Novartis is setting ambitious targets

Profile

  • Global healthcare company (innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines, over-the-counter and animal health products)
  • Headquartered in Basel, Switzerland, with operations in more than 180 countries
  • Employees: 138,000
  • Net sales: US$ 58.0 billion

Markus Lehni - Group Global Head of Environment and Energy at Novartis in Basel, Switzerland

Novartis is setting ambitious targets

 

Profile

  • Global healthcare company (innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines, over-the-counter and animal health products)
  • Headquartered in Basel, Switzerland, with operations in more than 180 countries
  • Employees: 138,000
  • Net sales: US$ 58.0 billion


Markus Lehni - Group Global Head of Environment and Energy at Novartis in Basel, Switzerland


Planning

Collect data and preliminary analysis

To be able to collect high quality energy data, sub-metering is a pre-requisite. At Novartis, minimum requirements recommended for sub-metering are:

  • Electricity meters for all systems (e.g. chillers, air-compressors, heat exchangers, motors) with annual electricity cost >USD10k (or energy consumption >360GJ or 100MWh)
  • Gas (or fuel oil) meters for all sites
  • Steam meters for all stream boilers and users with annual energy cost >USD40k (>3600GJ or 1000MWh)
  • Energy meters for all heating water loops and all equipment using hot water with energy costs >USD20k (>1800GJ or 500MWh)
  • Energy meters for all chilled water loops of energy cost >USD20k (>3600GJ or 1000MWh, calculated as heat content of chilled water)

Metering for the entire site is expected to provide data on hourly consumption of electricity and gas at least for sites with annual energy costs >USD200k (which is equivalent to about 10,800GJ or 3000MWh).

Example of data collection process and preliminary analysis at Novartis

In 2010, Novartis collected energy data on heating, ventilation, air conditioning and plug loads from 40 selected commercial buildings. This was part of the first phase of our group-wide initiative dedicated to the sustainability of these buildings that was launched in 2010, after signing the WBSCD Manifesto on Energy Efficiency in Buildings in 2009.

After having collected the data, we determined energy efficiency targets for each individual building, specifically addressing its type of use and particular climate zone. The method, based on an approach designed in cooperation with local authorities, was first applied at the Novartis Campus in Basel (Switzerland), our Group’s global headquarters. It was then developed into a globally applicable tool. All sites participating in the initiative have defined the specific energy efficiency targets for the selected commercial buildings and benchmarked the energy use of the buildings with these targets.

The energy efficiency of commercial buildings is measured by total energy use per indoor area in mega joules per square meter (MJ/m2). All energy consumption for heating, ventilation, air conditioning and plug loads are included in this figure. Specific targets were defined for the different application areas in commercial buildings. These include offices, various types of laboratories, and special use areas such as restaurants, shops, auditoriums and entrances. Energy targets were also developed for technical areas, which are often located in the basement of a building.

To compensate for varying energy needs in different climatic environments, historical weather data was used (heating and cooling degree day data). Buildings located in tropical regions have significant cooling requirements and colder locations have a greater heating demand. The energy targets for these buildings were calculated differently than locations in temperate zones. The energy efficiency performance, measured by electricity and heat sub-metering, was then compared to the specific target as determined for each building.

The performance versus target ratio is being monitored annually. This provides useful feedback that enables Novartis to follow-up on improvements that have been implemented in the meantime. The measurement process also monitors and compensates for changes in energy use that result from annual variations in weather.

To measure the effectiveness of a site’s energy management system, we developed a tool called the energy management fitness index. This tool consists of 23 questions that address three energy management areas: Organizational issues, procedures and performance. The responses are scored and then summarized to the index (indicating the percentage of full compliance). Novartis as a Group, as well as its Divisions and sites, can use this index for setting a “leading indicator” target to harmonize energy management best practice.

The fitness index was used to evaluate, track and benchmark the energy management systems in use at the commercial sites participating with one or several buildings in the WBCSD Manifesto initiative.

During the rollout of phase II in 2011, the participating sites completed an energy assessment questionnaire (developed in collaboration with external energy specialists) for each building included in the initiative. This questionnaire enabled information to be collected on the actual energy efficiency performance of the buildings and to create a comparison with the energy systems applied at Novartis sites worldwide. At three of the sites included in the initiative, on-site energy audits were conducted using the same approach as in the questionnaire.

As a result, areas for technical improvement have been identified, documented in detail, and reported back to the sites. This data will also be used for benchmarking purposes.

To accurately determine the sustainability of its commercial buildings, Novartis developed the Building Sustainability Scorecard (BSS). This self-assessment tool addresses the key energy and environmental criteria of a building, i.e., topics of the energy audit questionnaire as well as related environmental criteria.

