Novartis has set ambitious targets when it comes to reducing its impact on the climate, waste and water, and its climate goals meet the criteria of the Science Based Targets Initiative. Specifically, by 2025 Novartis aims to be carbon-neutral in its own operations, while by 2030 it aims to be carbon neutral across its value chain, as well as plastic neutral and water sustainable. More recently, the company announced a target to achieve net zero carbon emissions across its value chain by 2040.
In November 2020, Novartis announced the signature of five Virtual Power Purchase Agreements spanning ten or more years. One of these agreements involves the company acquiring around 78 MW of renewable energy from Enel Green Power over 10 years.
The pan-European agreement will help the company to achieve its goal of 100% renewable energy and carbon neutrality for its European operations by 2025. The energy supplied will be produced at the 179.9 MW TICO wind farm in the province of Zaragoza, in Spain, which will be operative from the beginning of 2022. In this way Novartis will avoid the emission into the atmosphere of around 96,400 tonnes of CO2 each year.
In a pan-European VPPA, a company purchases renewable electricity generated outside the electricity market of their electricity load. Novartis opted for this innovative solution because of its fluid European footprint which consists of numerous locations with different energy needs. The virtual pan-European VPPA not only allows the aggregation of demand from multiple countries but also provides flexibility in the event of any changes in the size or location of the company’s facilities.
By procuring electricity from the Spanish wind project, Novartis is leveraging one of the highest onshore wind load factors in Europe. This is in turn reflected in the lower levelized cost of energy and more cost-effective renewable electricity production.
The other important factor in the decision-making process was the GOs treatment. The clear definition of a market boundary in Europe allows Novartis to make evidenced carbon reduction claims from renewable electricity procured through this VPPA. In particular, under Spanish domain protocol, both power producer and/or retail licensed supplier can cancel the GOs on behalf of the corporate buyer and cancellation of GOs can be done in excess of in-market load. Moreover, GOs issued in Spain can be easily exported and canceled in all AIB (Association of Issuing Bodies) member countries. This allows Novartis to claim and report renewable electricity procurement for all generation affiliated with this VPPA.