A Business Partnership Driving Sustainability

A Business Partnership Driving Sustainability HOW TO SAVE ENERGY AND INCREASE PROFIT WHILE INVESTING IN RENEWABLE ENERGY

A BUSINESS PARTNERSHIP DRIVING SUSTAINABILITY How To Save Energy And Increase Profit While Investing In Renewable Energy Published by Monday Morning This publication is endorsed by State of Green

Special thanks: Maria Skotte, Jens Christian Aggerbeck, Vibeke Burchard, Camilla Crone Jensen Written by: Tine Rubeck Andreasen, Bjørn Hvidtfeldt Larsen Proofread: Sandra Neele, Richard Steed, Howard Frankel Design: John Helmersen, Carli Hyland, William Zeuthen ISBN: 978-87-93038-06-6

A BUSINESS PARTNERSHIP DRIVING SUSTAINABILITY

HOW TO SAVE ENERGY AND INCREASE PROFIT WHILE INVESTING IN RENEWABLE ENERGY

“The climate partnership has been an effective lever to Novo Nordisk’s Triple Bottom Line by implementing energy-saving projects that are turned into renewable energy investments. The results created by the partnership model are unique but the model in itself can easily be replicated to other businesses and industries.”

Per Valstorp Senior Vice President, Novo Nordisk

“In Denmark many companies have identified energy-saving opportunities, but only limited energy savings are realized. The primary reason is lack of dedication and unstructured organization of the effort. A great number of companies have potential to save 15-20% on their energy bill through investments with a payback time of less than 4 years if the effort is orchestrated in the correct way.”

Torben Harring Vice President, DONG Energy

Content

Preface 7 Executive Summary

9

Introduction 10 About the Publication

11

A Profitable Business Model

12

Creating the Partnership

14

The Partnership Begins

15

Organizing the Partnership

16

Involving the Employees

17

Connecting Energy Technicians and Consultants

18

Identification of Energy-Saving Projects

19

Solutions and Results

21

Case 1: Heat Recovery in Kalundborg

22

Case 2: Ventilation as a Main Driver for Energy Savings

23

Further Developing the Partnership

24

Case 3: From Fossil Fuels to Renewable Energy Supply

25

Case 4: Creating a Flexible Energy System

25

International Perspectives

26

Challenging International Markets

26

Calling for International Leadership

27

Technical Portfolio

29

List of References

42 How To Save Energy And Increase Profit While Investing In Renewable Energy

5

Preface

Addressing climate change is everyone’s business, as individuals and as organizations. The climate partnership between Novo Nordisk and DONG Energy has its foundation in a shared vision to advance energy savings and secure a renewable energy supply. It is a story about how two companies came together because we believe that in partnership we can achieve more than what we are able to accomplish on our own.

It is important to say that we do not act merely to be environmentally responsible, but also because we have a real, imminent and legitimate interest in sustaining our own businesses. For Novo Nordisk, it was important to reduce our vulnerability in a market of increasing energy costs and to reach our CO2 emission target. From DONG Energy’s perspective, it was about securing long-term investment for the expansion of our renewable energy capacity in order to live up to our mission of providing clean and reliable energy.

However, if you had asked us ten years ago, neither of us would have thought that a healthcare company and an energy company would come together in a partnership like this. It was a daunting task as both companies moved into unknown territory. Without the commitment, creativity and courage of the many employees involved, we doubt the partnership would be what it is today.

Together, we have created a partnership model that combines energy savings and the development of renewable energy to the mutual benefit of both companies. Based on customized energy consultations provided by DONG Energy, Novo Nordisk reduced energy use and hereby generated considerable cost savings. The cost savings are earmarked to purchase renewable energy certificates from DONG Energy’s wind farm, thus supporting DONG Energy’s work on developing and promoting renewable energy in Denmark. As a result, all Novo Nordisk’s electricity use in Denmark has been converted to renewable energy.

The partnership has not only proved itself to be a good business case, but also shows that it is possible to move beyond a traditional customer-supplier service

relationship to a sustainable partnership model where the line between customer and supplier is removed. This model is sustainable because it is commercially viable. It takes a long-term perspective and creates value not only for our respective companies but also to broader society.

However, we realize that we are far from done. Businesses have a pivotal and ever-growing role to play in helping to drive the transformation towards a low-carbon economy.

With this publication, we hope to inspire and show that partnerships can be a tool to solve complex challenges of climate change, challenges that often cannot be addressed by any one company or organization. Our aim is to share our experiences and methods so that others will find new ways to incorporate and develop partnership models to further stimulate a more potent and green economy.

Lise Kingo Executive Vice President and Chief of Staffs Novo Nordisk

Morten Hultberg Buchgreitz Executive Vice President DONG Energy

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EXECUTIVE SUMMARY

T

his publication presents the story about the climate partnership between the two Danish companies Novo Nordisk and DONG Energy. The climate partnership agreement was signed in 2007.

The partnership is built on a simple model that combines energy savings and the promotion of renewable energy.

DONG Energy provides Novo Nordisk with energy consulting services and energy efficiency improvements.

In exchange, Novo Nordisk’s resulting financial savings are earmarked for the purchase of renewable energy certificates from DONG Energy’s wind farm, Horns Rev II, in the North Sea. By 2010, all electricity supplied to Novo Nordisk’s Danish production sites was covered by certificates from Horns Rev II. The model enabled both companies to achieve their long-term goals and has generated results that exceed the initial expectations.

In total, the climate partnership has generated annual energy savings equal to €6 million corresponding to a 20 pct. reduction of Novo Nordisk’s Danish energy consumption. Furthermore, Novo Nordisk has reduced its CO2 emissions corresponding to approx. 24,000 metric

tons CO2 annually. In January 2006 Novo Nordisk made a commitment to cut CO2 emissions from global production sites by an absolute 10 pct. from 2004 to 2014. In 2009, five years ahead of schedule, Novo Nordisk achieved this goal.

Today, as a result of the early commitment to producing renewable energy, DONG Energy is a global market leader within constructing and operating offshore wind farms.

Since the partnership between Novo Nordisk and DONG Energy was initiated, more than 140 DONG Energy climate partnerships have been established. The partnerships have helped companies, organizations and municipalities to strengthen their business through energy-cost savings while reducing their overall impact on the climate.

The collaboration has also inspired Novo Nordisk and DONG Energy to explore new business opportunities internationally.

This publication is written by the Danish think tank Monday Morning in cooperation with DONG Energy and Novo Nordisk. The publication is built on extensive interviews with central stakeholders and experts.

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INTRODUCTION

I

n 2007, Novo Nordisk, a global healthcare company, signed a climate partnership agreement with the Danish energy company DONG Energy. The partnership was the first of its kind in Denmark to combine energy savings with renewable energy.

For Novo Nordisk, the climate partnership was a part of many years’ focus on the climate change agenda. Since the 1990s, the company has been working strategically with environmental responsibility as a part of its commitment to manage its business in accordance with the Triple Bottom Line principle (see box on following page).

The initial goal for the climate partnership was, however, neither to generate profit, nor make a political statement.

As Per Valstorp, Senior Vice President, Novo Nordisk explains:

“The goal was never to save the world from climate change, but rather enabling the company to keep up with the changes the world is facing.”

The partnership model is simple: DONG Energy provides Novo Nordisk with energy consulting services, including guidance on energy-consumption audits and energy efficiency improvements. In exchange, Novo Nordisk’s resulting financial savings are earmarked for the purchase of renewable energy certificates (RECS)1 from DONG Energy’s wind farm, Horns Rev II in the North Sea (see figure 1).

The climate partnership ensures a long-term financial commitment that made the construction of Horns Rev II financially feasible, as Novo Nordisk commits to buying renewable energy certificates until 2020. Thus, the

THE PARTNERSHIP MODEL BETWEEN NOVO NORDISK AND DONG ENERGY

DONG Energy helps Novo Nordisk save energy at Danish production sites

Novo Nordisk implements energy-saving projects and achieves financial savings

The financial savings are earmarked to purchase renewable energy certificates from wind farm Horns Rev II

The electricity at Novo Nordisk’s Danish production sites is covered by renewable energy certificates

FIGURE 1 The partnership model between Novo Nordisk and DONG Energy.

