"Our 144,000 employees come to work every day with a passion for green growth": Xavier Houot, Schneider Electric

Reading time: 4 minutes
11 December 2017

With Schneider Electric announcing it is joining both The Climate Group's RE100 and EP100 initiatives this week, we spoke to Xavier Houot, SVP Global Safety, Environment, Real Estate at Schneider Electric about why the European multinational corporation is taking a dual approach to energy, on its journey towards achieving its ambitious overall goal of carbon neutrality by 2030.

Why is Schneider Electric going 100% renewable?

“Our 144,000 employees come to work every day with a passion for green growth. Some of them work to design innovative low-carbon technologies, energy efficient architectures, or circular business models. Others meet customers each day, support their resource productivity ambitions, and enable their journey towards zero emissions. Given this, we could not do less than align with this passion in the way we power our own sites and operations.

“Also, while we recognize the massive challenges to meet a two degrees Celsius trajectory, we are on the side of the “activists” as our CEO states, and not of the “pessimists”. We believe solutions exist, and they have to start with each of us, each of our companies.”

How did you decide on your 100% goal?

“Ahead of COP21 in October 2015, our CEO already spelt out our company’s commitment to achieving carbon neutrality along our extended supply chain by 2030. To help deliver on this, we have multiple programs covering eco-design, responsible sourcing, and low-carbon transportation, with as much quantification of avoided CO2 as possible for our customers, achieved through our own technologies. Naturally, our own electricity consumption had to see its CO2 footprint brought down to zero as well, therefore this 100% goal makes business sense.”

What have you achieved so far?

“It is fair to say our focus over the last 20 years has been mostly towards energy efficiency rather than adoption of renewables. We have been reducing our energy consumption by 10% every three years for more than a decade, and were recognized and awarded for this, saved costs, while showcasing our own technologies.

“This being said, a number of our sites have already implemented on-site renewable electricity capacities. Over the last 12 months only, we equipped several factories in India with on-site solar generation capacities. We did the same in Thailand, in China, and in France at our headquarters where a blend of on-site solar and geothermal cover a portion of our electricity requirements. We also currently have long-term Power Purchase Agreements (PPAs) in North America, India, and the UK.”

What plans do you have to switch to renewable electricity in future?

“The journey will be a stepped transition, depending upon local conditions, cost, availability of support, and our sites’ own requirements. Firstly, we will increase on-site projects, and then, we will sign long-term PPAs. Thereafter,  we will procure renewable electricity certificates to bridge the gap each year between the first two options and our target.

“We aim to reach 80% of our electricity from renewable sources by 2020, and the subsequent 10 years will see a sustained growth of on-site and PPA sourced electricity, which will reduce the weight of  certificates in our renewables mix; we will also cover remaining countries, and bridge the remaining 20% gap.”

What challenges and opportunities are you experiencing?

“We see multiple opportunities. We will showcase our own EcoStruxure solutions and technologies (inverters, transformers, medium voltage cells, software and connected objects), to enable solar panels and other energy generation sources, and manage power distribution and create micro-grids wherever relevant. We will allow our customers and business partners visiting our sites to see and believe that energy efficient and low-CO2 buildings are now fully possible and financially viable.

“Other opportunities are, in various projects, short-term cost savings when renewable electricity becomes cheaper than when procured via the grid. With longer term contracts, we ensure higher predictability of future electricity costs as well. This being said, we need to recognize this initiative comes with long-term contractual commitments (on electricity procurement), and the sublease of our roofs and premises to third-party project developers, and it is fair to recognize that it reduces the agility of our energy supply decisions.”

Why do you think it is important for companies to help increase demand for renewable energy?

“Firstly, businesses need to appreciate that they represent half of the world’s electricity consumption – collectively they can make a real difference through their own purchasing power. Also, in the last year, we witnessed a strong acceleration of the readiness of technology, as well as its affordability, and the “offer” side has gone up significantly.

“We also have a collective responsibility: current extrapolations of the world economy’s CO2 trajectory is more in the plus three to four degrees Celsius range, and a lot needs to be done, fast, to improve on this. Such a renewable energy transformation is a key step in this direction.”

Why do you think RE100 is a good initiative to join?

“Firstly, Schneider Electric values peer-to-peer learning opportunities, and we believe such a topic deserves open collaboration, emulation, sharing. In addition, we trust The Climate Group’s ability, together with their partners CDP on RE100, to bring together key stakeholders from business, governments, and civil society, to help trigger rapid changes towards a better climate.

“We also strongly believe that fast adoption of renewable electricity will absolutely depend upon countries’ tax and subsidies strategies, and we see the positive value in national policies and favourable schemes. RE100 is a perfect platform for committed organisations to share their practices, and have a stronger voice in the overall decarbonization of our global economy.”

What else are you doing to drive a net-zero emissions economy?

“Overall we believe that halving global CO2 emissions by 2050 is possible, before moving towards a net-zero, and then carbon-negative, world by the end of the century. This being said, this will require massive transformations, from consumption practices to production patterns, from technology adoption to public policies, and no time can be lost.

“On our side, our 2030 carbon neutrality goal, for our extended supply chain, will be met through sustained aggressive eco-design, strong circular economy innovations, renewable electricity adoption, sustained growth of services revenues, sustained innovation on energy efficiency technologies, and, maybe most importantly, the conservation of resources by each and every one of us.”

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