Management of Energy Use and Cost
Effectively managing energy usage enhances business efficiency, conserves natural resources and benefits human and other life on earth. Reducing the use of fossil fuels such as coal and fuel oil enhances air quality by reducing fine particulates that contribute to adverse health effects, and helps limit the generation of greenhouse gas (GHG) emissions, which contribute to climate change. In addition, limiting the use of non-renewable energy sources helps preserve their availability for future generations.
While energy conservation benefits the environment, it also makes good business sense for Baxter, since energy is among the company’s most significant manufacturing costs. Since 2005, while Baxter’s sales increased nearly 24 percent through 2008, absolute energy usage increased just 3 percent. However, due to sharply increasing global energy prices, energy costs increased 42 percent during that time, to a total of $182 million. This underscores the importance of Baxter’s ongoing energy management efforts.
During the last decade, Baxter has strengthened its energy management program. In 1999, it re-energized its corporate energy management group, and in 2001 it established a formal position statement on Climate Change and Energy. In 2005, Baxter hired a director of energy management to lead long-term strategic energy planning, coordinate global energy conservation activities and support energy conservation projects.
Baxter’s corporate energy management group oversees the company’s global energy conservation activities and reports energy usage, cost and efficiency improvements quarterly to senior management. Since 2005, Baxter has increased the number of annual facility energy reviews, expanded the use of a third-party utility invoice payment service, established and provided training on facility “Lean” energy standards and promoted best practices in energy management across the company. In addition, to encourage the implementation of energy efficiency projects, Baxter has lowered its internal rate of return for such projects.
Lean Energy Program
In 2007, Baxter launched a “Lean” energy program for the 63 principal company manufacturing facilities. The program established four sets of energy standards – Pre-requisite, Bronze, Silver and Gold – to be phased in from 2007 to 2010. Each category defines 25 to 30 requirements a facility’s energy program should meet. In 2008, 17 locations met 100 percent of the Bronze-level requirements; several facilities are on target to achieve Silver and Gold status.
Biennial Global Energy Conference
Baxter Facilities Engineering Services, with the support of the company’s Manufacturing Council, coordinates a biennial Global Energy Conference for Baxter facility energy managers. The most recent conference was held in autumn 2008 in San Jose, California, United States. Approximately 120 Baxter energy managers, corporate staff, outside presenters and guests attended this conference, which included a special focus on renewable energy and alternative power generation.
Performance
Baxter extended its commitment to reducing energy usage from operations from its original 2010 goal of a 20 percent reduction indexed to revenue, compared to 2005, to a 30 percent reduction by 2015, also indexed to revenue and compared to 2005. Energy usage from operations includes the energy used by Baxter-managed and Baxter-operated facilities, and sales and truck fleets.
From 2005 to 2008, energy consumption for Baxter operations increased 3 percent in absolute terms, from 8,945 to 9,216 trillion joules. During this same period, Baxter improved overall energy efficiency (energy usage indexed to revenue) by 18 percent. This puts the company on-track to meet its energy improvement goals.
View more detail about Baxter's energy usage and GHG emissions.
In 2008, Baxter’s global energy management initiatives achieved combined savings and cost avoidance of approximately $5.1 million (see Environmental Financial Statement for detail).
Energy efficiency gains achieved in 2008 are due to systematic implementation of energy conservation projects. About every three years, Baxter reviews the primary utility systems at each manufacturing facility and large office, covering steam generation and distribution; water usage; electricity distribution; compressed air consumption; lighting; and heating, ventilation and air conditioning (HVAC). Baxter’s compressed air, HVAC, chillers and lighting systems represent approximately 75 percent of Baxter’s total facility-related electricity consumption.
In 2006, Facilities Engineering Services began providing quarterly updates to the Baxter Manufacturing Council (see Global Energy Management Activities section below for a description of the council) on identified projects with acceptable return on investment. Examples of Baxter facility-based energy-conservation projects implemented in 2008 include the following:
- Austria – Baxter’s campus in Vienna used steam-vent condensers to recover steam venting from various plant processes, capturing 450 megawatt-hours of heat for internal use and saving an projected $42,000 per year in energy costs. The facility also began producing domestic hot water by using an air-to-water heat pump that decreased natural gas consumption and provided a cooler working environment in several rooms.
- Brazil – Baxter’s site in São Paulo installed an innovative rooftop water evaporation system to cool the facility’s roof. The system uses relatively clean process wastewater that would otherwise be discharged to the wastewater collection system. This saves a projected $25,000 per year in energy required for internal building cooling and reuses 5,000 cubic meters of water annually.
- United States – Baxter’s facility in Thousand Oaks, California, installed new air compressor technology that uses water injection to maintain a low air temperature. This decreases energy consumption by 50 percent compared to alternative methods.
- United States – Baxter’s Cherry Hill, New Jersey, facility undertook multiple projects to improve boiler and steam-system efficiency, including controlling boiler air intake, optimizing boiler burner combustion control and upgrading steam economizers to maximize heat recovery.
Global Energy Management Activities
Baxter’s Manufacturing Council sponsors the company's global energy management activities, which are part of an integrated energy-conservation, energy cost-reduction and GHG emissions reduction program. The following groups participate in this program as noted:
| Group | Energy Management Activities |
Facilities Engineering Services |
|
Environment, Health and Safety |
|
Corporate Services and Administration |
|
Global Supply Chain |
|
Facility Energy Managers |
|