The Renewable Energy Certificate System (RECS) is a voluntary system for international trade in renewable energy certificates. RECS was created to stimulate the international development of renewable energy. It advocates the use of a standard certificate to provide evidence of the production of a certain amount of renewable energy and provides a methodology for renewable energy trade. A RECS certificate is issued for every 1 megawatt-hour (MWh) of renewable energy produced by an electricity generation facility that has been registered with the relevant national RECS issuing body.

1

10

A Business Partnership Driving Sustainability

NOVO NORDISK

DONG ENERGY

Novo Nordisk is a global healthcare company specialized in diabetes and haemophilia care, growth hormone therapy and hormone replacement therapy.

DONG Energy is one of the leading energy companies in Northern Europe with headquarters in Denmark. Their business is based on procuring, producing and distributing energy.

Headquartered in Denmark, Novo Nordisk employs approximately 36,000 employees in 75 countries and markets its products in 180 countries.

DONG Energy employs approximately 7,000 employees and operates primarily in Denmark, Sweden, the Netherlands, the United Kingdom and Germany.

THE TRIPLE BOTTOM LINE Novo Nordisk manages its business in accordance with the Triple Bottom Line principle, implying that the company strives to conduct its activities in a financially, socially and environmentally responsible way. As a

partnership was essential for making the construction of Horns Rev II possible. Today, Horns Rev II has a production capacity of more than 209 MW – equivalent to the annual energy consumption of more than 200,000 Danish households.

The partnership model has turned out to be a financial success for both companies. For Novo Nordisk, the partnership has resulted in around 370 energy-saving projects since 2007 corresponding to energy savings of around 87,000 MWh, a decrease of approximately 24,000 metric tons CO2 and annual savings of 6 million. In 2010, Novo Nordisk reached a milestone when 100 pct. of the company’s Danish electricity consumption was covered by renewable energy certificates.

Within the first five years, DONG Energy has successfully replicated the climate partnership model with more than 140 customers across different sectors in Denmark. One of the key factors behind the success is that DONG Energy is able to tailor the partnership to the specific customer.

result, climate change is an integrated part of the overall business strategy to reduce the company’s carbon footprint.

The Triple Bottom Line principle was included in Novo Nordisk’s Articles of Association in 2004.

ABOUT THE PUBLICATION This publication tells the story and shares the experiences of the climate partnership model that was developed by Novo Nordisk and DONG Energy. It includes the business case, results, challenges, solutions and further opportunities for scaling the approach. The research is based on a number of extended interviews with representatives from Novo Nordisk and DONG Energy, climate organizations and energy experts. The final part of the publication contains a Technical Portfolio that seeks to inspire and share Novo Nordisk and DONG Energy’s knowledge with specific solutions and methods. This section is primarily targeting technicians and employees working within energy efficiency.

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A PROFITABLE BUSINESS MODEL “Climate partnerships that combine renewable energy and energy efficiency will pave the way for new and potentially powerful business models. Not only does renewable energy diversify our energy supply, and thereby enhance our energy security, it also improves competitiveness and adds to the creation of new industries, jobs, economic growth and export opportunities. Energy efficiency efforts boost competitiveness and make companies less vulnerable to volatile energy prices.”

Martin Lidegaard, Danish Minister for Climate, Energy and Buildings.

The climate partnership has generated results that exceeded the initial expectations and has proved valuable, in particular when it comes to energy savings and employee engagement.

By the end of 2012, the partnership has generated annual savings of €6 million (see figure 2) corresponding to a 20 pct. reduction of the company’s energy consumption in Denmark. The average payback time for the specific energy-saving projects varies between 1.5 and 3.5 years and many of the projects have no or very small upfront investments. From 2007-2012, the cumulated savings are

INVESTMENTS AND COST SAVINGS REALIZED IN DENMARK 2007-2012 Million euros 8 6 4

Savings Investments Renewable Energy Certificates

2 0 -2 -4 2007

2008

2009

2010

2011

2012

FIGURE 2 The graph shows energy-cost savings versus investment and expenses for renewable energy certificates. A

part of the savings is spent on financing the renewable energy. The man hours spent by Novo Nordisk employees are not included.

Source — Novo Nordisk.

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A Business Partnership Driving Sustainability

€8.8 million in total. A part of the savings has been used to purchase renewable electricity certificates.

The annual energy savings equals around 87,000 MWh and 24,000 metric tons of CO2 emissions. In 2009, Novo Nordisk reached the 10 pct. CO2 reduction target set in 2004. This was five years ahead of schedule and while the company experienced a two-digit annual growth rate in the same period. Even though Novo Nordisk’s total sales continue to rise, the CO2 level is still well below the 2014 target line (see figure 3). The steep decrease in 2009 and 2010 is a result of the purchase of renewable energy certificates and important process optimizations happening at the same time.

For DONG Energy, the partnership and Novo Nordisk’s commitment to buying renewable energy certificates, made the construction of the wind farm Horns Rev II possible.

The numbers illustrate that not only is it possible to build a partnership model around renewable energy, it can also be a profitable business.

Besides generating extended value to its customers, DONG Energy has benefitted from the creation of a new business case. Since 2008, more than 140 new climate partnerships have been established. This has contributed to generating a profitable business capable of meeting the long-term goals of expanding renewable energy.

Additionally, the partnership has created value for the partners who are reducing their CO2 emission while saving energy costs2. Because of the early commitment to produce renewable energy, e.g. through Horns Rev II, DONG Energy is now the market leader within constructing and operating offshore wind farms.

2

REACHING THE GOAL FIVE YEARS AHEAD OF SCHEDULE Index Sales CO2 Target index

300 250 200 150 100 50 0 ’04

’06

’08

’10

’12

FIGURE 3 In 2009, Novo Nordisk’s CO2 emission level fell below the 2014 target line.

Source — Novo Nordisk.

Source: Report by DONG Energy and Danish weekly Mandag Morgen (2011) – “Klimapartnerskaber og værdiskabelse” (Climate partnerships and value creation).

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CREATING THE PARTNERSHIP

N

ovo Nordisk’s journey towards shaping a strategic response to climate change and energy efficiency began prior to the climate partnership with DONG Energy.

In 2004, Novo Nordisk initiated a partnership with the World Wide Fund for Nature (WWF). Through the WWF’s Climate Savers Program, Novo Nordisk and WWF formed a long-term climate strategy that helped Novo Nordisk gain knowledge of the extent of its CO2 emissions, the long-term consequences and possible CO2 reduction targets. In January 2006, Novo Nordisk became the 10th member of the WWF Climate Savers Program.

The agreement committed Novo Nordisk to restructure the energy consumption of its global production sites and reduce the company’s global CO2 emissions by an absolute 10 pct. below the 2004-baseline by 2014. The ambitious target equaled a relative reduction of approximately 65 pct., based on the company’s estimated growth. The reduction was to be achieved through three levers: • Optimization through the Novo Nordisk LEAN program, cLEAN®3 • A global energy-saving program • Conversion to renewable energy

National Energy Agreement In 2006, an agreement was formed between the Danish Parliament and the energy sector including DONG Energy. The agreement imposed the energy sector to advise customers on how to become more energy efficient.

3

The partnership between Novo Nordisk and DONG Energy links the two last levers. In the quest to reach the 10 pct. absolute reduction of CO2 emissions, Novo Nordisk first sought ways to create their own renewable energy supply. This involved searching the market for renewable energy including the possibility of investing in wind turbines in Denmark or Sweden and buying energy from a wind farm abroad. A number of project opportunities were investigated, though none of them proved feasible. Novo Nordisk thus realized that an external energy partner was needed and contacted their energy supplier, DONG Energy to find a solution.

Furthermore, an agreement between the Danish Parliament and the energy sector in 2006 (see below) committed all energy suppliers to push energy savings to the benefit of both companies and society. This meant that DONG Energy introduced the objective to put its expertise on energy efficiency into use for industrial and residential customers.

The climate partnership with Novo Nordisk proved to fit into DONG Energy’s two central goals: to achieve energy savings and a long-term contribution to the realization of the wind farm, Horns Rev II.

In the original agreement, energy companies agreed to achieve energy savings for the benefit of consumers, companies and the Danish society with 570,000 MWh. This was increased to 3.4 million MWh for 2013-2015.

cLEAN® is not a part of the energy-saving program with DONG Energy. Therefore, energy savings achieved through cLEAN® are not included in this publication.

