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Energy
We believe that the most pressing environmental threat is climate change, caused by increased levels of greenhouse gases (GHGs) in the atmosphere. Carbon dioxide (CO2) is the principal greenhouse gas and is produced when fossil fuels - gas, coal and oil - are burned, mainly to produce heat and electricity for homes and industry and as fuel for transport.
We use energy in our factories and for distribution of our products. In 2001 our consumption was 1,774 GWh - about the same as an Italian town of 400,000 people or a US town of 150,000. Although our total consumption is relatively low in global terms, we are determined to do all we can to reduce our impact.
Our goal is to ensure that our operations will not contribute to climate change. We have therefore set the highly ambitious goal of becoming CO2 neutral by 2010. We intend to achieve this in the following ways:
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our target is to reduce total energy consumption by at least 5% a year for each million dollars of added value (i.e., sales revenue minus purchasing costs) by increasing energy efficiency; |
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we plan to buy a greater percentage of our energy from heat and power plants, which are more efficient and emit less CO2 per unit
of energy, and from renewable energies such as wind and solar (zero CO2); |
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we aim to neutralize the remaining carbon emissions by creating carbon sinks through reforestation. |
For a typical semiconductor manufacturer, electricity can be the largest single expense - in 2001 it was 1.7% of ST’s net revenue. If the improvement in energy mix foreseen for 2010 is achieved (65% cogeneration, 30% conventional, 5% renewable), this will allow us to reduce CO2 emissions for each million dollars of added value by more than 80% from the 300 tonnes in 1990 to only 60 tonnes in 2010.
We estimate that overall CO2 savings of more than 10 million tonnes can be achieved for the period 1994-2010, with company-wide energy savings of M$900 for that period.
Environmental neutrality
CO2 Savings 1999-2010: 8.5 MTonnes
ENERGY EFFICIENCY
Energy consumption performance in 2001 was dramatically affected by the market slow-down and the marked fall in the price of our products. While total production decreased by 2% compared to 2000, the added value fell dramatically by 15%. This has increased our total energy consumption in relation to added value. Nevertheless, our energy efficiency measures produced savings of around $60 million in the period 1994-2001.
ELECTRICITY CONSUMPTION
CONSOLIDATED ENERGY BREAKDOWN
The chart above shows the energy breakdown of manufacturing sites: 71% of total energy used is directly related to process tools and air conditioning of clean rooms. Clearly these areas are the most significant ones to investigate for energy efficiency opportunities.
Increased energy efficiency could result from a change in management strategies, redesigning tools or support systems, or replacing components with more efficient alternatives. More than 350 energy efficiency actions have been identified and will be implemented over the next three years. These actions will contribute to an annual saving of more than M$11.
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A “free” chilling system (free cooling) - using evaporation in cooling towers - enables us to produce chilled water for process cooling and air conditioning systems without the need for energy-intensive equipment.
This was first implemented in our Agrate site two years ago. Conventional cooling costs about $15 for 1MWh, while the Agrate system brings the cost down to just $3 per 1MWh. Total savings in Agrate alone are around k$500 a year. Payback is between one and three years, depending on the weather. We are planning to use similar systems at sites that have the right weather conditions. |
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Equipment needed to control air quality inside our manufacturing sites uses a lot of energy. We have found that design changes can produce considerable savings with a short payback period. |
USING COMBINED HEAT AND POWER PLANTS
Conventional power stations that burn fossil fuels give off a lot of heat, wasting as much as 70% of the energy they consume. We are starting to use a more efficient generating technology that uses a system known as combined heat and power (CHP), or cogeneration, that captures most of the waste heat and uses it to make steam or provide heating.
ST aims to source 65% of its electricity from combined heat and power energy by 2010. Electricity from conventional sources will be reduced to 30%.
EXAMPLES
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At Catania in Italy, we intend to buy electricity, heat and cooling from a new gas-driven CHP plant being built close to our site. This will cut CO2 emissions at this site by more than 50,000 tonnes a year. |
RENEWABLE ENERGY
There is a lot of energy in the wind and the sun. While new technologies are clean and the power endlessly renewable, they are a lot more expensive than fossil-fuel technologies at current prices. Wind power can be competitive in certain windy areas. The cost of solar power is falling as the technology improves and demand for solar cells increases. Pilot projects in both wind and solar energy have been started at ST.
EXAMPLES
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In 2001 we installed a 35kW PV system on the façade of a new office building at our Grenoble design center. It will produce 28MWh a year - 1.5% of the building’s total demand - and reduce CO2 emissions by two tonnes a year. The total investment is k$190. 80% of the total cost (k$152) was financed through government grants. |
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Wind farm opportunities are being investigated in France, Italy, Switzerland and the United States. A Memorandum of Agreement has been signed with a French company to develop a joint project in France in 2002-2003. |
CARBON SINKS
Burning of fossil fuels is responsible for about 80% of global CO2 emissions. Since the industrial revolution, atmospheric concentration of CO2 has increased by 30%. These emissions are altering the natural balance of the global carbon cycle.
ST and Stephen F. Austin State University (SFASU) in Texas, USA are implementing a reforestation project in East Texas where initially a total area of 530ha has been planted. The goal is to optimize carbon sequestration while maintaining a sustainable, healthy forest. ST will purchase and prepare the land and plant the trees under the technical guidance of the university. Students will collect data on carbon sequestration.
ST will hold the land for one year from the time of purchase and then donate it to SFASU. The land will remain as a permanent forest. ST will maintain ownership of carbon credits associated with the land and provide funding for land and timber management costs until the first thinning (after 17 years). ST will have the right to use the forest as a recreation area for an unlimited period of time, provided there are no adverse effects on the safety and health of the forest or on people. Timber revenues will be reinvested in land management and net profits from timber revenue will be given to the university.
CARBON STRATEGY
We are in the process of fine tuning our strategy on Carbon dioxide in order to be consistent with the implementation of the Kyoto Protocol and associated mechanisms (Clean Development Mechanisms and Joint Implementation). We have started on a Carbon (GHG) report with historical data, details and excerpts based on our calculation methodologies.
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Carbon dioxide is released into the atmosphere through plant and soil respiration, diffusion from oceans, and by human activities. In the long term, the absorption and release of carbon is more or less in balance except for slow changes in geological time scales. However, human activity is disturbing this cycle with the annual release of six to seven billion tonnes of carbon. Part of this additional carbon is accumulated in the atmosphere, leading to increased concentrations of greenhouse gases. Some is taken up by enhanced plant growth and the oceans.
Carbon is taken from the atmosphere by plants through respiration, as part of their life support process. Photosynthesis by plants uses light energy to convert CO2 and water into carbohydrate (which contains carbon) and oxygen. Plants use carbohydrate in cell tissues as they grow, and consequently some of the carbon from the atmosphere is transferred to the living system. Plant respiration converts carbohydrate and oxygen into CO2, water and energy. Where photosynthesis exceeds respiration, the net carbon is stored (sequestered) in the plant biomass. Because forests sequester carbon, it is generally recognized that they can be used in global efforts to combat the threat of climate change.
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