SC Johnson Q&A - mapping out renewable energy ambitions
In a world of increasingly unaffordable fossil fuels, the business case for renewable energy is undisputable. The trouble is many companies don't know where to start, which is why SB called on SC Johnson's Kelly Semrau to offer some insight into the company's renewable investment projects.
SB: How do you decide which of your business sites are most suited to renewable energy investment?
Kelly Semrau (KS): We review energy inputs at each site alongside a variety of economic, environmental and logistical factors. The decision-making process is about balancing company and commercial considerations, environmental gains and the contribution we can make to the communities in which we operate.
We also consider how we manage and minimise disruption and ideally a project will have added local benefits - for instance, the purchase and use of available biomass that would otherwise have been nothing more than a waste product, like rice husks.
SB: Once a site has been selected how do you determine which form of renewable energy to use?
KS: This is a decision that involves a variety of factors based on the geography of a site. For instance, if you had an open, high-wind area, the most attractive option would likely be wind. Biomass might make the most sense in areas that have adequate and consistent feedstock. The decision to use solar will depend on the surface area available for panels, as well as levels of sunlight.
Co-generation is only possible when there is adequate use for the heat produced We also look at the renewable technology that is available in a given area that could produce the most energy at the best installed cost. This could include consideration of local or nationalgovernment subsidies available.
SB: Wind power seems to be the prevalent form of renewable energy at SC Johnson - what's the reason(s) behind this?
KS: We use a number of renewable technologies around the globe, which have helped us to reduce our global greenhouse gas emissions by 42% compared with our 2000 baseline. Today, 30% of our global energy usage comes from renewable energy. Every one of our renewable projects takes into account a wide range of factors and technologies - government incentives, cost of grid electricity, actual cost of renewable energy delivery to the site, future forecasting of energy prices and cost versus environmental return.
Solar panels, for example, may seem like a good option, but when you really weigh the environmental factors, there are potential issues. For example, some contain chemicals that make safe disposal after use problematic. And the large area required for solar panels can disrupt local wildlife and migration patterns.
We've found that wind power has, in a number of cases, not only helped us to achieve our sustainability objectives, but has proved to be the most commercially viable. For example, we've found that wind energy tends to be about two to three times less expensive per kWh produced than for solar PV. So, the Return on Investment (ROI) for a wind turbine product tends to be much better than that for a solar project of similar capacity.
SB: SC Johnson has invested in just one solar project (Shanghai). Will you be using more solar in the future?
KS: We use solar panels at our Shanghai location to provide hot water heating for operations, and we may look at other locations for this technology. We've also looked at photovoltaic cells, but it's not a technology that we're pursuing because we haven't found it to be as cost effective as wind. Plus, we'd need several acres in an area for solar panels to produce the same amount of electricity that our two wind turbines now produce. When you look at the technology from a complete lifecycle perspective, we've found wind to better meet our needs.
SB: Are you looking at any new renewables technologies that might be implemented in the future?
KS: We are constantly on the look-out for new advances in technology, and always push ourselves to develop more innovative solutions to improve our carbon footprint. We have a global team in place who meets monthly to evaluate new and emerging technologies. We've developed solutions ranging from using waste from a public landfill for co-generation to using waste husks from rice grains as a fuel source for heating water used in mosquito coil production.
We make decisions based on a careful understanding of what makes the most sense for each particular SC Johnson location. We've looked at fuel cells, which could be useful for smaller energy needs in locations further from a grid or where the cost of electricity is high relative to the cost of natural gas.
However, we haven't found them to be the most efficient solution. Natural gas, for example, is more feasible. At our largest manufacturing facility, Waxdale in Mount Pleasant, Wisconsin, we use natural gas in our co-generation unit, which is approximately three times more cost effective than using fuel cells.
SB: How difficult is it to commit to investment when the technology landscape is continuously advancing and governments (such as the UK's) often change the legislation framework?
KS: Advancements in technology are so important, and governments have to step up if we're going to drive greater scale. We need energy policies that better incentivise renewable energy, and make it more readily available, with competition and investment in the market helping to make it more affordable.
Then companies like SC Johnson would be more likely to purchase it from local utility providers. Greater certainty is critical, too. A year-long tax incentive isn't meaningful or practical if it actually takes three years to properly plan and implement a renewable project.
In the absence of policy that makes renewable energy more affordable for purchase, and with technology evolving faster than utility companies are willing or able to upgrade their equipment, installing on-site equipment in many cases remains a better, longer term solution.
For example, take our wind turbines at our largest manufacturing facility: Waxdale in Mount Pleasant, Wisconsin. While the upfront costs for installing them were high, we're already beginning to see ROI and reduced overall energy costs with an approximate annual saving of $500,000 (£300,300) per year. As a company who's long been committed to sustainability, we believe that we have a responsibility to lead with our choices, and share our learnings, so that renewable energy becomes a viable option for more companies.
Kelly M. Semrau is the chief sustainability officer for SC Johnson.