Energy
Coats aims to source renewable energy wherever that is feasible and is looking to expand its renewable energy generation which has grown from virtually zero to 28% in the last six years. There is already solar generation capacity at its Patrick Yarn Mill site in North Carolina, US and at Ambas, Southern India, which also has a biomass-based steam boiler.
Leader's Voice
“The risks associated with climate
change continue to grow and
the window of opportunity
for reducing damaging global
warming is closing. While we
have considered aspects of
climate change risk discretely,
we now regard climate change
as a unitary Emerging Risk
which is reviewed at Board level.
We are also looking closely at
how we can report progress
transparently and in line with
the recommendations of the
Task Force on Climate Related
Financial Disclosures, Addressing
energy consumption and the
sources of energy used in our
business are therefore very high
priorities for us.
Having done a lot in terms of
reducing energy use in prior
years we need now to focus
on real-time optimisation of
demand and will be running
pilot programmes for this
in 2020. We have made
significant progress in 2019 on
renewable energy, with a new
onsite solar array in Vietnam
and negotiations underway in
other locations. We have been
progressively transitioning off
coal as a fuel source, and this
was completed during 2019.
While climate change is a major
driver for our energy strategy,
it is also very important in
terms of cost management as
energy is a major cost driver in
our processes. Clearly reducing
energy consumption generates a
direct benefit, and we have also
found, so far, that transitioning
to renewable energy can be done
without a negative cost impact.”
Kevin Finn
President, Business Operations
Energy Strategy
Most of our energy use is for powering motors in our process equipment or for heating used in those processes. The split between the two uses of energy is (2018 in brackets) 55% (55%) for electrical energy used for process power and 45% (45%) for fuels used for generating heat. Most of the heat energy is used during dyeing processes, along with a substantial part of the electrical energy, which therefore makes this our most energy intensive process. Spinning and twisting, which are very significant users of electrical energy account for most of the remainder, with finishing winding and yarn coating processes and ancillary activities such as warehouses and offices making up the total.
Our targets for the energy pillar are two-fold; to reduce energy usage intensity by 7% by 2022 against our 2018 baseline (compared to a 22% reduction in the six years up to 2018), and to shift the sources of our energy much more towards renewables by 2022. During 2019 we have been assessing the scope for accessing renewable energy across our operational footprint and we will complete this work in 2020. The situation varies from country to country and is also changing rapidly. We are proposing to increase the use of biofuels in our operations and to enter more long-term Power Purchase Agreements (PPAs) for onsite and offsite renewable electricity generation projects.
Up to the end of 2019 we have undertaken detailed energy surveys across a number of our larger units that account for 29% of our energy usage, and a large number of detailed energy saving plans are emerging from those surveys, most of which will be implemented in 2020. During 2019 our energy usage intensity dropped by 1% against 2018 on a like for like basis, having restated 2018 to remove Crafts NA and to incorporate Gotex and Patrick Yarns. We expect the rate of reduction in 2020 to be higher as the new projects are implemented.
During 2019 we signed an agreement for a 1 MW on-site solar installation in our Ho Chi Minh plant in Vietnam, which was installed and started functioning in October. We are currently negotiating additional long term supply agreements in the Americas and Asia.
Sourcing renewable energy where possible
Our target is to increase our
use of renewable energy mainly
through projects with suppliers
where we contract with them
the creation of new renewable
generation capacity, through long
term purchase commitments. In
this way we are able to ensure
that the renewable energy we
are using is additional new
capacity and hence actively
contributes to de-carbonising
energy supplies. The renewable
energy market is developing very
rapidly at the moment, and there
is some variation in the quality of
suppliers, so it is important that
we do a lot of due diligence on
the partners that we are working
with, and that our contractual
terms ensure that we have any
rights to Renewable Energy
Certificates or other equivalent
attributes.
7% Reduction In energy intensity (Kwh/Kilo) by 2022
Having an Energy Management
System (EnMS) in place is the
basic requirement for taking a
structured approach to achieving
energy efficiencies. We have
a programme to progressively
implement an EnMS aligned
to ISO 50001 in all of our key
manufacturing sites over the next
3 years. This programme is based
on the work that we have already
undertaken in our Romanian
plant, which has been developing
a comprehensive system over the
last 18 months, with considerable
success. Through the EnMS and
with more meters strategically
located in plants, we will identify
all the significant energy users
in our plants and develop the
options for optimising energy
use in those processes. At the
same time we are continuing
to implement the opportunities
that were identified from the
energy audits that were done
in 2018. These energy audits
were useful in highlighting
some opportunities, but are a
snapshot assessment and are not
as effective as having continuous
management of actual energy
demands.