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A Business Partnership Driving Sustainability

In addition, the climate partnership model has demonstrated to fit well into DONG Energy’s long term climate strategy, the so-called 85/15 plan where the goal is to convert the dependency from fossil fuels to renewable energy. In 2006, about 85 pct. of DONG Energy’s electricity production was based on fossil fuels. DONG Energy has declared that by 2040, the company will have switched the fraction, meaning that 85 pct. comes from renewable energy.

The combination of incentives for both Novo Nordisk and DONG Energy was important for the initial dialogue of the climate partnership. The partnership model was formed to serve both companies’ interests and long-term goals.

The Partnership Begins As the partnership model was new for Novo Nordisk and DONG Energy, both companies had to spend much energy and creativity to build a suitable and long-term framework. In the end, they were able to develop a model that benefitted both parties.

After six months of negotiations, Novo Nordisk and DONG Energy signed the agreement in May 2007 – the year after Novo Nordisk joined WWF’s Climate Savers Program. The agreement is effective until 2020. This was a long-term investment for both companies, which resulted in a lot of time and effort spent to establish trust between the involved parties – from executives to employees at production sites.

Former Executive Vice President for DONG Energy Renewables and current chairman of State of Green, Torkil Bentzen, describes the development: “Gradually people started to open up to the idea of the partnership and this evolved into new opportunities. We saw the potential of combining both companies’ knowledge and skill sets. The employees slowly grew accustomed to the fact that the project might actually work, and that it could develop into something big. The realization sparked motivation among the responsible employees, and it spread quickly within both organizations.”

THE CLIMATE PARTNERSHIP JOURNEY 2006: Novo Nordisk became a member of WWF Climate Savers Program – 2014 CO2 emission reduction target set with WWF

2004: Novo Nordisk initiates a partnership with WWF

2007: Signing the partnership agreement between Novo Nordisk and DONG Energy

2009: The inauguration of the wind farm Horns Rev II

2011: DONG Energy signs the climate partnership agreement No. 100

2010: Expanding the partnership agreement between Novo Nordisk and DONG Energy to convert all energy consumption to renewable energy 2010: All electricity supplied to Novo Nordisk’s Danish production sites is covered by certificates from Horns Rev II

FIGURE 4 In 2004, Novo Nordisk initiated the partnership with WWF. Three years later Novo Nordisk and DONG Energy sign the partnership agreement which has led to important results for both companies.

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ORGANIZING THE PARTNERSHIP

T

he success of the climate partnership is largely due to the strong collaboration between the two companies at all levels. DONG Energy’s ability to match representation at the same levels as the partner secures a mutual commitment to the partnership and ensures that both companies work towards a common goal.

The executive level at both DONG Energy and Novo Nordisk are involved in the decision-making through the Partnership Committee. They play an important role in developing the partnership and ensuring continuous progress. The committee convenes twice a year and approves the annual results and sets the direction for future activities. The long-term collaboration between the

ORGANIZING THE PARTNERSHIP

PARTNERSHIP COMMITEE Representatives at Senior Vice President level Responsible for the overall vision and development of the partnership

PARTNERSHIP COORDINATORS One partnership coordinator from each company Responsible for all planning and coordination of day-to-day activities between DONG Energy and Novo Nordisk

ENERGY SAVING PROJECTS Energy stewards from Novo Nordisk and DONG Energy consultants Responsible for all coordination, planning, evaluation and reporting on the energy-saving projects

SPECIFIC LARGE DEVELOPMENT PROJECTS Steering group with project managers from DONG Energy and Novo Nordisk Responsible for the governance of large development projects

FIGURE 5 The strong collaboration between DONG Energy and Novo Nordisk plays an important role in creating a successful partnership.

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A Business Partnership Driving Sustainability

executive at Novo Nordisk and DONG Energy has made it easier to develop new projects and goals when the initial goals were reached.

Asger Friis, Key Account Manager, DONG Energy, describes the need for executive involvement and motivation: “It is essential that the partnership is rooted at the executive level. It ensures support and motivation throughout the organization. The setup creates a positive feedback mechanism where passionate employees can get serious feedback from the top management, and this increases the focus and the willingness to work on the project.”

DONG Energy and Novo Nordisk have each appointed a partnership coordinator who organizes the partnership activities, facilitates the executive decisions and maintains the day-to-day administration. The coordinators are crucial in creating the link between the executives and the involved personnel, thus making sure the partnership runs smoothly.

The responsibility of driving the energy-saving activities at Novo Nordisk’s sites lies with energy consultants at DONG Energy and energy stewards at Novo Nordisk.

When larger-scale projects are developed, appointed project managers from Novo Nordisk and DONG Energy typically form a steering group for the identified project.

“When we launched the climate partnership, the climate agenda had not yet gained momentum. We were concerned that the employees would see this as an additional workload. But on the contrary, the employees became proud of the project and faced the task with dedication and professionalism.

Because of this, we have reached our goal much sooner than we anticipated.”

The employees had to get used to working with the new consultants from DONG Energy, but it did not take long before the employees welcomed the initiative and saw the benefits of having long-term cooperation with a single energy-consultancy group.

“In the beginning we thought we knew everything.

We did not believe there was much more to be gained at our sites. The climate partnership has definitely pushed our boundaries. We might have gotten a bit stuck in our ways of thinking and the climate partnership was a great way to get external inputs.”

Bent Andersen, Environmental Coordinator, Novo Nordisk Employee engagement is viewed as an added value and a key driver to the success of the climate partnership.

Involving the employees Initially, the executives at Novo Nordisk had concerns about how the partnership would be received among the employees due to the fact that it was established at management level. Jan Hoff, Senior Vice President, Novo Nordisk, explains:

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Connecting energy technicians and consultants The close collaboration between the consultants from DONG Energy and the relevant employees at Novo Nordisk has been essential to maintaining the focus and momentum of generating energy savings. The commitment and close collaboration are built through frequent consultations, training sessions and annual seminars aimed at facilitating and sharing best practices across the organization.

DONG Energy has a consultant appointed for each of the production sites in Novo Nordisk. The cooperation creates synergy where the process operators’ knowledge of each specific process and the consultants’ experience and knowledge of energy optimization and new technology generates new energy-saving ideas.

The well-defined organizational structure in both companies has helped build up trust and confidence needed for generating the ideas that challenged existing procedures and habits.

This has shortened the distance between practical problems and technical solutions and thereby created the basis for a successful partnership. Vibeke Burchard, Senior Project Manager Climate Strategy, explains: “It is the enthusiasm and willingness of the energy stewards, process operators and other technicians on-site that ensure the momentum and success of the partnership. Without their passion and expertise to complement the consultants from DONG Energy, the results of this partnership would not have been as impactful.”

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A Business Partnership Driving Sustainability

CRITERIA FOR SUCCESSFUL RESULTS

Top management support

Employee drive

Ability to implement

• Commitment at Senior Vice President level

• Passionate employees at all levels drive change across the organization

• Developing state-of-the -art solutions • Sharing annual targets • Transfering the solutions across production sites

FIGURE 6 The involvement of all levels in the

organizations and the ability to implement the projects are key to a successful outcome.

IDENTIFICATION OF ENERGY-SAVING PROJECTS

T

he energy-saving projects cover a long list of technologies, but the fundamental methodology is basically the same. Novo Nordisk’s energy steward and DONG Energy’s energy consultant conduct energy screenings at Novo Nordisk’s production sites at least every three years. Alongside the continuous and daily maintenance by the energy technicians, the screenings identify new possible initiatives and follow up on ongoing projects.

“When we perform screenings at a given location, we typically identify ten to twenty projects from which we judge three projects worth pursuing immediately. Afterwards, we spend a lot of time with the energy stewards or process operators on site to estimate the potential of the project in detail.”

Jens Christian Aggerbeck, Energy Consultant, DONG Energy.

ENERGY SAVINGS By combining all of the individual energy-saving projects, the climate partnership has resulted in annual savings of more than 87,000 MWh. The biggest contributor has been within ventilation, which alone generates 30,000 MWh in annual savings.

In collaboration, the energy stewards and process operators from Novo Nordisk and the energy consultants from DONG Energy make sure that projects go from idea to execution. The model is based on five phases (see figure 7) which follow the normal process for all projects in Novo Nordisk.