In phase 3 of the initiative, the energy efficiency measures were implemented.


Benchmarking

At Novartis, we use an advanced procedure for benchmarking the energy use of our buildings. We compare the annual, weather corrected energy use of buildings with their respective energy efficiency target. The performance versus target percentage allows perusing improvements over time and serves as a basis for benchmarking buildings in different locations. The total and per area specific energy use of buildings is determined and monitored for key office, laboratory and manufacturing buildings.

To calculate building energy efficiency targets, correction factors and performance data reporting and benchmarking, we have developed an excel data sheet.

Download Excel spreadsheet

How does Novartis determine energy efficiency targets for buildings?

Energy efficiency targets for buildings are specified in terms of energy intensity per floor area, the ratio of annual total energy use (in GJ or MJ) for the building to the total interior gross floor area (in m2) of the building. The target value for a certain building is determined using a reference value and correcting it with the average climate correction ratio (CCR) for the location of the particular building. We have target values for various types of building usage. For a building with mixed usage, i.e. various types of building use in one particular building, each type of usage is taken into account with the percentage of the respective floor area for that particular usage, compared to the total floor area of the building. The CCR is calculated based on the climate correction with multi-year average Temperature Degree Days (TDD).

Climate correction with TDD

The energy use of a building, in particular for its heating, ventilation and air conditioning depends on the climatic conditions of the area in which the building is located. The energy efficiency target of buildings therefore takes into account the conditions of the climatic zone in which it is located.

In very cold areas and in hot and humid areas more energy is needed for heating or cooling and de-humidification of the outside air than in temperate climates. Also in areas with large differences between seasons, e.g. a cold winter and a hot and humid summer, more energy for heating, cooling and drying is needed than in zones with less difference between different seasons of the year.

What is the TDD Concept?
TDD concept quantifies temperature patterns for a specific local climate with respect to required indoor temperature conditions. It can be used to take into account different climatic conditions as well as for correcting weather variations in a particular year compared to multi-year (e.g. 5-year) average conditions.

TDD quantifies the daily measured differences between outside temperature and a reference temperature, accumulated for all days during a given period (e.g. a year). It is determined for heating (HDD) and for cooling (CDD).

At Novartis, Heating Degree Days (HDD) is defined as:

Sum of all ΔT (in ºC) for all days during a year with a daily average outside temperature θ below 18ºC (65ºF): ΔT = 18 – θ

Cooling Degree Days (CDD):

Sum of all ΔT (in ºC) for all days during a year with a daily average outside temperature θ above 18ºC (65ºF): ΔT = θ – 18

What is the TDD Concept?
TDD concept quantifies temperature patterns for a specific local climate with respect to required indoor temperature conditions. It can be used to take into account different climatic conditions as well as for correcting weather variations in a particular year compared to multi-year (e.g. 5-year) average conditions.

TDD quantifies the daily measured differences between outside temperature and a reference temperature, accumulated for all days during a given period (e.g. a year). It is determined for heating (HDD) and for cooling (CDD).

At Novartis, Heating Degree Days (HDD) is defined as:

Sum of all ΔT (in ºC) for all days during a year with a daily average outside temperature θ below 18ºC (65ºF): ΔT = 18 – θ

Cooling Degree Days (CDD):

Sum of all ΔT (in ºC) for all days during a year with a daily average outside temperature θ above 18ºC (65ºF): ΔT = θ – 18

In order to cover not only heating and cooling, but also include de-humidification of outside air to specified indoor relative humidity conditions, we use CDD with a higher weight compared to HDD.

While the total energy need for heating and cooling normally is quantified as the sum of HDD+CDD, this approach intends including de-humidification by factoring in CDD with a weight of 2, i.e. HDD + 2 times CDD.

While this is a suitable approach for humid hot areas, it might over-account the drying needs for dry hot areas. However, it has the advantage of keeping the approach simple, and temperature data is much more available compared to humidity data.

The weight of x2 with which CDD is factored in has been determined by computer modeling energy needs for various HVAC requirements and for a range of climate conditions. The concept, the factor of 2 and the use of 18ºC as reference temperature was identified as a suitable compromise and is valid with an accuracy of 20 to 30%.

The climate correction applied for a specific location is therewith:

Total climate effect (TCEm): HDDm + 2 times CDDm and the
Climate correction ratio (CCR): TCEm (location) / TCEm (reference)

Note: The climate correction calculation is a largely simplified (potentially oversimplified) approach for various reasons. It is based on the assumption that the entire energy consumption is dependent on climatic conditions, which certainly is not true. Heating and cooling degree days are determined for nearby locations where data is available and not for the site itself. Local climate conditions may have a major influence.

