June 21, 2022
With a strategy of additionality and flexibility, Novartis aims for carbon neutrality across its global operations
By Elana Knopp, Senior Content Writer
Santa Rita East Wind Farm (Photo courtesy of Invenergy)
Edison Energy recently sat down with James Goudreau, Head of Environmental Sustainability External Engagement at Novartis, to discuss the company’s strategies to reduce its global carbon footprint. Goudreau, whose work focuses on the development and implementation of Novartis’ energy, climate and resilience strategy, has designed and executed global corporate policy across the US Navy and US Marine Corps. He has served in multiple positions supporting global supply chain logistics for mobile units deployed around the globe.
In 2019, leading global developer Invenergy announced the start of commercial operations for the 302.4 MW Santa Rita East Wind Farm, located approximately 70 miles west of San Angelo, Texas.
The 123-turbine wind project, which was developed and constructed by Invenergy, supported more than 300 jobs during peak construction and has created more than a dozen permanent full-time operations and maintenance jobs for the long-term operation of the project. The wind farm also contributes approximately $5 million annually to the local economy through tax payments and lease payments to participating landowners.
Invenergy Santa Rita East Construction from Invenergy on Vimeo.
Edison Energy conducted a competitive solicitation for the project, analyzed the responses, and upon selection, worked to ensure the project’s long-term success.
Impactful projects that create new jobs in the renewable energy industry and replace fossil fuel generation are becoming more common due to the support of private sector companies like Novartis, a global pharmaceutical corporation that is working to reduce its carbon footprint.
Three offtakers announced three separate virtual power purchase agreements (VPPAs) for Santa Rita East, totaling 260 MW, with leading corporations Grupo Bimbo (100 MW), Merck (60 MW) and Novartis (100 MW).
“When we started looking at ways to decarbonize our electricity in the U.S. and Canadian markets, we debated whether we do onsite generation projects,” said James Goudreau, who leads external engagement on Novartis’ Environmental Sustainability team. “Do we do PPA in markets that would allow for that, or do we go with a VPPA? We knew we didn’t want to do unbundled RECs as a way to achieve carbon neutrality–we felt that just wasn’t as credible or high quality as creating additional generation capacity. We focused on additionality.”
Novartis has had a long-standing commitment to both energy and climate resilience. In 2017, the company struck its first major wind power deal in any market globally by signing as an offtaker for the Santa Rita East wind farm.
This single contract allowed Novartis to reach carbon neutrality for all of the purchased electricity across its operations in the U.S. and Canada-the first major step in reaching 100% renewable electricity across its global operations by 2025.
“By investing in additionality and new generation capacity, it allows for flexibility within the company,” Goudreau said. “Novartis, like so many other companies, continues to change size, location, and assets. If you design your renewable portfolio to be specifically applied to particular locations, you always have to account for whether you keep that location or not. Do you get a new location and if so, then what do you do? Or does the volume or carbon intensity at that location change based on what you’re producing? A VPPA gave us the flexibility to decarbonize our Scope 2 emissions from procured electricity, with the flexibility to account for movement.”
The company’s investment in additionality and emissions reductions has paid off. Within the first three months of 2020, the Santa Rita East wind farm reduced over 69,000 MT of carbon dioxide emissions and generated enough electricity to power more than 125,000 homes.
The company’s strategy of additionality and flexibility to reach 100 percent renewable electricity in its U.S. and Canadian operations is the same approach they are currently implementing in Europe.
“In Spain, there’s a relatively carbon-intensive grid mix as opposed to Austria, Switzerland, or Germany, where we have a good portion of our operations,” Goudreau said. “So, we focused on building a portfolio with different technologies, different locations, focusing on the highest carbon impact that we can have, and focusing on flexibility within the company.”
In 2020, Novartis signed five VPPAs to help the company achieve 100 percent renewable electricity in its European operations by 2023. The agreements marked a major milestone on Novartis’ sustainability journey to reach carbon neutrality across its operations by 2025 and across its supply chain by 2030.
The move made Novartis the first pharmaceutical company set to achieve 100 percent renewable electricity in its European operations via VPPAs. The first of those projects – the Tico Windfarm in Spain – is already online and providing carbon-free electricity into the Spanish grid.
“In any locality where we’re able to replace fossil fuel-generated electricity with renewables, there’s a direct impact on respiratory health,” Goudreau said. “Air quality improves, respiratory illness is reduced, and that’s meaningful. The more you can clean the air for the local community, the more you’re preventing illness–not just treating illness. That’s a shift in thinking over the last couple of years across the pharma and biotech industries and healthcare delivery systems–that with planetary health and patient health, it’s a preventative health approach. We can implement actions to reduce the chance of someone getting sick.”
As to those who are dubious about a corporate strategy that focuses on people and planet first, Goudreau says that Novartis’ approach has not only reaped myriad benefits across communities but has been beneficial for the company’s core business as well.
“For so many years, people perceived environmental sustainability efforts as mutually exclusive for running a profitable company, and it’s just not the truth,” he said.
For Novartis, environmental sustainability is aligned with its purpose to reimagine medicine to improve and extend people’s lives. Goudreau says that anything that contributes to the company’s core purpose makes sense.
“Quite frankly, a lot of things that people talked about over the years that might cost a premium, that might cost jobs, that might hurt the economy–the reverse has turned out to be true in many cases,” he said. “There are more renewable energy jobs being created than oil and gas jobs, so that’s job creation, that’s new revenue, that’s new infrastructure. At the heart of it, health and climate change are both systems issues. You have to understand the interdependence of the systems and how you can have an intervention for the greatest impact.”
Check out additional conversations with leading experts from across the industry in our Visionary Voices: Perspectives in Energy Series.
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