As a new RE100 leadership paper sets out guidance for companies everywhere to show leadership on renewable electricity, we talk to Kevin Rabinovitch, Global Vice President of Sustainability, Mars – the first US company to step up and join RE100, back in 2014.
Why is Mars going 100 percent renewable?
"When we established a formal, global sustainability team in 2007, we decided that we would rely on science to guide our GHG emissions reductions. At that time, we only had good data for Scope 1 and 2 emissions, so we set an initial goal for our direct operations – recognizing that was where we had the most control and influence.
Anticipating that working beyond our factories and offices would likely be more challenging than our own operations, we decided to over-deliver against what the science said was necessary in our direct operations – leading to our goal of 100 percent renewable emissions by 2040. Setting and working to achieve this goal pushed us to understand the dynamics of advancing renewable use at scale.
With the cost of renewable electricity coming down rapidly, the business case for switching to renewable electricity is good and becoming stronger. Mars’ long-term renewable electricity contracts are allowing us to achieve cost parity, and in some cases, significant long-term cost savings as well."
Mars was one of the first members of RE100 – why was it important for Mars to go first?
"Every movement needs a group of first movers and we believed we had the capability to step up. We were one of the early leaders of RE100 and made a commitment to 100 percent renewable electricity use in our direct operations.
Now there are 140 companies committed to RE100. Through RE100, Mars is joining with other like-minded companies to share key learnings and help inspire and encourage others in our industry to lead the change towards a low-carbon future."
What are your achievements so far?
"Momentum in this space has been greater than we anticipated. We’re already using or purchasing renewable electricity to cover 100 percent of our operations in Austria, Belgium, the Czech Republic, France, Lithuania, Poland, Spain, the United Kingdom and the United States. We’re also adding Mexico in 2018.
We recently finalized a long-term contract that will enable us to procure 100 percent renewable electricity in Australia starting in 2020. We’ll be an off-taker of a 200MW solar project in Ouyen, Victoria. The total project will include approximately 125,000 solar panels from which Mars will procure approximately 43MW annually.
Mars, in partnership with Total Eren, will play a role in reducing Australia's reliance on fossil fuels – the power generated at the Kiamal Solar Farm will be supplied to the national grid, thereby increasing the ratio of renewable energy in the National Energy Market.
Our approach to renewable electricity comes to life in a variety of different ways around the globe, from on-site renewable generation to annual electricity supply contracts in Europe, to signing long-term, country-level Power Purchase Agreements (PPAs). in places like the United States, the United Kingdom, Mexico and Australia. These projects create new market demands and help expand renewable infrastructure across the world.
Since producing energy is not one of Mars’ core competencies, we do not invest our own capital in renewable electricity projects. Instead, Mars forms long-term partnerships with organizations that can invest the upfront capital required and purchases the electricity output from the projects through a long-term contract to minimize risk and maximize financial returns over time.
While a lot of companies prioritize fixed price agreements and shorter contracts, Mars prioritizes long-term contracts in an effort to achieve cost parity, or better, over time and retain ownership of renewable attributes (such as RECs or GOs). Since there is also less risk associated with long-term contracts for our partners, it is a win-win for both us and our suppliers."
What plans do you have for switching more of your electricity use to renewables?
By the end of this year we’ll have 10 countries where we use or purchase renewable electricity to cover 100% of our operations. We expect 36 percent of Mars’ global direct electricity use to be renewable by the end of 2018. This does not include our latest contract in Australia, which will not begin sourcing electricity from solar power until 2020 – but when it does, it will power 100% of our Australian operations.
Click here to read the RE100 leadership paper ‘Business Leadership in the Transition to Renewable Electricity’. Coming soon: part 2 of this interview, where Mars will share with us the challenges and business benefits of working towards 100% renewable power.