Investing in the Future – Green Power

On Monday, the EPA announced that Intel is the single largest corporate purchaser of green power in the United States putting the company at the top of EPA’s latest Green Power Partners Top 25 list, and also at the No. 1 spot on EPA’s Fortune 500 Green Power Partners list. A small team of Intel employees has been working long and hard to make this happen and at least one member of this team has been involved in this subject for 500Top.jpg

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So, what does this really mean? This is great news and very significant for those that follow the renewable energy market, but as I’ve pointed out in past posts on various subjects … there is always more to the story and especially in the public announcements that companies or 3rd parties make. I’m really proud of Intel for stepping up on this subject in particular and I’m proud to be part of the team that worked on it. However, I feel a little like Paul Harvey, because I want to tell you “The Rest of the Story.”

First some facts. What we actually announced is that Intel will purchase more than 1.3 billion kilowatt-hours a year of renewable energy certificates (RECs) as part of a multi-faceted approach to reducing our impact on the environment. Now, you just don’t go down to the corner market and buy 1.3 billion of anything. We had some key folks both internally and externally that gave us advice and helped us put the plan together. We made sure we received the best prices we could. We also specified only certified RECs. It was important to us to purchase a mix of renewable resources as well as make sure portions came from regions where we have significant factory investments and employees.

EPA sets a high-bar for green power because not all forms of renewable energy have the same positive impact on the planet. They define green power as electricity produced from solar, wind, geothermal, biogas, biomass, and low-impact small hydroelectric sources. The purchase will also be certified by the non-profit Center for Resource Solutions’ Green-e® program which certifies and verifies green power RECs provide the market mechanism for companies to credibly purchase green power from the U.S. grid system. Green-e® has a good description of how RECs work, how they are accounted for and how they help build a market for renewable energy on their website.

According to EPA, those 1.3 billion kilowatt-hours of green power has the equivalent positive environmental impact of avoiding the CO2 emissions from more than 185,000 passenger vehicles per year, or the equivalent electricity needed to power more than 130,000 average American homes annually. They also gave us a few other fun facts such as more than 114,721,000 gallons of gasoline or 2,350,450 barrels of oil consumed, but the one that stuck with me visually was a mile-long string of freight cars filled with coal.

One point I wanted to make (and what might get lost in the press) is that this purchase is only part of our long-term, overall approach that includes energy efficient products and a comprehensive energy conservation strategy in our operations. Our goal isn’t to always be #1 on this list (frankly, I know that at some point – maybe soon – there will be another #1 – that would be success in my book). We believe that by entering the renewable market in a significant way, we will help provide a real stimulus to the renewable market, spurring additional demand and ultimately, more green power and lower costs.

We will continue to look for new ways to conserve energy and reduce our climate or carbon footprint in our products and operations. Since 2001, we have had a special energy conservation capital funding program that comprehended some of the longer-term returns (savings) vs. short-term ROI. Through this program, we have invested more than $20 million in over 250 projects that, in turn, have saved more than $42 million and more than 500 MkWh. Conservation has always been our primary focus. It makes business sense that any investor can appreciate.

We know that the future requires commitment and investment. We’ve always invested in the future of our employees and factories. I guess this could be considered an investment in our planet. We’ve received an avalanche of support externally – even “agreed that this was a good strategy.” Only time will tell if this strategy helps truly drive additional availability of green power and lower costs for future purchasers.

We all realized this isn’t an end point, just a milestone on a long road.

20 thoughts on “Investing in the Future – Green Power

  1. I was very pleased to see Intel’s action with regard to “Green Power” today. I appreciate your reference to Paul Harvey. Some of those stories are truly amazing, and, as you point out, this forward-looking action by Intel is really not the end or rest of the story, either.
    I was not aware of Intel’s special energy conservation capital funding program. I also aqgree that by Intel entering the renewable market in a significant way, it will certainly help provide a real stimulus to the renewable market. Over the past number of years, I’ve spoken to quite a few companies who want to “look good” in the public eye, but are not yet willing to step up to the plate, as it were, and really make a commitment.
    Bauer’s Transportation, here in San Francisco, has some significant similarities. We’ve been in the process of “going green” for over a decade, and now have the largest private green fleet in the U.S. We provide a number of Corporate Shuttle programs, to companies such as Google, VM Ware, Linked In, Facebook, and others.
    I’m curious who, in the area of Corporate Responsibility or Public Relations, I could speak with to begin a dialog with Intel regarding going green, corporate responsibility and sustainability. This is such an important area. We believe we are helping to save the environment one mile at-a-time.
    Thanks very much.