How does Novartis determine the energy use performance of buildings?

The building energy use can be monitored with sub-metering of the respective electricity consumption in the building and primary energy (electricity or fuel) needed to generate heat/cold for the individual building. To determine a valid comparison to the target, the performance data can be corrected with the yearly weather correction ratio (WCR) for the location of the particular building, correcting changes caused by weather fluctuations. The WCR is calculated based on the weather correction with TDD.

Weather correction with TCE

The TDD concept can also be used for taking year by year changes of the local weather into account, by indexing actual energy use with a ratio of actual year TCE versus a multi-year (e.g. 5-year) average TCE. HDDa and CDDa values for actual year (with index “a” for actual) for a particular location are also available from the internet: http://www.degreedays.net/#

The weather correction ratio (WCR) is determined by: WCR = TCEa (actual year) / TCEm (multi-year average).

Note: This calculation is a largely simplified (potentially oversimplified) approach as it is based on the assumption that the entire energy consumption in the building is dependent on weather conditions, which certainly is not the case, as part of the energy consumption might be given from processes.

How does Novartis compare performance versus target?

The annual energy performance (energy consumption (in MJ) divided by the cross floor area (in m2), weather corrected (by dividing with WCR), is compared with the building’s energy efficiency target (climate adapted with CCR).

Target achievement is expressed as percentage of use compared to the target. For overachievement energy use is smaller than the target and the percentage is below 100%, for cases where the actual energy use is bigger than the target such percentage is bigger than 100%. The performance versus target percentage allows perusing improvements over time and serves as basis for benchmarking of buildings of different locations.


Team

The energy team at Novartis sites is dependent on the size of the site. All medium or major sites are required to have an energy manager (EM), and major sites additionally have a mandatory energy committee (EC). The purpose of the EM job is to act as an expert in energy and GHG issues and as a promoter for energy efficiency and for renewable resources. The site EM is ideally part of engineering, facility/utilities management or Health-Safety-Environment (HSE). Expertise on energy and climate may additionally be supplied from dedicated outside experts. Depending on the size of the site, the site EM is typically a part-time job.

Below is a specification used by Novartis sites in nominating a site EM:

Energy Manager Specification:
Major SiteMedium SiteMinor Site
Major Accountabilities
  • Identifying improvement potentials and advising site management accordingly
  • Organizing the Site EC
  • Ensuring regular energy reviews of existing buildings and installations
  • Performing energy challenges for new projects (assessing new projects in the initial project phase and during implementation)
  • Ensuring development and maintenance of the list of energy projects for the site
  • Establishing an energy flow diagram for a site
  • Determining energy KPIs for specific energy processes and main energy users
  • Reporting at least once annually to the Divisional EM
  • Reporting energy use and greenhouse gas (GHG) emission numbers in the Novartis Data Management System (DMS)
  • Proposing site energy and GHG targets and monitoring their achievements
  • Establishing internal and/or external energy benchmarks
  • Participating in internal and external technical networks
  • Supporting the users in the analysis and assessment of the energy consumption of their processes
  • Launching awareness and energy saving campaigns
  • Identifying improvement potentials and advising site management accordingly
  • Organizing the Site EC (if applicable)
  • Conduct energy reviews of existing buildings and installations
  • Organize help from Divisional EM or external for energy challenges for major new projects (if any)
  • Ensuring development and maintenance of the list of energy projects for the site
  • Determining energy KPIs for specific energy processes and main energy users
  • Reporting at least once annually to the Divisional EM
  • Reporting energy use and greenhouse gas (GHG) emission numbers in the Novartis Data Management System (DMS)
  • Participating in internal and external technical networks
  • Supporting the users in the analysis and assessment of the energy consumption of their processes
  • Launching awareness and energy saving campaigns
  • Identifying improvement potentials and advising site management accordingly
  • Conduct or organize conduction of energy reviews of existing buildings / installations if the situation requires
  • Organize help from Divisional EM or external for energy challenges for major new projects (if any)
  • Reporting at least once annually to the Divisional EM
  • Reporting energy use and greenhouse gas (GHG) emission numbers in the Novartis Data Management System (DMS)
  • Participating (if possible) in internal and external technical networks
  • Supporting the users in the analysis and assessment of the energy consumption of their processes
  • Launching awareness and energy saving campaigns
Key Performance Indicators
  • Corporate Health, Safety, Environment (CHSE) and Divisional Guidelines and Guidance Notes are fully implemented
  • Energy and GHG targets and performance goals are achieved
  • Corporate and divisional reporting requirements on energy and GHG data are met
  • Capital Appropriation Requests of the site are challenged for energy efficiency
  • Energy Savings Projects are identified, saving opportunities determined, reported and approved
  • CHSE and Divisional Guidelines and Guidance Notes are known and corrective actions are identified and initiated
  • Energy and GHG targets and performance goals are achieved
  • Corporate and divisional reporting requirements on energy and GHG data are met
  • CHSE and Divisional Guidelines and Guidance Notes are known
  • Corporate and divisional reporting requirements on energy and GHG data are met
Job Dimensions
  • Site energy use and related cost budgets
  • Functional budget of role or team within facility management or other functional unit
  • Site energy use budgets
  • Functional budget of role
  • Functional budget of role
Education and Training
  • Bachelor degree in electrical, civil, environmental, chemical or mechanical engineering or other similar technical degree
  • Professional certification in Energy Management or related field (e.g. Certified Energy Manager (CEM) designation)
  • Energy management training (such as e.g. Schneider Energy University)
  • Specific classes on areas of energy, thermodynamics or mechanical engineering
  • Corporate Health, Safety, Environment (CHSE) eLearning (at least umbrella courses on HSE and topic specific courses on Environment and Energy & Climate)
  • Degree in electrical, civil, environmental, chemical or mechanical engineering or other similar area
  • Energy management training (such as e.g. Schneider Energy University)
  • Corporate Health, Safety, Environment (CHSE) eLearning (at least umbrella courses on HSE and topic specific courses on Environment and Energy & Climate)
  • Technical, organizational or HR degree
  • Corporate Health, Safety, Environment (CHSE) eLearning (at least umbrella courses on HSE and topic specific courses on Environment and Energy & Climate)
  • Minimum 5 years of professional experience in engineering or facilities management
  • Minimum 2 year of experience in a supervisory role
  • Demonstrated ability to influence without authority and lead in a matrix environment
  • Minimum 3 years of professional experience in engineering or facilities management
  • Some experience in a supervisory role is beneficial
  • Demonstrated ability to influence without authority and lead in a matrix environment
  • Minimum 2 years of professional experience in engineering or facilities management

