Delta celebrates its 50th anniversary this year (2021) and continues the mission of combining business operations with sustainable development. In early March of this year, Delta announced that it had joined the RE100 global renewable energy climate group. By joining the group, Delta pledges to achieve the total goal of 100% renewable electricity and carbon neutrality by 2030 for all Delta locations worldwide, becoming the first company in Taiwan's high-tech manufacturing industry to commit to reaching the RE100 target by 2030. This is not only a tribute to Delta's 50 years of experience and efforts in environmental protection and energy conservation but also a commitment to the global environment. Delta is also actively following the international trend and laying out a clear blueprint for Delta's sustainability strategy.
In less than six months after committing to RE100, Delta has successfully signed a long-term green Power Purchase Agreement (PPA) with TCC Green Energy Corporation to supply Delta with 19 million kWh of green power from a 7.2 MW wind power installation each year. Under the leadership of the management team and close cooperation between the cross-departmental and cross-regional project teams, Delta is moving towards the RE100 goal one step at a time, which is the best depiction of "Delta Rising (Note 1)."
Built-in solar power system in own factory is an important strategy to align with international community and respond to RE100 trend. Photo is Delta Chenzhou factory with built-in solar power system.
Brand-name manufacturers actively participate in RE100 and the application of renewable power becomes an important indicator for supply chain assessment
RE100 is a global renewable energy initiative led by The Climate Group (Note 2) and CDP. Companies that join the initiative must make a public commitment to achieve 100% green power according to schedule by 2050 and be reviewed each year. At present, RE100 has over 300 corporate members, from various industries such as high-tech, finance, food and beverage, and apparel fashion, among which are many of Delta's major international brand clients. Also, many benchmarking corporations are beginning to demand that suppliers provide products made using 100% renewable energy in their supply chains. With imminent deadlines for this criterion, suppliers will be caught off guard and have their businesses affected if not prepared in advance.
Many of Delta's business units have been experiencing this kind of pressure for quite some time. For example, Delta’s major network customer and major consumer electronics brand-customer coincidentally launched an investigation into the use of renewable energy in their supply chains in November 2020, with the latter demanding that manufacturers commit to using renewable electricity for all their products starting in 2022.
Delta is actively implementing SBT to reduce carbon emissions. By 2020, the carbon intensity has been reduced by more than 55%, which is ahead of schedule. Also, regenerated electricity used at major production plants already accounts for approximately 55.1% of overall electricity consumption, further building our confidence to meet new challenges on the path to reaching the RE100 goal.
Successful experience in reducing carbon emissions for SBT is an important foundation for achieving 100% renewable electricity.
After passing the Science-based Targets (SBT) in 2017 and setting the year 2014 as the baseline, Delta aims to achieve a 56.6% decrease in carbon intensity by 2025. By continuously implementing the three major relevant strategies including voluntary energy conservation and carbon reduction, in-house solar power generation and consumption, and purchasing green energy or acquiring international renewable energy certificates, Delta has already reduced carbon intensity by over 55% in 2020. The use of renewable electricity has also reached about 45.7% of the global electricity consumption for all locations, and the renewable electricity used in major production plants accounted for about 55.1% of the total electricity consumption. The experience gained from the implementation of SBT builds Delta's confidence to further meet the new challenges of RE100.
Although Delta is in the lead in deploying renewable power applications through the implementation of SBT, there are still many hurdles to overcome to achieve 100% renewable power usage by 2030, given Delta's global presence on five continents. According to internal inventory and analysis, Delta's locations that should be included in RE100 are covered by more than 30 country codes and includes nearly 90 companies. Since the development of renewable power varies greatly for each location, the difficulties in realizing RE100 vary. Factors such as high prices, complicated policies, lack of natural resources, and lack of green power purchase channels are all challenges that need to be faced.
In light of the inconsistent development of renewable energy in each country at this stage, Delta will evaluate the appropriate renewable energy development strategies and corresponding solutions for each region, depending on the degree of green power market liberalization and relevant government regulations. Delta's main production sites include China, Taiwan, Thailand, and India. Delta will strive to achieve its RE100 commitment by using its energy-saving, self-generating, and self-built solar power plants, as well as power purchase agreements and renewable power certificates following local market trends. Delta has also developed various renewable energy application solutions to help power generators use renewable energy more efficiently. For example, energy storage systems can intelligently control the charging and discharging time points to help customers improve the matching ratio between electricity consumption and renewable energy generation, which is a promising business opportunity.
All hands on deck to promote RE100— achieving the milestone for the first long-term green power purchase agreement
At the beginning of 2021, Delta established a cross-departmental Taiwan Green Energy Working Group at its headquarters, integrating relevant units such as plant affairs, finance, procurement, legal affairs, capital, and the ESG Office. According to each unit's respective authority and responsibility, they will together enter the green power trading market and negotiate with green power suppliers. The collaboration is aimed to speed up the process of signing power purchase agreements and sales contracts, of which this agreement model and experience can be shared to the various locations and regions around the world.
Members of Delta's Taiwan Green Energy Team visited a wind power project site to survey and evaluate the power generation conditions.
After the establishment of the Green Energy Team, we took the lead in selecting sustainable power generation sites in Taiwan that produced low environmental impact, and conducted on-site surveys and evaluations both in the mountains and at sea, with the main goal of signing long-term PPA contracts. After working tirelessly to overcome the shortage of green power supply in Taiwan, we signed Delta's first long-term green power purchase agreement with our business partner, TCC Green Energy Corporation, a subsidiary of TSMC Group (Note 3), in August. With a total installation capacity of 7.2MW, the land-based wind turbines of TCC Green Energy will provide Delta with approximately 19 million kWh of green electricity per year, which is expected to reduce the earth's carbon footprint by more than 193,000 tons. The Green Energy Group also continues to negotiate with several green power companies to accelerate the achievement of its goals with a combination of wind, light, and water energy sources.
Delta has further established a cross-regional RE100 committee and working groups, with the ESG Office acting as the secretariat coordinator. Headquarters and regional operations directors form the regional working groups to promote and achieve the renewable power goals of all local Delta sites. Since the development stages of renewable energy vary in each region, regions with mature development will reach the RE100 target sooner, such as Taiwan, where the management team has been instructed to reach 100% renewable electricity by 2025. Each regional operation director also reports regularly to Delta's management team and the Sustainability Committee on the progress of local RE100 promotion. We hope that with all of our employees participating in RE100 and every small effort will count in moving closer to allowing truly efficient and clean renewable energy to become the driving force for the sustainable development of each regional operation.
*1 "Delta Rising" is the opening video for Delta's 50th-anniversary Special Exhibition. It tells the story of the founder, Mr. Bruce Cheng, and Delta's efforts in pursuing energy conservation, carbon reduction, and sustainable hope through the power of innovative technology and foundations in the face of climate change.
*2 The Climate Group is a nonprofit organization based in London that promotes important environmental initiatives. Since 2014, we have launched three major environmental initiatives, including RE100, EV100, and EP100. Delta is currently a RE100 and EV100 member company.
*3 TCC Green Energy Corporation is the first power utility group in Taiwan to provide a full range of services in renewable energy investment and development, project contracting, operation and maintenance, and green power sales. TCC Green Energy has been a long-term partner with Delta and has recently adopted Delta's centralized three-phase solar power inverters in the construction of the largest 150MW Tainan Yiantian solar farm and other renewable energy projects to stabilize solar power output.