  2. While this is wonderful news for Intel, and I don’t mean this as a criticism at all, but I noticed that it is still only 46% of the total power used (compared to 100% for PepsiCo, among others) – wouldn’t that be a better metric? (please correct me if I am wrong).
    In that sense, as well, Intel has room for improvement – and as you point out anyway, Dave, its not who’s #1 that matters.

  3. DB – thanks for the question.
    Right now, the supply of green power in the US is somewhat limited and it would be difficult to piece together enough RECs to meet our total consumption without adversely affecting the market for other customers. It might be do-able but it would also be at a significantly higher cost. Our intention was to promote the market, create demand and stimulate more investment.

  4. Hi Dave, this is a generic question not specific to green power. In these times of economic slowdown where certain industries face huge impact on their revenues leading to bankruptcy and acquisitions, does the focus on triple bottom line still hold the same importance as it does in good times? How much attention would the top management actually pay to “being responsible” during these trying times? The WEF discussed Climate Change as one of the core topics which was commendable. However, the Secretary of State from the United States had very little to contribute to the topic in her long address to the audience. It was mostly economics and diplomacy. So would this apply to Corporations as well?

  5. That is a scary proposition indeed, Sindhu. When things are going good, people pay attention to Al Gore. When the economy and its (often imagined) problems take center-stage, will these issues take a back seat? What can we do to ensure they do not?

  6. Intel has done what the Congress and the Exectuive branch of Government were unable to agree upon in the most recent Comprehensive Energy Bill, namely ensure that utilities will purchase a significant portion of their energy from green sources. It is a great investment in renewables, and hopefully other companies will follow in Intel’s pioneering footsteps.

  7. Commendations to all for the investment in renewable energy. Let’s go further and make the ugly roofs of our buildings green. At several hundred-thousand sq. ft, they could hold a multitude of solar panels for power generation or water heating. Or install a “Green Roof” to filter stormwater, absorb heat, and prolong the life of the roof.

  8. I had a question about some information that wasn’t in your your blog. Just how much money (dolars) are we investing (the extra we pay for REC power) in REC power this year?

  9. Why is it that using solar cells especially in Folsom has been considered as unviable? If solar homes are gaining favor in the marketplace, what prevents us to utilize it on site. Are there intrinsic differences between powering a home versus a large office building that prevents this?

  10. David’s suggestion of solar panels on our roofs keeps coming up in blogs. Is it a better use of our cash to build our own green energy source and manage it ourselves, or to promote the building of an open market and supply for green energy provided by companies that specialize in that and can deliver green power cheaper than we could do for ourselves? If it were worthwhile to put solar panels on our roofs we could lease out our roof space to a company that specializes in solar power generation to do it more efficiently than we can. By being responsible about how we invest we are ensuring that Intel is not a fair-weather envrionmentally friendly company and can continue to be consistent about our corporate responsibility.

  11. David, Thanks for the post. I am pleased to see Intel buy green power (46% is quite substantial, but will love to see us use 100% green power when feasible).
    Regarding your comment – “Our intention was to promote the market, create demand and stimulate more investment.”
    My question is why dont we enter this market ourselves (eg. solar cell manufacturing)? When somebody asked PaulO this question in an open forum, he mentioned that we pursued this option through a new business initiative and found out that it was just not feasible.
    – the silicon is different
    – the processes are different
    – not enough raw materials available,
    Can’t these issues be worked around? Should CTG/TMG labs be looking at this instead of Intel Capital?

  12. Dave, congrats on the launch of the environment site and the big carbon offset announcement. I especially appreciate your comment that this isn’t the end of the road, its a milestone, and it is certainly one worthy of celebrating. Keep up the great work.
    You might also enjoy reading my recent post, “Intel welcomes the green spotlight.”

