Energy efficiency measures help reduce about 20’000 tonnes of CO2 emissions of multinational dairy producer
Through the “Energy-as-a-Service” business model, the German ESCO ENCORE Efficiency, with the support of specialist funding arranged by Solas Capital, has implemented 27 energy efficiency projects across a large number of a dairy producer’s processing sites. These projects have resulted in a yearly reduction of approximately 100 GWh in energy consumption, energy cost savings of EUR 4m and a decrease of 20’000 tonnes of CO2 emissions, entirely without upfront capital investments from the dairy producer.
As the race towards net-zero intensifies, industrial manufacturers are increasingly focused on their path towards an emission-free operation of industrial plants. The implementation of energy efficiency measures within the industrial sector is, however, often delayed due to the associated capital expenditures and the potential additional burden on the balance sheet. Thanks to the collaboration between Energy Service Companies (“ESCOs”) and financial partners, energy off-takers can use the “Energy-as-a-Service” model to implement CO2 and cost-reducing measures without upfront investment costs, structured such that the service is off-balance sheet. This model not only reduces financial burden but also leverages the technological expertise of ESCOs, making them the ideal partners for off-takers in their journey towards net-zero.
Via this “Energy-as-a-Service” business model, the German ESCO ENCORE Efficiency has implemented a wide array of energy efficiency measures for a multinational dairy producer. Across the projects at production sites in Belgium, the Netherlands and Germany, these efforts have significantly increased the efficiency of the off-taker’s utilities, resulting in a yearly reduction of approx. 100 GWh in energy consumption, energy cost savings of EUR 4m and a decrease of 20’000 tonnes of CO2 emissions. Through a bespoke financing partnership with Solas Capital, the retrofits of the production sites were realised without capital expenditure from the off-taker. The associated customised private credit solution is amortised over the life of the projects through the achieved energy savings, and the financing is structured to accomplish a fully off-balance sheet treatment of the service.
As an example, one of the key technologies implemented at the dairy producer’s sites is the installation of efficient compressed air units. While compressing air, the equipment generates heat, which is typically wasted, because the installations are hydraulically not very efficiently designed and controlled. However, with the right equipment and expertise, the heat produced can be distributed and used or stored for longer periods of time and used to make ancillary heating processes more efficient. By working with ENCORE Efficiency to replace three traditional compressed air units with two efficient air compressors on one production site, the dairy producer was able to significantly lower its carbon footprint and reduce CO2 emissions by over 170 tonnes annually. Other innovative projects, such as industrial heat pumps combined with very efficient modern refrigeration systems or electric steam boiler systems, lead to even higher CO2 and energy savings.
Overall, ENCORE Efficiency has identified more than 300 individual energy efficiency measures across the dairy producer’s processing sites, many of which ENCORE Efficiency expects to implement over the next 5 years. Given that the dairy producer processes billions of kilograms of milk annually into a wide range of products, the potential for efficiency improvements, and consequent CO2 reductions, is substantial. Through its ongoing collaboration with ENCORE Efficiency (in partnership with Solas Capital), they have been able to more rapidly unlock this potential and integrate renewable energy sources into its operational processes.