Energy Auditing

At Novartis we carry out energy audits and reviews to assess the maturity of energy management practices and the level of conformance of existing buildings and equipment to the internal energy standards. The results of energy audits/reviews enable us to identify and determine respective improvement opportunities for energy efficiency improvement and greenhouse gases (GHG) emission reductions of existing buildings and installations.

For each Division, Novartis has a program of regular energy audits/reviews that include as a minimum the major sites and the key buildings with regard to energy consumption at these sites. The annual planning of energy audits/reviews is based and prioritized on energy and GHG emission performance parameters, and the results of prior data collection.

Below, you find a detailed description of the Novartis energy audit process.

Novartis’ Energy Audit Process

Audit Preparation: Energy audits/reviews are announced in advance, defining the date, the scope and the objective of the audit/review and the audited/reviewed unit is usually requested to complete in advance a preparatory questionnaire in order to capture the basic information and to streamline the process.

Audit Execution: The duration of the energy audit/review depends on the size of the unit analyzed (entire site, multiple or single building, or part of building only) and type of activities of the unit analyzed (cleanroom, production, laboratory, warehouse, office). Energy audits typically last for 1 to 3 days, including report writing and discussion of the draft report, while energy reviews can widely vary on duration depending on the scope of the review and the size of the unit reviewed. Energy audits/reviews will take significantly more time in cases where additional data need to be gathered, energy alternatives need to be evaluated, or if benchmarking data is unavailable due to lack of metered data. This may extend the auditing process as temporary or permanent meters need to be installed and suitable time elapses to gather representative data. Trial measures may sometimes also be required to ensure reasonable accuracy of the savings projected. Both energy audit and review normally comprise interviews, inspections and verification activities. Site or unit management ensures that appropriate contact persons are available throughout the analysis.

Energy audits (as any other audit) formally start with an opening meeting in order to explain the objectives and the audit process, and conclude with a closure meeting in order to present and discuss the results of the energy audit. Specific questions for various types of operational activities are included in the Novartis Energy Survey Checklist and can be used as the basis of energy reviews/audits. They could be used as the basis for the preparatory questionnaire or as a checklist for the analysis.

Audit Report: A draft report is prepared during the visit. It includes key information about the unit analyzed, description of its major energy aspects, and the positive and negative audit/review findings. A finalized written report is completed after the audit/review and includes an executive summary, description of the situation, and the findings. It also comprises recommendations for improvement actions towards higher energy efficiency, resource savings, GHG emission reduction and use of renewable resources.