  13. As the manager of energy supply for Intel, I was involved in most of the evaluations and considerations mentioned above. There are lots of good questions and suggestions above. Let me provide some additional details.
    First, we have evaluated solar at most locations and unfortunately, due to economics, efficiencies and space requirements, we have not yet approved a physical project. However, we are continuing to do evaluations and look for opportunities, and I am hopeful we will see some approved in 2008. As referenced above, we did look at our Folsom site and many other locations, last year. The general scope had panels covering 2-4 buildings which was enough power to supply ~2% of the power used by the Folsom Site. The economics, with all the federal, state and local incentives still was a very negative 10 yr ROI, including an annual escalation of current electric prices. This does not mean it won’t ever get approved, but we are looking at all the opportunities worldwide, and will focus on the ones that make the most sense for Intel.
    Also mentioned is using our roofs for some else to build… lease them. We have and continue to look at someone else installing and operating them on our roofs and selling us the power. There are some additional issues with liabilities, risk of access, etc but still this continues to get reviewed. We are looking closer than ever at all the options and as you can see by the announcement Monday, we are making progress. As Dave so perfectly said “this isn’t an end point” but it is a milestone on the road. The market, opportunities and technologies are rapidly changing and we want to ready.

  14. I’m not a believer in “global warming” but it can’t be argued that there is “climate change” occuring in the world. While data supports that our technology has some impact, most of the lay public do not understand that Earth’s climate has never been at equilibrium if you look at a cosmic timeline.
    That being said, I still think it’s great that Intel is being a role model by pitching into the renewable energy fray. Just think, 100 years from now, the focus will be purely on reducing energy usage. Whether the energy is derived from solar, wind, oceans or protons, the process of using energy usually has undesired by-products… 8)

  15. Global warming is the apocalyptic scenario du jour. Interestingly, many solar researchers will tell you that we are entering a
    period of low solar activity and that next two solar cycles (or more) will be much lower. Reduced solar cycles
    have been hypothesized by many to have much more of a robust effect on climate than commonly believed by mainstream
    science. Some solar scientists even predict the earth is entering a period of grand minima akin to the Maunder, Dalton
    or Sporer Minimums during which it was common to have little ice age type conditions. The current La Nina conditions
    can easily be linked to a lengthening Solar Cycle 23 and the resulting cooling oceanic temperatures. Earths climate has
    already reacted more robustly than anyone could’ve predicted a couple years ago.
    Now there are many many reasons to “go green” as they say, but Global Warming is not one of them. When the next
    Ice Age comes, mankind might just wish they’d have pumped a little more CO2 into the atmosphere. The earths climate
    has always been highly variable, subject to swings between cooler and warmer conditions. It will continue to do so, regardless
    of whether or not Intel purchases “Green Power”. However it does make a nice PR campaign.

  16. Mark and Jerry: I really appreciated your comments. I’d say that I personally subscribe to the philosophy of environmental impact minimization, but not the religion of environmentalism or global warming scare tactics. Rather than try to enter the scientific debate, I choose to see the processes and products that are designed to benefit the environment as elegant, efficient, and therefore ultimately superior options. It’s the fact that it appears that much of society is now leaning toward this viewpoint that most excites me.
    “Green power,” to me is just the elegant choice. I applaud Intel for its decision to power almost half of its US activities with cleaner, smarter power. Good PR is just the result of doing something smart enough that it becomes worth talking about.

  17. I suppose it was inevitable that this blog attract members of the (very small) global warming denier community. For those interested in global warming science by actual climate scientists, may I point you to a great blog: where much of the discussion is in rebuttal to arguments such as those above on solar cycles.
    Also good resources at this link, “How to Talk to a Climate Skeptic”

  18. This is great to see Intel making this step. It is especially good timing given the recent negative publicity. The one question that I have is why we have not invested in solar power for ourselves. We have very large buildings with large roof tops. Now that home versions of solar collectors are more common, why don’t we add some to our very big build tops and make some of our own power? Especially in AZ where we have sun 90% of the year.

  19. This is a step in the right direction but it is far from making Intel’s business sustainable into the future. Some of the comments above are right on target. Here in Arizona I watch as water pools after heavy rains only to evaporate in several days time. This water could easily be collected in a cistern and reused for landscape watering year around. The tops of the buildings are a perfect place to install Solar Water Heating systems (far more efficient than solar electric cells) which could then be turned into steam to run generators. 300 days a year of Sun is more than enough to subsidize our power needs in Arizona and potentially sell some of it back! Another point is the ridiculously low office temps maintained 24/7 in our building here in the summer, why hasn’t someone addressed this? Intel’s business efficiencies need to be integrated into every part of its business footprint; not just those that can be purchased easily like RECs.

  20. I’m very Happy to see that Intel is at least making an effort to utilize Green Resources in manufacturing their product that most everyone uses on a daily basis.
    I would love to speak to Marty Sedler and offer a better solution to providing those electric needs that Intel is looking for… I have an alternative green generating method available.
    ~Lions Power & Electric~

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