Danfoss North America will purchase about 75 MW of solar power from a solar farm in Texas, starting in 2025. In the wake of signing a power purchase agreement with CIG Capital, a U.S.-based project financing firm, the initial 12-year agreement will allow Danfoss to fully replace its annual electricity usage in North America with green energy through at least 2037.
With an eye toward achieving its global decarbonization goals, Danfoss will be provided with green certificates, signifying that it is supplying the North American electrical grid with the full amount of green electricity needed to power all 24 factories and 36 locations in North America, which will reduce Danfoss’ carbon footprint in the region by 75%.
As part of its environmental, social and governance (ESG) goals, Danfoss has committed to achieving carbon neutrality across our global operations by 2030, said Soren Revsbech Dam, head of ESG and decarbonization, global services real estate, at Danfoss. “This agreement to secure green energy for our North America operations will reduce our global emissions by 21%,” he noted. “This is not only a significant step in our journey to becoming carbon neutral, but it also demonstrates that we are serious about putting sustainability at the heart of our business.”
CIG Capital will be building the 6-square-mile farm in the panhandle region of Texas. Groundbreaking is scheduled for November 2023, with the farm becoming fully operational by the spring of 2025. The solar farm projects its capacity to be 509 MW of solar power, of which Danfoss will utilize 15%.
The next focus for Danfoss in its decarbonization journey will be on reducing and reusing energy across its North America locations, employing various Danfoss technologies, such as oil-free, variable-speed compressors and other heating and cooling solutions that support heat recovery and energy efficiency.
“Danfoss is committed to playing a leading role in the energy transition,” said Rick Sporrer, president of Danfoss North America. “Meeting our ESG goals and living up to our commitment to combat climate change means developing innovative solutions.”
As part of the Science Based Targets initiative (SBTi), Danfoss plans to become carbon-neutral in its global operations—scope 1 and 2—by 2030 and said it will reduce its value-chain emissions—scope 3—with 15% by 2030. This commitment is included in the targets of Danfoss’ three step-change initiatives on decarbonization; circularity; and diversity, equity and inclusion.
Danfoss indicated it’s seen progress in decoupling environmental impact from business growth by delivering 7% decrease in scope 1 and 2 emissions while growing 15% organically in 2022.
Danfoss headquarters campus site in Denmark became carbon-neutral in 2022 through energy saving projects, utilization of excess heat from processes and data centers, sourcing of green energy and offsetting residual emissions.
