Why Sun Chemical sees solar as part of its cost-reduction strategy
Schneider Electric, the global specialist in energy management and automation, recently added another healthy dose of renewable energy to its portfolio.
The company has announced the signing of a 20-year solar power purchase agreement (PPA) that will allow its client, Sun Chemical, to cut electricity costs at its Carlstadt, N.J., production facility by roughly $400,000. This extends the energy savings the company has realized through its partnership with Schneider, which runs into the millions.
The deal highlights the direction that the giant company has taken with its recent acquisition of Renewable Choice Energy, a leading provider of renewable power to industrial and commercial clients. By the time of the acquisition, the two companies already had helped clients install more than 2 gigawatts of renewable power.
At Sun Chemical’s Carlstadt facility, rooftop and carport photovoltaic (PV) arrays at the site will generate more than a million kilowatt-hours annually. That’s more than 30 percent of the facility’s total electricity demand.
Schneider's move deeper into renewables is a smart one. As knowledge of building performance has grown, practitioners such as Schneider are better prepared to take a holistic view of energy opportunities.
Clients often will ask, "I want to go green; how do I get the best bang for my buck? Is it efficiency or should I just go with renewables?" While the answers to these questions are certainly not black-and-white , one thing is clear: If energy demand can be reduced up front, through efficiency, that will reduce the size and cost of the investment in renewables.
Steve Wilhite, Schneider’s senior vice president of Energy and Sustainability Services, puts it this way: "As clean energy reaches price parity with traditional energy, companies are taking aggressive steps to integrate renewables. We are seeing tremendous demand from clients to source a mix of green energy at a competitive rate."
Wilhite said that as a team, Schneider and Renewable Choice effectively can address the concerns of "clients looking to diversify their overall energy strategy, while providing critical sustainability and risk mitigation benefits via clean energy solutions."
The recent solar installation is a case in point. Gary Andrzejewski, corporate vice president of environmental affairs at Sun Chemical, said, "Our decision to build PV arrays at our Carlstadt facility is the latest example of how our own facility managers have been challenging themselves with regard to eco-efficiency."
Using a data-driven process, the company worked with Schneider to identify the best path to cost reduction. Schneider then oversaw the solar bid process and contract negotiation.
"At Sun Chemical, we’ve challenged ourselves to look for ways we can improve our processes at individual sites by monitoring key metrics to understand and manage our environmental impact," Andrzejewski said. "We’re excited about working with Schneider Electric on this project, and we’re pleased with how they have helped us develop a progressive approach to energy management — one that makes us a more sustainable and profitable business."
Said Wilhite, "While utility bills continue to be one of the largest line items on any facility’s balance sheet, it’s critical that organizations consider every possible avenue to reduce energy consumption and offset demand. By looking at all aspects of energy — from how it’s purchased and used, to where it’s generated — we help clients identify new opportunities to optimize resources and continue driving innovation at every level of the organization."
Schneider continues to invest heavily in R&D, committing about $10.6 billion over the next 10 years. It cites the following statistics among the drivers:
- Electricity demand will increase two times faster by 2040.
- Connected devices will outnumber connected people by 20 times by 2020.
- 82 percent of the potential energy savings in buildings remains untapped.
- 70 percent of all generation capacity added by 2040 will be in the form of renewables.
As new technologies and solutions become available, it’s critical to not lose sight of the big picture and to be especially clear about the ultimate goals.