Audit Follow-up: The unit analyzed establishes an action plan with deadlines for the implementation of the corrective actions and recommended improvement actions and sends it to the Divisional Energy Manager. These action plans are monitored and followed up by the respective Divisional Energy Manager or engineering departments. The results of the action plan may also be reviewed by the Division on site visits and during Corporate and Divisional HSE audits.

The Site Energy Manager conducts the necessary energy reviews at the site. External expertise and resources are acquired if necessary. The Corporate Energy Manager receives a summary of the Divisional energy audit reports from the Divisional Energy Manager as part of the reporting on the Energy Audit Program. The Divisional Energy Manager evaluates the effectiveness and results of the site energy reviews and the resulting improvements. The Divisional Energy Manager also organizes for or conducts the Energy Audits for the Division and maintains a Divisional Energy Auditing Program.

The Group Energy Manager evaluates the effectiveness and results of the Divisional Energy Auditing Programs and the resulting improvements. He/she can initiate individual energy audits and support Divisional Energy Auditing Programs.


Strategy

In 2015, Novartis launched a new environmental sustainability strategy. With the ambition to be a leader in environmental protection, our vision 2030 on environmental sustainability is to use natural resources responsibly and to minimize the environmental impact of our activities and products over their life cycle. Underpinned by targets 2020, our vision focuses on four key impact areas: Energy and climate, water and micro-pollutants, materials and waste, and environmental sustainability management.

Our voluntary GHG emission reduction target for the environmental key priority area energy and climate is as ambitious the Intended National Determined Commitment (INDC) of Switzerland. The target 2020 is to reduce our total Scope 1 and Scope 2 GHG emissions by 30% versus 2010.

To reduce our own GHG emissions we have embarked on a dual strategy:

  • Internally, our main focus is to lower GHG emissions by improving energy efficiency in our operations and by using low-carbon fuels and purchasing electricity from renewable sources.
  • Externally, we have established four carbon-sink forestry projects, which ensure that we can actively remove CO2 from the atmosphere while delivering environmental and social benefits to local communities.

To improve the energy efficiency at our operations, we have put in place a robust energy management system with clearly defined roles and responsibilities, energy reviews and energy audits, energy challenges of capital projects, performance targets, and reporting processes. Furthermore, to better support decision making for more effective GHG reduction measures, Novartis is applying an internal carbon price of USD 100 per ton CO2 equivalents. This helps us to identify and get approved through a dedicated process those energy and GHG reducing projects that allow us to achieve our reduction target most effectively.

To be certain that we have the right conditions and tools to capture the energy saving and GHG reduction opportunities that still exist, we are constantly evaluating how to best maintain the speed and efficiency of ongoing energy improvements and further GHG reductions.


Targets

At Novartis, we used quantitative targets on energy since 2003. In that year we started off with introducing energy efficiency targets for our business divisions. In 2005, we added an absolute greenhouse gas (GHG) reduction target on Scope 1 emissions for Novartis Group as the leading target in our environmental priority area “energy and climate”. This lead target was complemented by the pre-existing energy efficiency target for divisions and by new energy savings targets at site and divisional levels. In 2010, we expanded the GHG target to also include Scope 2 GHG emissions and set an additional specific target on CO2 emissions from our vehicles fleet.

The Novartis target for energy per unit of sales is primarily used for external communication, whereas targets on energy use per production, per number of employees or per building floor area are used internally for specific applications. In parallel, savings achieved in energy projects turned out to be more practical and better for internal communication. Systematically collecting savings information in terms of energy, cost and GHG savings from CAPEX energy projects can illustrate the business case achieved with these projects and the progress achieved compared to a business-as-usual scenario without these additional efforts.

From 2008, (the peak year of GHG emission at Novartis), we have been able to continuously decrease total emissions and work towards our ambitious reduction targets of 15% by 2015 and 20% by 2020 compared to 2008. Novartis have made great progress; with the 2015 GHG target achieved in 2013, two years in advance of our deadline. Our emissions reduction progress has been greatly enhanced by every division actively identifying and implementing energy projects to reduce energy consumption by 2% per year up to 2015, using our 2008 energy consumption levels as a baseline.

In 2015, Novartis increased the ambition of the 2020 GHG reduction target to a 30% emissions reduction compared to the already contracted baseline year 2010, and included a vision for 2030 to reduce GHG emissions by 50%; halving CO2e release compared to the 2010 baseline.


Implementation

Implementing common Energy Efficiency Measures (EEMs)

Each year a number of energy efficiency projects are implemented on Novartis sites. Over the years, our experience has shown that simple steps, like fine-tuning the level of air change rates or adjusting operating schedules, deliver significant energy savings. Replacing large utility units, such as chillers or steam boilers, increases energy efficiency while safeguarding business continuity.