First, Novo Nordisk and DONG Energy conduct a screening where a number of potential projects are outlined. When new projects are identified, Novo Nordisk decides which projects are implemented and when. The decision is based on feasibility studies, concluding in detail the potential of the project. The feasibility study also functions as an internal application of investment in Novo Nordisk where it is decided if the projects should be implemented. As a general rule, all projects with less than five years’ payback time are implemented. Projects with a longer payback time can also be approved if they demonstrate sufficient potential.

If projects are rejected, it is typically a result of technical considerations, e.g. if the general plans for the production site have changed, or if the economy regarding the projects has proven unsatisfactory.

Novo Nordisk is responsible for implementing the projects. When projects are completed, DONG Energy and Novo Nordisk’s energy stewards document the results through the annual energy-saving report, which covers all energy-saving projects across all business areas. The aggregated results are then consolidated and presented to the Partnership Committee at the end of each year.

STRUCTURING THE PROCESS FROM IDEA TO IMPLEMENTATION Screening sites for opportunities

Project proposals STOP/GO Prioritized project list

Business cases STOP/GO Updated project list

Implementation

Documentation and review of results

STOP/GO Action plan for implementation

FIGURE 7 A typical process of identifying and implementing new projects.

Source — DONG Energy.

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SOLUTIONS AND RESULTS

A Business Partnership Driving Sustainability

00 1,8 00 0 4,

20

TECHNOLOGY AND ENERGY SAVINGS 7,000

I

n total, around 370 projects have been implemented since the partnership was established – covering all areas of the Novo Nordisk’s energy supply – including ventilation, cooling, compressed air, water treatment, boilers and lighting (see the Technical Portfolio for a further outline of the projects).

The projects have been initiated in different ways. While some were identified internally through Novo Nordisk’s own experiences, others were identified via comparative calculations and benchmarking with other companies using DONG Energy’s partnership database.

These solutions represent energy-saving projects of different sizes and scale. Some can be classified as “lowhanging fruits” while others are large-scale projects, i.e. the heat recovery project in Kalundborg (see case 1, page 21).

The common denominator for DONG Energy’s approach to identifying energy-saving projects is to go beyond looking only at technical transformations, but to instead examine and challenge existing procedures versus the actual needs. Any departures from “the comfort zone” are met by custom-tailored solutions instead of generic templates. This requires close collaboration with the process operators and utility staff at Novo Nordisk’s production sites, a willingness to test new solutions and, sometimes, stretching beyond standard practice.

This approach, where the employees’ experiences and knowledge forms the basis for new solutions, is central for identifying and implementing new projects.

Even though large-scale endeavors such as the heat-recovery project in Kalundborg have generated considerable energy savings (see case 1), the cumulative results of small-scale projects represent the majority of the realized energy savings. The largest results are found within ventilation with 108 projects resulting in savings of more than 30,000 MWh annually corresponding to around 1/3 of the total CO2 emissions saved (see figure 8).

30,500

10,000 MWh

00 11,

0

22,000

No. of Projects

Ventilation Heating system Process Cooling

108 47 54 37

Compressed air Lighting Other

FIGURE 8 Projects have been implemented within a wide range of areas. The numbers in the pie cart indicate the energy savings within each area of technology. The numbers next to the technology indicate the number of projects.

Source — Novo Nordisk.

36 61 26

case 1 Heat recovery in Kalundborg One larger-scale energy-saving project is the heat-recovery project at Novo Nordisk’s production site in Kalundborg, an example which demonstrates the effectiveness and potential of the climate partnership.

The project and its savings potential had been known for several years but due to its complexity, Novo Nordisk had not allocated resources to follow through. The project was revisited and fine tuned in 2008 as a part of the partnership. The execution plan was developed over three years, with continuous identification of new solutions.

DONG Energy assumed the role as project manager to ensure progress, while conducting the necessary analyses and model calculations in cooperation with Novo Nordisk and Novozymes, a sister company to Novo Nordisk located on the same premises.

The aim of the heat-recovery project was to make use of the surplus heat in condensate instead of emitting it through the cooling towers. The project made it possible to use the heat to warm up water for production and general heating – substituting the district heating from the Kalundborg supplier.

The initial savings potential of the project was estimated to 5,000 MWh, but reusing the heat waste ultimately generated total savings of 13,000 MWh per year.

HEAT RECOVERY IN KALUNDBORG Before the heat-recovery project

Steam

Process

Condensate 90 °C Cooling water > 90 °C

Cooling tower

After the heat-recovery project

Steam

Process

Condensate 90 °C Cooling water > 90 °C

District heat 75 °C Hot process water 60 °C

Heat recovery

FIGURE 9 Previously, the condensate and cooling water was led directly into the cooling tower. After the project was

implemented, the condensate from the production sites becomes collected and re-used in production and also substitutes the district heat supply.

Source — DONG Energy.

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case 2 Ventilation as a main driver

for energy savings

During the course of the partnership, many simple and smaller saving opportunities (the lowhanging fruits) have been found through the energy-saving screenings.

Ventilation adjustments An example of a project that can be classified as a ‘low-hanging fruit’ is illustrated in figure 10. The graph shows that a simple and quick initiative could save Novo Nordisk a great deal of energy by adjusting ventilation during the weekend when it is not needed as no people are working at the sites.

Only by proving the energy waste during the weekends, this obvious energy-saving opportunity was prioritized by Novo Nordisk. Similar savings were later identified at most of Novo Nordisk’s sites.

SAVING ENERGY OVER THE WEEKEND kW 1.600 1.400 1.200 1.000 800 600 400 200 0 Tuesday

Wednesday

Thursday

Friday

Saturday

FIGURE 10 Adjusting ventilation during weekends resulted in significant energy savings.

Source — Novo Nordisk.

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A Business Partnership Driving Sustainability

Sunday

Monday

Challenging standards Another initiative challenged the standards for ventilation at the production sites. In production, the main concern regarding ventilation is to maintain the air quality in the production rooms in compliance with the requirements for the products. Being a healthcare company subjected to GMPrules4, there are certain conditions Novo Nordisk has to live up to concerning humidity, temperature, particles, etc. Yet, a number of energy-saving opportunities were identified, existing requirements challenged and the management convinced that it is possible to do things smarter and still be in compliance with the regulatory requirements.

The initiative was led by a project manager from Novo Nordisk who saw opportunities to optimize the ventilation even in the so-called classified areas at one location, while still maintaining the quality of the indoor climate in compliance with the requirements. With their expertise, DONG Energy contributed to creating the feasibility studies and the business cases which proved that it was possible to change the existing procedures without compromising safety. Later, the solutions were implemented at other locations, including in the design of a new plant in China and at existing plants outside Denmark.

FURTHER DEVELOPING THE PARTNERSHIP

T

he climate partnership between DONG Energy and Novo Nordisk has been developed and redefined over the years and grown into new territories.

The changes have both led to reformulating the goals for Novo Nordisk as well as developing new energy-saving projects that have been replicated to DONG Energy’s other partners.

The projects are a direct result of the development of the climate partnership. As the partnership between Novo Nordisk and DONG Energy became closer, the two companies saw new possibilities and ways to expand the partnership model, e.g. through larger-scale projects that involve other players (see case 3 and 4 on the following page).

A good manufacturing practice (GMP) is a production and testing practice that helps to ensure a quality product. Many countries have developed their own legislation and setup their own GMP-guidelines. The general focus is on guaranteeing the health of the patient as well as producing good quality medicine, medical devices or active pharmaceutical products.

4

How To Save Energy And Increase Profit While Investing In Renewable Energy

23

case 3 From fossil fuels to renewable energy supply

Since 2010, all of Novo Nordisk’s electricity consumption is covered by renewable energy certificates.

As a result, Novo Nordisk and DONG Energy agreed to further expand the partnership model to not only focus on electricity but also other energy types based on fossil fuels delivered to Novo Nordisk’s Danish production sites.

Therefore, Novo Nordisk and DONG Energy started investigating possibilities for converting the steam supply in Kalundborg from coal to renewable energy. Other users of steam and heat in Kalundborg were invited to join the project which started in 2011.

A number of solutions for a safe and sustainable supply of steam and heat in Kalundborg are currently being investigated. The goal is to decide on the most suitable solution by the end of 2013.

case 4 Creating a flexible energy system In 2011, DONG Energy and Novo Nordisk initiated a project entitled Power Hub. The project is an example of how to integrate and remodel existing power sources when new forms of power become available. The project also includes Novozymes, who share the same locations as Novo Nordisk in Bagsvaerd, north of Copenhagen.

