate change, and our emissions of greenhouse gases (GHGs) are a vital concern. In 2019, the total carbon footprint of our operations (Scopes 1 and 2) was 275 thousand tonnes. This is a 5% decrease compared to 2018 on a like-for-like basis. We have reduced the energy we use and continue our transition to renewables sources.
Our emissions intensity, measured in
kilograms per kilogram of production,
went down by 3% compared to 2018;
3.3 kg CO2e per kg compared to 3.4 in
2018. Again, we have restated 2018 to
make for a like-for-like comparison. These
calculations are done on a location basis.
We have been progressively eliminating the use of coal in our factories. In 2011 coal accounted for 3% of our direct energy use; by 2019, this was reduced to 0.4%, terminating coal use by year-end.
