In an effort to resist the ongoing volatility of conventional fuel prices, Sweden’s IKEA Group has ramped up spending on wind farms and solar plants to nearly $2 billion—almost double the present rate—with the goal of deriving 70 percent of its energy needs from renewable sources by 2015. By 2020, it aims for 100 percent.
“Efficiency makes sense and it makes more sense now than ever before,” [IKEA Chief Sustainability Officer Steve] Howard said. “We’ve got rising costs of raw materials and rising costs of energy and a really strong need to decarbonize.”
This is but one story in a trend that is sweeping major companies, from Puma to PepsiCo (NYSE: PEP); they are all engaged in transitioning energy sourcing to renewables.
And they’ve got good reason—wind turbine prices dropped 23 percent in the three years ended this June, and solar panel costs have crashed by more than half in just two years. This has allowed companies to increase their reliance on renewables—which sure makes for good publicity—while not hurting the bottom line significantly.
Under its present sustainability program, IKEA has 43 MW of solar PV panels and 180 MW of wind turbines either installed or in the process thereof. $2 billion has been earmarked toward the company’s 2009-2015 goals.
The company used around 3,600 gigawatt-hours in 2011, and more than half of that was in the form of electricity. That is, of course, projected to go up by 2020, but it should be possible to exert some brakes on the proportional rise by using more efficient power management solutions (for example, switching out existing light bulbs for LEDs).
Earlier this month, IKEA said that it will only offer LED lighting in its stores from 2016. It also aims to get all of its cotton supplies from sources certified by the Better Cotton Initiative, half of its wood supplies from “preferred” certified sources, and all of the oils used in candles and foods from sustainable sources. Further, it will aim to recycle 90 percent of waste from all stores.