The Power Hub was implemented when the Bagsvaerd location switched from natural gas to district heating and thereby left the company with a still-functional gas turbine that no longer needed to run at full speed. This enabled Novo Nordisk and DONG Energy to incorporate the turbine into a flexible energy system. Timing was a factor as well, as the legal framework at the time benefitted this type of maneuver.

The turbine’s production can be adjusted, and this capability enables DONG Energy to control the energy production into the grid while maintaining a stable energy supply.

The system is an attempt to enable and connect more renewable energy to the power grid. With the increasing amount of renewable energy on the grid, the energy system is changing from a predictable routine to a more flexible system, as intermittent energy sources, such as wind and solar power, create imbalances in the system and energy prices. The Power Hub project makes it possible to adjust the energy market to the production of renewable energy in a way that accounts for the sporadic availability of wind and solar.

The project’s pay-back time was six months.

24

A Business Partnership Driving Sustainability

“We need to focus on maintaining a competitive European economy, but also be ambitious enough to meet the necessary long-term climate targets. Energy efficiency and renewable energy are essential for creating sustainable growth, affordable competitive energy prices and energy security in the European market.”

Günther Oettinger, European Commissioner for Energy

How To Save Energy And Increase Profit While Investing In Renewable Energy

25

INTERNATIONAL PERSPECTIVES

N

ovo Nordisk has implemented energy-saving programmes at their sites across the world and is currently exploring if similar long-term partnerships could be established in other markets, hence enabling the company to shift to renewable energy in its international operations.

Likewise, DONG Energy has engaged in new international activities inspired by the partnership model.

In the United Kingdom, DONG Energy is in the early phases of introducing a partnership model with energy efficiency at its core. The company has initiated five customer pilot projects in 2013.

Challenging international markets

The above-mentioned examples illustrate that the climate partnership model has the potential to reach a broader audience. However, it is not without its challenges. The market for business models based on renewable energy and energy efficiency exist, but different factors like local energy prices, legal framework, geographic location and culture all affect the competitiveness of a given business model. Thereby, the ability and willingness to generate a similar setup as DONG Energy and Novo Nordisk have in Denmark can be limited.

Acknowledging the need for energy efficiency, the EU adopted the Energy Efficiency Directive in 2012 that, among other things, imposed energy suppliers to advise customers on how to be more energy efficient.

The legislation establishes a comparable European legal framework as the one Denmark introduced in 2006 (see page 14). Similarly, the directive requires all member

26

A Business Partnership Driving Sustainability

states to set up an energy efficiency obligation scheme that ensures that energy distributors generate a cumulative energy savings target of minimum 1.5 pct. of the annual energy sales to final customers or all retail energy sales companies by 2020.

Overall, the EU legislation has made energy-efficiency models more competitive. However, it does not guarantee success for models like the climate partnership model.

The directive can be implemented in various ways as the national markets already vary in attitudes towards energy efficiency and renewable energy. DONG Energy’s experiences in the UK are an example of this.

“We have experienced a range of attitudes towards our ‘green’ value proposition in the UK. Compared to Denmark, UK companies are more skeptical towards how much long-term value can be provided by the ‘green’ element of a Climate Partnership” Magnus Brogaard Larsen, Business Development Manager, DONG Energy UK. The international examples illustrate that it can be a challenge to replicate the climate partnership model in foreign countries, as there is a need to adapt to local contexts. Even from the Danish to the British market lie differing energy regulatory frameworks and attitudes towards renewable energy investments.

“In Denmark, we have had a focus from a political level to make our energy usage more efficient with various instruments, and this may be where

we differ from other countries. In the United Kingdom, energy efficiency is generally about energy poverty and insulating houses for the poor.

In this case, energy efficiency becomes more of a social policy.”

Ulrich Bang, Director of European Affairs, the Danish Energy Association.

Calling for international leadership During the past decade, there has been a development towards renewable energy investments being centered on a limited group of heavy investors in renewable energy and energy efficiency.

“A decade ago, of the world’s major companies, I would say that there were maybe 10 to 20 pct. who were aspiring to be sustainable leaders, 40 pct. who wanted to follow, and 40 pct. who were either objecting or doing nothing. Now I would say there is a much smaller group of leaders, around 5 pct, or perhaps even less. The difference is that these companies are really leading. And I would put Novo Nordisk and DONG Energy in that group. The leaders are putting climate change and sustainability at the heart of their business strategy and see sustainability as the key for medium and long-term business growth and competitiveness.”

Mark Kenber, CEO, the Climate Group.

Private company leadership is underlined by many experts as decisive for pushing the sustainability agenda.

As international political initiatives have yet to gain momentum, many call for companies to pave the way for new methods and results. The head of the conservation department at WWF, John Nordbo, agrees: “Generally, support from the business community is decisive. The countries without support from the business community are also the countries with little activity on the climate agenda. Some of the most important impulses politicians receive, they get from the business community. In the greater picture I see the corporate world as the key determinant for solving climate change. It is the business community that has to develop and implement the necessary new solutions.”

The market for partnership models has grown in recent years, especially in regards to energy efficiency, and many energy suppliers incorporate this approach into their product catalog. The trend exemplifies a change towards a more cooperative approach for reaching common goals hence moving beyond a traditional customer-supplier relationship. This development can potentially be a driver for leadership in the business community.

The Climate Partnership between Novo Nordisk and DONG Energy

27

Content TECHNICAL PORTFOLIO Introduction 30 How to Move from Words to Action

30

Identifying Projects

30

1. Screening Sites for Opportunities

30

2. Project Proposals

31

3. Business Cases

32

4. Implementation

32

5. Documentation and Review of Results

32

The Different Types of Projects

32

Technology

33

Supply Routes

33

Adjustment of Needs

33

Energy Savings within all Technologies

33

Ventilation 36 Other Technologies

38

Checklist 40

Technical Portfolio

29

INTRODUCTION This Technical Portfolio is mainly targeting technicians and energy experts and outlines specific projects within the climate partnership.

The aim of this portfolio is to inspire others to identify their own opportunities within energy savings and to provide specific suggestions on how to approach the different technical sectors.

The portfolio is divided into three overall sections.

The first section describes how DONG Energy and Novo Nordisk identify solutions - this is an in-depth outline of the presented material in the main publication.

The second section focuses on specific projects and the savings they have generated.

The third sector describes energy savings located within each type of technology.

How to Move from Words to Action In general, DONG Energy’s primary role is to make sure that all relevant issues are addressed. Novo Nordisk’s primary role is, besides bringing in their expertise, to provide all necessary information and pass it on to DONG Energy, who then processes the data, identifies models, calculations, contacts, vendors, etc.

By continuously involving and addressing all relevant stakeholders in the process leading up to the decisionmaking, the main focus is on presenting a good business case for the particular business area that contains all relevant information and approvals from appropriate stakeholders.

Therefore, it is important that expectations are aligned between management and the project team before initiating the project process. This ensures structured work targeting the desired outcome, where both team members and management are committed and motivated towards the subsequent implementation.

In relation to the review of the projects, it is possible to draw on experiences from one project to another, and hereby save both time and money.

30

A Business Partnership Driving Sustainability

IDENTIFYING PROJECTS The cooperation between the energy stewards and process operators from Novo Nordisk and the energy consultants from DONG Energy is illustrated on the following page (figure 11). The model is not unique in its design but it serves the purpose of ensuring all involved employees agree on responsibilities, quality and project plan.

The model is based on five phases: • Screening sites for opportunities • Project proposals • Business cases • Implementation • Documentation and review of results After each phase, it is evaluated whether or not the project should continue. The decision is based on the potential energy savings and related expenses.

1. Screening Sites for Opportunities The screening is a general review to identify potential projects. The review is based on the strategy and objective of the collaboration.

At Novo Nordisk, the respective sites have been screened at least every three years since 2007. The methodology varies depending on the desired output, but can include: • Overall screenings where the entire production site and its utilities are reviewed.

• Technology-specific screenings where focus is on ventilation, cooling, compressed air, process and similar.

• Workshops where energy managers and process operators help to assess potential savings on the basis of sketches and knowledge.

DONG Energy facilitates the screening process and challenges daily operations. Additionally, the energy steward, process operators and other employees from Novo Nordisk have the opportunity to provide their estimates on how to further optimize the energy consumption.