To encourage energy managers, engineers and project leaders worldwide to submit energy saving projects, we created an awards program. This scheme has gathered remarkable savings and innovative ideas. Below are examples of implemented energy efficiency measures at various Novartis sites.

Fluid filtration replacing thermal sanitization

Typically, ingredients for fermentation are thermally sterilized before being added to the fermentation process at the Sandoz Anti-Infectives production site in Kundl, Austria. The process development team has now found a solution to replace thermal sterilization by multi-stage membrane filtration. While membrane filters have been used before, the novelty is to have a filter combination that allows a long-term use with one set of equipment only.

The project was piloted in 2014 and fully implemented in 2015. The previous batch sterilization process was not only very energy-intensive, but also a thermal stress on the ingredient solutions and thereby negatively impacted product quality. With the transfer to fluid filtration, annual savings will amount to USD 140,000 in costs, 12,300 GJ in energy and 680 tons CO2 in GHG emissions.

Two-stage heat exchanger in fresh air pre-conditioning

The Novartis Pharmaceuticals product packaging site in Sasayama, Japan, implemented a completely new energy saving solution in 2014. Until now, cold fresh air was used during winter times for indoor air conditioning, by heating it up to desired temperatures with hot water generated in the boiler with fossil fuels. The new system allows the site to use excess heat from chilled water and from the air compressor in a two-step heat exchanger. The outside air can thus be pre-heated from 0°C to 12.5°C.

The new solution saves the site USD 50,000 in costs, 2,200 GJ in energy and 40 tons in CO2 emissions annually. While limited to areas with seasonal climate with cold winters, this innovative concept can be replicated at many other locations.

Set point control and optimization program

The Novartis Pharmaceuticals production site in Beijing, China, implemented a comprehensive program to optimize its air conditioning system for its clean rooms in 2014. Temperature and humidity set points were adapted and controls installed to prevent over heating, cooling and dehumidification. These rather simple control measures enabled the site with relatively small investments in 2014 to save USD 60,000 in costs and 3,000 GJ in energy compared to 2013. This action can be applied at many other locations without big investments.

Airflow optimization

The Novartis Institute for Tropical Diseases (NITD) in Singapore is dedicated to drug discovery research on tropical diseases such as dengue fever and malaria. In 2013, its conditioned air flow systems were updated to dramatically reduce electricity and chilled water usage. Airflows respond to needs of laboratories and a ‘night mode’ reduces the air change rate after business hours and during weekends. These measures have led to significant savings on purchased chilled water and electricity. With an investment of less than USD 50,000, the project has saved more than USD 230,000 – 27% of our annual spend on chilled water. Together with other energy projects, the site expects even bigger savings on annual electricity costs in the future.

Energy recovery from bio-hazardous waste water deactivation

At the Novartis Biotechnology Center in Huningue, France, the process of deactivating biological components in wastewater uses a lot of energy. Changes were implemented to increase the efficiency of the process, recover heat and relax the conditions under which waste water can be discharged. This led to an energy saving of 78% for deactivation and cooling of the bio-wastewater, representing 12% of the site’s total steam consumption and 45% of its consumption of cooling water extracted from the nearby river.


Implementation

EEMs: value, cost, complexity

The Novartis corporate energy and climate strategy includes the mandatory application of an energy challenge in all investment projects since 2005. This is intended to ensure that energy efficiency and the use of renewable resources are considered and included early on in all investment projects. If energy consumption and the type of resources used are not challenged in the early conception and planning stage of each investment, it will be much more difficult to fulfill the required energy performance levels and achieve best practice later on. The objectives of an Energy Challenge are to reduce both energy costs and energy consumption, together with the minimization of GHG emissions:

↘ GJ Minimization of Energy Use
↘ tCO2e Reduction of GHG Emission
↘ $$ Minimization of Energy Costs

Scope of an Energy Challenge

Project Costs

  • Full cost consideration, including operational costs for resources, for maintenance and for waste management
  • An analysis of “Total Cost of Ownership”, capturing items of initial purchase, energy consumption and annual maintenance costs for the project proposed

Types of resources

  • Consideration of on-site ‘generated’ energy as well as purchased energy
  • Consideration of other environmental impacts and costs

Operational areas

  • All areas of a site, from production and site utilities, to research and office areas
Scope of an Energy Challenge

Project Costs

  • Full cost consideration, including operational costs for resources, for maintenance and for waste management
  • An analysis of “Total Cost of Ownership”, capturing items of initial purchase, energy consumption and annual maintenance costs for the project proposed

Types of resources

  • Consideration of on-site ‘generated’ energy as well as purchased energy
  • Consideration of other environmental impacts and costs

Operational areas

  • All areas of a site, from production and site utilities, to research and office areas

As each capital project is unique and its circumstances different, content, process, as well as the format and outcome of the Energy Challenge must be specific to these circumstances and may therefore always look different. Common to all is the aim to effectively use energy and to reduce related environmental impacts, both leading, directly or indirectly, to cost savings. The Energy Challenge describes the expected energy consumption and resource type and explores the options of alternative/renewable energy sources. As an exception to normal requirements in a Capital Appropriation Request (CAR), energy projects are allowed to pay back the initial investment over the entire lifetime of the asset.

