Kimberly-Clark: Self-sufficient onshore wind PPA
Kimberly-Clark’s bold efforts to halve emissions across its supply chain by 2030 has seen the manufacturer partner with the energy sector on a £75m windfarm in Scotland, that will provide the majority of its electricity needs in the UK.
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At a glance
Who: Kimberly-Clark
What: £75m onshore windfarm
Where: South Lanarkshire, Scotland
When: September 2023
Why: Create a secure and guaranteed clean energy supply for manufacturing
The Challenge
The energy market is experiencing unprecedented price volatility at the moment, with the war in Ukraine causing price spikes for renewable energy producers, which in turn, sees the costs passed onto companies buying Power Purchase Agreements (PPAs).
According to LevelTen PPA prices increased by 23% for wind and 37% for solar in Europe in 2022 alone.
This has disrupted the PPA market, with buyers now looking for competitive costs and guarantees that the energy they are purchasing is actually from clean energy in order to support public decarbonisation targets.
The Solution
Global manufacturer Kimberly-Clark confirmed the opening of a new £75m onshore wind farm in Scotland, which will supply clean energy for around 80% of the company’s electricity needs in the UK.
Kimberly-Clark has agreed to a Power Purchase Agreement with Octopus Renewables Infrastructure Trust (ORIT), to procure wind power from the new project.
How the project works
The £75m onshore windfarm in South Lanarkshire, Scotland, is ORIT’s largest wind asset and was opened by Màiri McAllan, Member of the Scottish Parliament for the Clydesdale constituency and Cabinet Secretary for Transport, Net Zero and Just Transition.
The wind power will account for around 80% of Kimberly-Clark’s electricity needs across its Barrow, Flint and Northfleet manufacturing facilities. These facilities produce around one billion Andrex toilet rolls, more than 150,000,000 Kleenex tissue boxes and around 136 million packs of Huggies baby wipes annually.
The windfarm provides the company with a stable and guaranteed source of clean energy that will be used to power manufacturing facilities across the UK.
By investing in the windfarm Kimberly-Clark gains access to a long-term supply contract of renewable power, most likely at a fixed price (although this has not been disclosed by the manufacturer, whilst also gaining certainty as to the origin of the energy that is being used to power manufacturing processes.
The results
The 50 MW 12-turbine Cumberhead facility will supply Kimberly-Clark with approximately 160,000 megawatt hours (MWh) of renewable energy every year. This will deliver an emissions reduction of 55,625 MTCO2e per year – the equivalent of taking 38,628 passenger vehicles off the road every year.
Business context
Kimberly-Clark has pledged to halve its direct, power-related and supply chain emissions by 2030, as part of climate targets approved by the Science-Based Targets Initiative (SBTi).
By 2026, Kimberly-Clark UK and Ireland is aiming to reduce its Scope 1 and 2 emissions by 85% from a 2015 baseline and will transition to 100% renewables by 2030.
To achieve these goals, the company is also developing onsite solar solutions and invest in green hydrogen.
Kimberly-Clark expects the wind farm that will serve its first UK-based green hydrogen project to come online by the end of the year.
Industry Context
Onshore wind has historically struggled for financial backing in the UK compared to other renewable technologies like offshore wind and solar. Having previously been barred from key legislative schemes like the Contracts for Difference (CfD), the Government is now opening up new avenues for onshore developers.
In September 2023, Prime Minister Rishi Sunak confirmed that planning rules would be changed to make it easier for onshore wind developers to deliver projects in regions with strong local support among the general public.
Councils will no longer need to identify areas for development through their local plans, then subsequently make changes to these plans and wait for the updates to be signed off. The Government has set out several new pathways, including Local Development Orders and Community Right to Build Orders.
The Government is also scrapping a feature of planning design which means that an onshore wind farm can, essentially, be halted by the objection of one individual.
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