STRUCTURING THE PROCESS FROM IDEA TO IMPLEMENTATION Screening sites for opportunities

Project proposals STOP/GO Prioritized project list

DETAILS Point out potential projects Overview of consumption Screenings are repeated at least once every three years

RESULTS Project list with suggestions for saving projects and general calculations Estimate of each project Short project description Saving MWh/year+/-25% Investment +/-40% Payback time

Business cases STOP/GO Updated project list

Implementation

Documentation and review of results

STOP/GO Action plan for implementation

Clarification of all projects, measures and calculations Price estimates Risk analysis Uncover savings of operations and cost of maintenance

Detailed description of the projects Economy Time frame Process Potential risks

Project design Creating an offer Contract/agreement Establish the project

Detailed documentation of each project

Possible risks Savings MWh/year +/- 10% Investments required +/- 25% Payback time Savings of maintenance

Detailed base for decision Potential risks and how to handle them Savings MWh/year +/- 10% Investments +/- 10% Payback time Savings on maintenance

Energy upgrated facilities Less energy consumption

Reporting of accomplished savings to the Danish Energy Agency

FIGURE 11 The model consists of five phases. After each phase it is evaluated whether or not the project should

continue.

Source — DONG Energy.

2. Project Proposals When the sites are screened, DONG Energy and Novo Nordisk continue to outline the specific content of the projects that should be further pursued. This implies clarifying the measurements and calculations, gathering prices from possible suppliers, identifying risks from a production, economic and safety perspective and potential savings and costs. A project list is made for every suggested project. The lists include calculation and prices.

After clarifying data and operational patterns, DONG Energy reviews the projects in more detail. In this phase the actual energy consumption is determined. For

example, DONG Energy can review the ventilation system through the measurement of airflows, temperatures, energy consumption of motors, etc. Project proposals are derived on the basis of assessments of potential energy savings, such as adjusting night usage, establishing heat recovery, replacing engines, etc.

In the end, a project team including all involved stakeholders is selected. The team estimates the actual needs for the given process and constructs a project proposal.

These project proposals form the basis for the evaluation of whether the project should be continued or rejected.

Technical Portfolio

31

3. Business Cases When the project proposals are finalized and accepted, the team continues to form detailed project descriptions. This includes taking a holistic view of the project’s economy, time frame, process, and mitigating potential risks.

In this phase, the final measurements and assessments of the project’s investments are carried out, including verification of savings. If the projects are still deemed economically feasible, a project proposal is forwarded to the management team who decides whether the project should continue. This proposal forms the basis for the investment application.

Rejected projects remain on the project list and will be reinstated if the initial obstacles change. This could be, for instance, an alteration in energy prices or changes in the production process that make the project feasible.

4. Implementation Novo Nordisk creates a new project design, collects offers from external partners and establishes the framework for further implementation. This can result in changing or rebuilding facilities or production sites. When projects are implemented, the energy savings have to be documented.

THE DIFFERENT TYPES OF PROJECTS Novo Nordisk and DONG Energy go through three different steps when screening for new energy-saving projects (see figure 12). Typically, the first step is to identify the type of technology used (fan, pump, comp. etc.), such as hardware and operation/control strategy changes.

Subsequently, the responsible parties conduct an audit of the supply routes (piping, ducting etc.) which contains an identification of energy-saving potentials such as heat recovery and leaks. Finally, the actual needs are identified by addressing the usage of cooling, heat, air etc. in the process or building. The three steps secure that all areas of a project are identified and the best solution is implemented from the beginning. The three steps are elaborated in the following section.

NOVO NORDISK AND DONG ENERGY’S WAY OF ADDRESSING ENERGY-SAVING PROJECTS Adjustment of Needs

5. Documentation and Review of Results The documentation is used by Novo Nordisk and DONG Energy to see if the results of the projects match the expected outcome.

In addition, annual network meetings are held to share knowledge between the employees at Novo Nordisk and DONG Energy. The aim is to learn about new technologies and inspire to new initiatives. The meetings include presentations by external speakers from commercial and non-commercial organizations on topics such as electric vehicles, fuel cells, efficient motors and pumps, new fan types, new pumps, etc.

Address behavior & habits Adjust to actual needs

Supply Routes Pressure loss Leaks Insultation Heat recovery

Technology Hardware Operation strategy

FIGURE 12 Novo Nordisk and DONG Energy go through three different steps when screening for new energy-saving projects. The technology step identifies hardware and operation strategy changes, the step “supply routes” identifies energy-saving potentials such as heat recovery, insulation of pipes, leaks. The step “adjustment of needs” addresses the use of cooling, heat, air etc. in the process or offices.

Source — DONG Energy.

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A Business Partnership Driving Sustainability

Technology The first step is to collect data and knowledge regarding the existing facility. Using ventilation as an example, the facility’s location, type of fan, motor and possible heat recovery is identified and the equipment’s energy efficiency is examined.

These types of projects typically include hardware changes such as replacements of motors and pumps, establishment of heat recovery on ventilation or compressors and lighting renovation incl. replacement of lamps etc. Furthermore, operation strategy, maintenance and efficiency control of the hardware are addressed.

Supply Routes The second step examines how a media such as compressed air, ventilation air or hot/cold water, etc. is supplied to the consumer. By examining the ducts for ventilation air and the pipes that transport compressed air, vacuum air or water, it becomes possible to reduce energy consumption.

Projects include reducing the pressure loss, discovering leaks in pipes and steam traps and insulating pipes, valves and channels. Furthermore, the possible recovery of heat from condensate and other processes are typically identified in this step.

Adjustment of Needs

example, in the process of optimizing ventilation, DONG Energy reviews the location, compares the installed capacity, airflow, temperature and humidity of the air, and operation hours of the equipment and adjust them in accordance to the actual needs.

Based on the initial review, the partners continue to analyze whether the energy savings qualify for further investigation. Projects with sufficient potential based on the first review are transferred to a project list, together with other relevant projects.

The “classic” way of conducting an energy consultation focuses mostly on technology and supply routes.

Providing advice and challenging actual needs require both the energy stewards and DONG Energy consultants to have knowledge about the actual location, the specific technology and the inherent legislation.

ENERGY-SAVING PROJECTS WITHIN ALL TECHNOLOGIES Projects are identified within a wide range of different technologies. The table at page 34-35 illustrates the number of energy-saving projects that have been identified within different types of technologies.

Pages 36-39 outline the different technologies and list how they have been examined by DONG Energy and Novo Nordisk. The main focus is on ventilation, as this technology has generated the largest energy savings.

As table 1 indicates, most savings are found within actual needs. When looking at the actual needs, control procedures on all kinds of technology and processes are investigated. For example, this includes challenging old habits and suggesting changes like adjusting levels of lights and ventilation to the required and how and when to clean process equipment (also see case 3 on page 24). Typically, DONG Energy provides an overview of the facility. For steps

No of projects

Annual CO2reduction

Annual Savings

METRIC ton

MWh

Technology

75

5,200

16,000

Supply routes

96

8,600

32,400

Actual needs

198

10,300

38,400

Table 1 The number of projects according to the different steps.

Technical Portfolio

33

TECHNOLOGY

No of projects

Energy savings MWh

VENTILATION

108

30,447

6

2,482

56

12,816

3

182

21

7,375

Alteration of set point of temperatures

7

1,438

Alteration of set point for temperature and humidification

5

1,758

Optimization or establishment of heat recovery

10

4,396

COOLING

37

10,076

3

128

Rebuilding systems

16

3,762

Controlling systems

17

6,146

1

40

33

3,879

7

444

14

2,213

Standby consumption

1

124

Controlling systems

9

686

Heat recovery

2

413

39

21,539

Demand management

6

745

Turning off boilers during the summer

2

234

Rebuilding systems

3

462

Controlling systems

1

82

Heat recovery

3

3,230

Heat pumps

3

580

Steam drain

6

4,659

Steam traps

7

2,534

Condensate

3

6,959

Clean steam

5

2,054

LAB EQUIPMENT

10

2,007

Changes in behavior

5

1,154

Demand management

2

46

Rebuilding systems

3

807

Alteration of set points for humidification and dehumidification (deadband) Air exchange Replacement of filters Rebuilding systems

Shutdown

Heat recovery COMPRESSED AIR

Leak detection Rebuilding systems

HEAT and STEAM SYSTEMS

34

A Business Partnership Driving Sustainability

TECHNOLOGY

No of projects

Energy savings MWh

LIGHTING and OFFICE

64

2,109

Motion sensor

17

321

Dynamic lighting

26

1,068

LED

9

83

Renovation

9

333

Office equipment

3

304

28

6,512

Shutdown

2

168

Rebuilding systems

6

753

Standby consumption

4

829

Controlling systems

5

1,650

Altering processes

9

3,092

Stirring (fermentation tanks)

2

20

11

514

Shutdown

1

75

Reduce production waste

3

142

Sanitation

4

151

Lowering temperature

3

146

39

9,764

Electricity and steam supply

4

4,692

Vacuum pumps

7

98

Renovation of pumps

4

312

Pumps need control

6

768

Insulation

8

727

CIP (cleaning in place): Altering process

2

2,453

CIP: Demand management

2

381

IT

3

89

Climate Screen

3

244

PROCESSES

PROCESS WATER

VARIOUS

Table 2 Quantity of energy-saving projects identified within different types of technologies and the savings within each technology.