In order to adapt the process of the Energy Challenge to the size of the project, Novartis defined three different types of energy challenge with varying complexity for three different ranges of project size and approval competence:

  • Comprehensive: Executive Committee Novartis (ECN) approval (typically > USD 10 million); Review phases I to V
  • Simple: Divisional approval (typically between USD 1 and 10 million); Review phases I, II, and V
  • Rapid: site approval (typically between USD 50 thousand and 1 million); Review phase II

The comprehensive Energy Challenge for Group-level or for major projects comprises five review phases (I to V). Non-major projects can follow a simplified process of covering only some of the five review phases, or as necessary to achieve the objectives. These five review phases contain the following elements:

Review I: Description of major energy aspects; during project development / conceptual design

Review II: Identification of opportunities for energy and GHG emission optimization; during project planning / basic design

Review III: Detailed evaluation of energy saving and GHG emission avoidance options; during project detailed design

Review IV: Checks to ensure all energy saving and GHG emission avoidance potentials have been incorporated; during project implementation / construction / installation

Review V: Review of early operating experience; during operation / use (shortly after commissioning / start-up)

An expert discussion on the concept of Energy Challenges showed that following aspects are important for the conduction of an Energy Challenge:

  • The time of challenging is important, not too early or too late. It is best to involve the local Energy Advisor or external energy experts to challenge the project at an early stage
  • Checklists with possible energy saving options should be prepared at the design stage and should be followed up as the project progresses (similar to or included in Safety Stops), not just at the beginning and end. In this way, aspects of energy efficiency and renewable energy options can play a vital role; what has been considered or should additionally be considered should be continually updated
  • A cross-functional team with an external member/leader is most advantageous (right size and quality)
  • Best available technologies (BAT) should be considered
  • Specific energy efficiency standards on HVAC systems, buildings etc., are helpful
Examples of two energy challenges

In the table below, the characteristics of two Energy Challenges at distinct Novartis sites are summarized.

What Major investment in a new ChemOps and Chemical and Analytical Development site Medium-sized investments in various ChemOps process projects
Site PH Suzhou, Shanghai (China) PH Grimsby (UK)
Project Energy Management Team

External Auditors (independent of the project but familiar with the relevant technical processes (pharmaceutical energy specialists))

Appointed a responsible person early in the design phase

Established communications with other plants that have relevant experience

Used experience to assess realistic operational loads

Value of the Challenge dependent on the time put in by the project team

Internal Auditors (familiar with the site details to find saving opportunities (cost and energy))

Management team made up of:

  • 2 Process Engineers
  • Technical Project Manager
  • Company Environmental Advisor

Small team with appropriate knowledge/ experience

Considered use of an independent representative (3rd party in some cases)

Possible Energy Improvements

HVAC

  • – Glycol chillers employing evaporative condensers optimally sized for energy consumption
  • Storage and distribution systems engineered to facilitate effective control of parasitic loads
  • Separate cooling system where special lower temperatures are required for short periods
  • Variable speed air compressors with driers powered by heat of compression

Use of Variable Air Volumes (VAVs) on laboratory fume hoods

Significant use of re-circulated air
Air changes per hour well documented in the URS

Being open to innovation, e.g. WWT
Aerators, other utilities and processes

Careful selection of equipment purchased in EU/Asia

Design of independent systems where usage patterns dictate that this is the correct choice

Process description

  • PFDs/PIDs
  • Process design

Equipment review

Motors

  • –High efficiency motors, also in Agitators

Agitators

  • Optimized for process conditions

Pumps

  • Gravity feed
  • Minimized pipe runs
  • Head storage tanks to avoid transfer pumps
  • In-plant dilution
  • Limited use of control valves

Process Heating/Cooling

  • Opportunity to replace the Hot Dowtherm with Cool Dowtherm

Operation review

  • Summary of existing utility networks and capacities
Additional Conclusions

Write energy into the project User Requirement Specifications (URS)

  • – Use experience and optimize URS in every project
  • Ensure budgets are allocated for energy early
  • Use pre-prepared saving calculation worksheets

Major items, e.g. wind generators, absorption chillers, should ideally have separate funding

Ensure you understand the content of the project before embarking upon a Challenge

Use the tools provided – but don’t let them restrict ideas

Don’t expect all identified energy reduction measures to be implemented – they may not be cost effective, they may be outside the scope of the project, or the time delay to the project may be unacceptable


Business case

We have found that energy efficiency is reducing our carbon footprint and makes good business sense: it improves both environmental and economic bottom lines.