Less energy and more efficiency
In 2019, we used 770 million kWh of
energy (electricity and fossil fuels) to
manufacture our products. This equates to
a reduction of 3% in total energy compared
to last year. Our energy use per unit of
production has also reduced to 9.3 kWh per
kg of production, (2018: 9.4 kWh per kg).
This is a reduction of 1% vs 2018.
As for water, we have restated 2018 to
provide like-for-like comparison with
2019. Full historical data is shown in the
data table.
Over the last twelve months we have
continued to invest in new technology and
processes, and stepped up our focus on
energy efficiency, finding ways to improve
our productivity whilst reducing our
energy use. Over the last 2 years we have
undertaken detailed energy audits
At each of those sites we are working on
tailored energy saving plans, most of which
will be implemented in 2020. These include
energy saving opportunities ranging
from increasing metering, to equipment
replacement to optimise energy savings, to
new waste heat recovery processes.
At the end of 2019, we had our first
pilot site certified to ISO 50001. This is
the international standard for Energy
Management Systems, created by
the International Organisation for
Standardisation. The standard specifies
the requirements for establishing,
implementing, maintaining and
improving an energy management
system and continual improvement of
energy performance, including energy
efficiency, energy security, energy use and
consumption.
And these efforts are paying dividends, in
Mexico, following a recent energy audit, we
identified 24 energy conservation measures
totalling potential savings of 32% of the
total energy use. The top 4 measures have
been implemented, which included boilers
optimisation, improving chilled water pump
requirements, reducing the pressure for
compressed air provision, and avoiding
using large well pumps during peak
demand periods.
In Bangladesh, two of our sites focussed
on heat waste recovery processes both
from the boilers’ exhausts and from the
water jackets of the gas generators. Both
sites saw a reduction in energy used, one
site successfully reduced their fossil fuel
use by 12% whilst the other was able to
reduce their energy use intensity from 5.36
kWh per kg of thread to 4.71 kWh per kg.
Investment in renewable energy
Over the past year, in line with our
intention to be using renewable
energy whenever that is possible, we
have continued to both review the
opportunities to install renewable energy
generation facilities on and off our sites
and purchase those Renewable Energy
Certificates (RECs).
Just under a third of the energy we use
comes from renewable energy sources.
Our assessment has shown that we
could significantly increase this, and we
are evaluating potential targets over the
coming months.
We have several rooftop solar arrays
now operating on Coats sites and most
of these are through long term PPA
arrangements. We are finding this to
be a very effective way to establish new
renewable energy capacity rapidly and
are evaluating potential partners in a
number of countries. We have also found
that there can be unexpected hurdles,
especially in markets that are liberalising
their energy markets. In Mexico we
were quite advanced in discussions on
a large off-site wind energy PPA when
an unexpected change in approach by
the government effectively halted the
project. We are currently working on a
new project proposal for Mexico, and also
exploring projects in India and Indonesia.
We have adopted a diversified approach
that enables us to be flexible depending on
the type of renewable technology available. For example, at our Tamil Nadu site in India,
we have chosen a solar plant. This plant
provides 3.7% of the energy we need
for both our sites in Ambas and Madurai,
approx. 150 kWh per day. Another 90% of
the energy we need comes from renewable
energy generated offsite and is provided
by the Tamil Nadu Electricity Board. In
the coming years, we are aiming to add
another 750 kWh to our solar plant here.
We are also proposing to increase the
use of biofuel in our sites alongside
entering more long-term Power Purchase
Agreements (PPAs) for onsite and offsite
generation of renewable energy.
Reducing our Greenhouse Gas
emissions
As a significant user of energy, climate
change and our emissions of greenhouse
gases (GHGs) are a key concern for us.
In 2019, the total carbon footprint of
our operations (Scopes 1 and 2) was 275
thousand tonnes. This is a 5% decrease
compared to 2018 on a like-for-like basis.
We have reduced the energy we use and
continued our transition to renewables
sources.
Our emissions intensity, measured in
kilograms per kilogram of production,
went down by 3% compared to 2018;
3.3 kg CO2e per kg compared to 3.4 in
2018. Again, we have restated 2018 to
make for a like-for-like comparison. These
calculations are done on a location basis.
We have been progressively eliminating
the use of coal in our factories. In 2011
coal accounted for 3% of our direct
energy use and for 2019 overall this had
been reduced to 0.4%, with coal use
being terminated by the end of the year.