Technical Portfolio

35

VENTILATION With a total of 108 projects, ventilation is the technology that has generated the largest energy savings. The projects cover systems supplying both validated (subjected to GMP-rules) and non-validated areas (see table 3). The less expensive projects mainly revolve around demand management (operating time and airflow) and the establishment of dead band with regards to humidification and temperature. The projects with larger capital investments require major renovations of the facilities, and typically include the establishment of heat recovery and mixing chambers. Although the table is based on Novo Nordisk’s experiences, many of these changes can also be implemented by other companies.

WHAT IS REVIEWED?

WHAT DOES THE IMPROVEMENT REQUIRE?

INVESTMENT, SAVINGS AND PROFIT

Changing set point (Dead band) temperature

Clarify with the users if changes in temperature affect the product, process and/or comfort. In any case, the set point is challenged. The change typically requires some programming to construct the management system.

Often these projects are very profitable as energy savings are significant and investment small.

Changing set point (Dead band) Humidity

Clarify with users whether the humidity affect the product, process and/or comfort. In any case, the set point is challenged. The change typically requires new programming to construct the management system.

Often these projects are very profitable as energy savings are significant and investment small.

Filters (e.g. frequency of filter replacement)

The need for filtration rate of the air is challenged.

It is clarified whether there are process challenges, environmental requirements, etc. These cases typically require a change of behaviour in the form of new purchasing and maintenance patterns.

Often these projects are profitable, albeit with limited energy savings, but typically without significant costs.

Reduction of pressure loss in filters and ducts

These projects typically require a thorough examination of channels and filter types to assess whether the pressure loss can be reduced.

The projects are typically not profitable, because energy savings are limited and investment is large, because it requires a physical interference with channels.

However, the projects must be considered when renovating production facilities.

Reduction of air changes

Clarify with the users if changes in the airflow affect product, process and/or comfort. In any case, the real needs are challenged. Typically the changes require installation of frequency controllers on the actuators to regulate the airflow to the desired amount. In connection with the project, it is necessary to assess whether possible changes have impact on the indoor environment.

Often these projects are very profitable as energy savings are significant and investment small.

Establishing heat recovery

When reviewing operational data, it can relatively quickly be determined whether it is appropriate to create a heat-recovery system. Projects are typically profitable when there are relatively large air volumes present and the desired supply-air temperature is above 18 degrees Celsius. The system requires a larger incision when establishing heat recovery. Often the solution is a choice based on economics, the quality of the returned air, etc. It is necessary to ensure that there are no risks for cross-contamination if the air source is contaminated.

The project holds potential for relatively large energy savings, but the investment is also typically relatively large.

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A Business Partnership Driving Sustainability

WHAT IS REVIEWED?

WHAT DOES THE IMPROVEMENT REQUIRE?

INVESTMENT, SAVINGS AND PROFIT

Possibility of recirculation / mixing chamber

As an alternative to heat recovery through the coil, it can be possible to re-circulate the air, and thereby harness heat or moisture in the air from the office ventilation. The projects require a thorough clarification of whether the unloading air contains pollution, as well as clarifying which requirements and guidelines are applicable to the supply air in that area. It can often be an advantage to re-circulate the air if there is a need for heating, humidification or dehumidification of the air.

The project contains potential for relatively large energy savings, but the investment is also typically relatively large.

Optimizing existing heat-recovery projects

By measuring the existing heat recovery it is relatively easy to assess if the existing heat recovery is satisfactory. It is important always to check if the existing heat recovery performs as it should.

Investment for this change varies according to the extent of the change - if the areas need to be replaced completely or if minor actions are sufficient to improve the existing heat recovery.

According to the alterations, investment and energy savings vary.

Demand-control of exhaust fans and roof fans

Clarify with the users if alterations in air change affect the product, process and/or comfort. The change typically requires installation of frequency controllers in order to control the air flow to the desired amount. To complete this alteration, it is necessary to assess whether the change has an impact on the indoor environment. The projects typically require temperature control, so ventilation can be controlled according to specific needs (see below).

According to the alterations, investment and energy savings vary.

Reduced operating time/demand management

Clarify with the users if air change affects the product, process and/or comfort and when the affected areas are used. In any cases, the actual needs are challenged.

The change typically requires installation of frequency controllers for the actuators to regulate the airflow to the desired amount. In connection with the project, it is necessary to assess whether the change has an impact on the indoor environment. The projects require a challenge to the existing operation pattern.

Typically, projects are profitable as energy savings are relatively large and it only requires a small change in the management of the installations.

Changes to energysaving fans

The change typically requires a limited shutdown of the ventilation system. Generally, these projects are not as financially attractive as savings are limited compared to the investment.

These projects are most profitable for new construction or retrofitting of existing plants.

switching to energy efficient motors/ PM motors

Often requires a limited shutdown of the ventilation system.

Typically, these projects are not as financially attractive as savings are limited.

Therefore, these projects are most profitable for new construction or retrofitting of existing plants.

Table 3 Overview of the ventilation projects. The table outlines the energy-saving projects, what the adjustments have required and comments about investment needs, savings and/or profit.

Technical Portfolio

37

OTHER TECHNOLOGIES When reviewing specific technologies it has been possible to share experiences and lessons learned from project to project.

The ability to share knowledge is largely due to the climate partnership. Hereby, vast resources have been saved. The next section describes the different technologies and the adjustments that have been made within each area. These changes are not necesarily only related to Novo Nordisk but can be applied on all kinds of companies.

TECHNOLOGY

ADJUSTMENTS

Cooling

The review of cooling is similar to the review of ventilation. At first, challenges regarding hardware on the site are assessed.

Some systems have been replaced due to poor operating economy, phasing out R22, adjustment to new capacity or higher maintenance expenses, etc. Other systems have been replaced when heat recovery from compressors was replaced. The mentioned projects needed significant investments, but it is also possible to find a wide range of less costly projects that focus on operation optimization of cooling systems, adjustment of operational flow or establishing CP-optimizers. Last, but not least, it is examined whether the applied cooling equipment is adequate for the circumstances.

Compressed air

The audit of compressed air systems follows the same methods as ventilation (see previous page). Energy savings are found through searching for leaks and recovery of waste heat from compressors. Furthermore, the actual need is assessed by the users and the pressure is reduced when possible.

Heat systemS

Heat systems cover boilers, the main supply net of steam and district heating for processes and the central heating system for office areas, among others. The projects in this category are primarily related to establishing heat pumps, turning off boilers and circulation pumps during the summer and utilising waste heat in condensing operation and economizer.

STEAM DRAINS

The steam drain is connected to changing processes, especially the modification of steam drain that works as a sterile barrier system. Whether a valve has to be replaced or not is determined from the drawings and walk-through evaluation of the site.

Steam Traps

Through a systematic audit of the steam systems, several sites have shown that there has not been focus on the energy loss of faulty steam traps. The savings are related to replacing steam traps.

Lab equipment

The projects in this category are identified through a review of the laboratories. The savings are primarily related to demand management and changes in behaviour by installing throttle on exhaust ventilation, controlling the need for clean benches and controlling the air amount on fume cupboards.

Lighting

Implementation of projects where dynamic lighting has been installed. These projects have typically generated energy savings on about 90 pct. compared to the point of reference.