Measuring and Reporting Energy and GHG Emissions Savings

At Novartis, we report on identified energy improvement opportunities at all sites, not just commercial buildings. We use a standardized approach to ensure consistency of Energy Project Accounting and to facilitate comparison across internal and external organizations.

Four savings indicators on energy use, energy cost and GHG emissions and the investments in energy/GHG improvements (energy investments) provide the necessary information to be collected in this accounting process. They represent the minimum information being collected for Energy Project Accounting. They may be broken down into different types of energy sources or GHG emission categories. We evaluate all figures at the time of reporting as accurately as possible. The four indicators are defined as follows:

  • Annual Energy Savings: Amount of energy use reduction (in GJ) for each individual project, consisting of annual savings of electricity, steam, natural gas and/or other energy types. Energy savings are additive if one project allows savings on more than one type. Increased use of any type of energy related to the project (e.g. for co-generation) is to be subtracted from the savings.
  • Annual GHG Emissions Savings: Reduction of GHG emissions (in tCO2e), for each individual project, consisting of annual savings of all types of GHG emissions (Scope 1, Scope 2), determined with specified GHG emission factors.
  • Annual Cost Savings from Energy projects: Cost savings (in USD or in local currency), calculated for each individual project using energy prices or carbon costs as defined in the site specific parameters section, for all energy sources and all GHG emission categories involved.
  • Annual Energy Investments: Capital expenditure (in USD or in local currency) for the energy project or the energy/GHG saving part of a project at the site. If only part of the project provides the energy/GHG saving, we estimate the respective proportion of the investment. In the case the investment for the more energy efficient/GHG emission reduced alternative is lower, than for the business-as-usual alternative, i.e. such difference is a negative amount, we report this negative amount for this project.

Apart from these four main indicators, we also include where appropriate economic indicators in the list of energy projects or other saving information and commentary. These could include:

  • Payback information (simple payback or Net Present Value)
  • Total project savings, including other savings than on energy and carbon costs
  • Total investment for the project, including other investments than for energy improvements / GHG emission reduction
  • Savings / environmental improvements on other aspects (e.g. reduction of waste, water, raw materials, packaging)
  • Commentary and other information, where appropriate and meaningful

Results and Feedback

At Novartis, energy and climate performance is primarily measured with absolute numbers of energy use and GHG emissions, together with relative indicators on energy/GHG emissions per sales, production, people or building surface area, and other specific indicators.

We also use quantification of savings achieved with energy projects as an alternative to measure performance and define targets that can be applied to sites and Divisions/Business units. Accounting for savings requires clear definitions and a solid, accepted accounting scope and process, as well as a consistent application at sites and by Divisions/Business units throughout Novartis.

The Site Energy Manager develops and maintains the list of energy projects and reports required figures on project related savings of energy, energy cost and GHG emissions in the Novartis Data Management System (DMS).

The Divisional Energy Manager consolidates the lists of energy projects from the sites to a divisional list and reports it to the Group Energy Manager and the divisional HSE-Officer. The Divisional Energy Manager can break down the divisional energy/GHG savings target into site specific targets, depending on achievements already made, and remaining saving potentials (e.g. potentials identified in recent energy audits and/or site visits and specific project opportunities).

Novartis’ achievements


Cumulative energy savings from projects at Novartis


GHG reduction between 2010 and 2014 by year


Model of the new Novartis Research Campus in Cambridge, MA, USA, with new energy-efficient buildings (inauguration in 2015)

From 2008 to 2014, our business and operations were growing by 30% in terms of production and 25% in terms of building space, but energy use increased only by 4.0%. Thanks to our energy saving projects, energy consumption is considerably lower than the expansion of our operations.

In 2014, total annual energy savings achieved through energy projects amounted to USD 74 million in energy costs and 2.97 million gigajoule (GJ) in energy savings. This accounts for 15.9% of the 2008 energy consumption across all sites and divisions, exceeding the 2015 target by 1.9%, one year ahead of schedule. The target set in 2008 was to reduce the energy consumption by 14% through energy projects by 2015.

In terms of GHG emission, we have also managed to steadily reduce our total GHG emissions thanks to our achieved energy savings and GHG reductions through other measures. Despite continued growth of the company, we reached our 2015 GHG reduction target ahead of time.