PROCESSES

Process covers a wide range of projects where normal operation has been altered in order to save energy. Typically, the alterations relate to changing or eliminating processing steps that are not needed any more; i.e. optimization of columns or changing the need for heating when inactivating sludge.

38

A Business Partnership Driving Sustainability

TECHNOLOGY

ADJUSTMENTS

PROCESS WATER

Process water often demands a thorough mapping to clarify operating patterns and the end-user’s actual needs. By reviewing all sites, challenging the conventional way of doing things, calculating financial costs and disseminating experiences and demands it has been possible to change sanitation frequency in loops, lower the temperature in loops, reduce purge times, reduce production waste and necessary water quality.

VARIOUS CIP (Cleaning In Place)

CIP closely related to process (see above). Energy changes are related to alterations of CIP so that frequency and time are reduced and the system is cleaned with cold acid or base. Additionally, unnecessary rinsing processes have been eliminated.

CONDENSATE

Larger savings have been found when exploiting the waste heat in condensate as steam or district heating has been substituted. The projects often required a considerable mapping of supply and demand on the specific sites and buildings. One of the greatest energy saving projects in 2012 was a project where all waste heat from Novo Nordisk’s and Novozymes’ sites in Kalundborg was analyzed. Subsequently, the energy was allocated to a common-process water system.

PUMPS

A number of old pumps were replaced in favour of need-controlled energy efficient pumps, after reviewing waste water systems and cooling and heating systems.

INSULATION

Insulation of pipes and valves has been assessed when reviewing production sites.

Often the insulation has not been satisfactory and external companies have been hired to insulate the specific areas.

OTHER ENERGYSAVING PROJECTS

Other energy-saving projects include supply, clean steam, vacuum pumps, office equipment, stirring, IT and climate screen.

The projects include altering processes, optimizing and replacing older systems and equipment and demand management.

Table 4 The table explains which adjustments have been made within each area of technology.

Technical Portfolio

39

CHECKLIST To ensure all technologies and solutions are explored at all sites, Novo Nordisk uses a checklist, which aims to clarify what projects have been examined, and how many of the projects that have been implemented at the respective sites. The table below shows the systematic approach to the presented technologies and energy-saving suggestions.

ID

VENTILATION (VALIDATED AND NONVALIDATED AREAS)

COOLING cont.

V1

Hysteresis control of temperature – climatic set points (dead band)

C7

Cooling towers – effective eliminating fouling – with effective filtering and biocide/Ultra sound systems

V2

Hysteresis control of humidity – climatic set points (dead band)

C8

Efficient circulation pumps – VSD

V3

Airflow trimming (Incl. LAF fan speed & area)

C9

Floating temperature set point

V4

Filter optimization (type, shift, pressure)

C10

Optimize operation (floating condenser pressure, CP optimizer)

V5

Reduction of set points for pressure

C11

Efficient use of cooling water (high ΔT)

V6

Local recirculation and heat recovery

C12

Replace R 22 plants with more eff. cooling agent

V7

Reduction of airflow in EX areas

C13

Use of cooling towers instead of compressor cooling

V8

Premium Grade (or PM) Motors

C14

Use of groundwater for cooling

V9

Capacity control – HVAC on demand – actual need (including a reduction in non-operational hours)

C15

Use of surplus heat for absorption cooling

V10

Optimization of existing heat recovery

C16

Heat recovery from cooling compressors

V11

Optimization of airflow in hoods

C17

Capacity control (VLT or new compressor)

V12

Fume cupboards – State–of–the–art automatic

C18

Optimization and effective use of cooling towers

V13

Specific Fan Efficiency (Motors and Fans)

C19

Balancing of cooling systems

COOLING

COMPRESSED AIR

C1

Correcting to acceptable COP values for chillers

CA1

Possibility of combining station/central for building or whole site

C2

Cleaning of condensers on a regular basis/ demand or/and CIP-system preparations installed

CA2

Routine leakage seeking (2/year)

C3

Secondary Cooling Water flow controlled by VSDs

CA3

Optimized allocation of units: Different unit sizes, intelligent automatic to reduce start/stop depending on the local demand

C4

High temp. heat exchange connected to 6-12° system

CA4

Reduced/optimized system pressure

C5

Use of natural ‘free’ cooling

CA5

Automatic shutdown valves close when the process stops

C6

Variable condenser pressure/cooling water temp

CA6

Heat recovery

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A Business Partnership Driving Sustainability

COMPRESSED AIR CONT.

CLEAN UTILITIES

CA7

Premium Grade (or PM) Motors

CU1

Optimize clean-steam generator

CA8

Air intake directly from the outside (ambient air)

CU2

Heat recovery/condensate – feed water

CA9

Vacuum pump optimization

CU3

Reduce bleed off, adjusting rinsing time

CA10

Reducing idle-losses

CU4

Re–evaluation of needs

CA11

Re-evaluation of needs

CU5

Change of water quality/purity (is WFI ‘Water For Injection’ necessary)

CA12

Drying of the air (required pressure dew point and drying method)

CU6

Sanitation of water loops (change frequency)

BOILERS

CU7

Reduction of water losses

B1

Retarders or/and economizer (Flue gas temp.)

CU8

Reduce water temperature in loops

B2

Efficient boiler control – e.g. oxygen control

B3

Efficient motors and VSDs

MI1

Use cold CIP (Cleaning In Place)

B4

Steam/heat meters for measuring efficiency

MI2

Reduce CIP rinsing

B5

Boiler blow down heat recovery

MI3

Change to high-efficiency motors

B6

Steam trap inspection (supervision and repair)

MI4

Demand control - pumps and motors

B7

Turn off boilers and pumps in the warm season

MI5

Insulate pipes, vessels, valves, etc.

B8

Change to condensing boiler

MI6

Size of heat exchangers. Cleaning and maintenance

B9

Balancing of heating systems

MI7

Assess idle-loss

LIGHTING

MI8

Optimization of UPS systems (emergency power)

IL1

Calculated/measured key figures for installed energy and power consumption

IL2

Electronic HF-couplings

IL3

Reduced operating hours using PIR- and daylight-sensors

IL4

Variable light level using PIR- and daylightsensors

IL5

Replacing halogen spot with LED spot

IL6

LED in Cold Storages

IL7

LED for outside lighting

OTHER PROJECTS

Table 5 The checklist is used to clarify which projects have been examined, and how many of the projects have been implemented.

Technical Portfolio

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LIST OF REFERENCES ACKNOWLEDGEMENTS – INTERVIEWS DONG Energy Allan Schefte, Asger Friis, Jens Christian Aggerbeck, Kim Winther, Magnus Brogaard Larsen, Mogens West, Thomas Emil Pedersen, Torben Harring Novo Nordisk Anne Gadegaard, Bent Andersen, Finn Jes Jørgensen, Jan Hoff, Lars Rytter Willumsen, Lise Kingo, Per Valstorp, Vibeke Burchard External John Nordbo, WWF, Lene Lange, University of Aarhus, Mark Kenber, The Climate Group, Ulrich Bang, Danish Energy Association, Torkild Bentzen, State of Green WRITTEN SOURCES Climate Innovation Case Study WWF Climate Savers and International Institute for Management – IMD (2009) Driving the Market for Renewable Energy Novo Nordisk A/S (2011) Facing Up to the Climate Change Novo Nordisk & WWF (2012) Klimapartnerskaber og værdiskabelse (Climate Partnerships and Value Creation) Monday Morning & DONG Energy (2011) Novo Nordisk A/S – Integrating Sustainability into Business Practice Mette Morsing, Copenhagen Business School & Dennis Oswald, London Business School (2005) Novo Nordisk A/S Stops Growth in Carbon Emissions Danish Energy Agency Promoting Innovative Business Models with Environmental Benefits EU Commission – DG Environment (2008) The Blueprint for Change Programme: Facing Up to the Climate Change Challenge Novo Nordisk (2010)

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A Business Partnership Driving Sustainability

For further information about the climate partnership, please contact: DONG Energy: Web: www.dongenergy.dk/klima  Mail: klimapartner@dongenergy.dk Phone: + 45 72 10 20 30 Novo Nordisk: Web: www.novonordisk.com/sustainability/ Mail: Ms Susanne Stormer: ssr@novonordisk.com Phone: +45 44 44 88 88

“Climate partnerships that combine renewable energy and energy efficiency will pave the way for new and potentially powerful business models.�

Martin Lidegaard, Danish Minister for Climate, Energy and Buildings.