"Taking a leadership role on the transition from fossil fuels to renewable power is a win-win for everyone": Tony Milikin, AB InBev

28 March 2017

As part of its RE100 commitment, the world's largest brewer, AB InBev, has set a goal of sourcing all its purchased electricity from renewables by 2025. Tony Milikin, Chief Procurement and Sustainability Officer explains the company's journey so far.

Why is AB InBev going 100% renewable?

“Climate change presents risks to our business and to the wider community, but taking a leadership role on the transition from fossil fuels to renewable power is a win-win for everyone. In addition to the environmental benefit, there is also a business benefit for us in some markets from reduced costs and reduced risk from volatility in energy prices.”

How did you decide on your 100% goal?

“As part of our RE100 commitment, we have announced a goal to source 100% of our purchased electricity from renewables by 2025 – accounting for around 90% of all the electricity we consume. This is a global target that we have been working on for a number of years, and it will reduce our operational carbon footprint by 30%.”

What have you achieved so far?

Our first major initiative under this commitment is a Power Purchase Agreement (PPA) in Mexico, and we plan to enter into similar agreements in other markets in the near future. The PPA in Mexico with Iberdrola, an electrical facilities company which specializes in renewables, will be for 490 gigawatt-hours per year. With this new partnership, our team in Mexico will be able to meet all of its purchased electricity needs for production sites in the country. The agreement with Iberdrola is also expected to increase Mexico’s wind and solar energy capacity by more than 5%. Iberdrola will build and install 220 megawatts of wind energy capacity onshore in the state of Puebla, and energy generation is expected to begin in the first half of 2019.”

What plans do you have to switch to renewable electricity in future?

We expect to secure 75-85% of our purchased renewable electricity through direct PPAs. 15%-25% will mainly come from on-site technologies such as solar panels. We will explore options for transferring our remaining electricity use to renewable sources to meet our RE100 commitment. 

“Mexico marks the beginning of further agreements around the world. By launching this new partnership in Mexico, we hope to demonstrate that by switching to renewable electricity, businesses across the world can contribute to a 100% renewable electricity future.”

What challenges and opportunities are you experiencing?

“We operate in many developing markets, and in many cases, these countries are leading the charge when it comes to building renewable energy capacity. Other countries are still in the early stages of building local renewable energy infrastructure, and we see an opportunity to improve the sustainability of the power sector and transform energy grids in many of these regions. This will be challenging in certain markets, for example, where energy markets are highly regulated. In these cases, we be assessing all the options on the table for going 100% renewable.”

Why do you think it is important for companies to help increase demand for renewable electricity?

The private sector accounts for around half of the world’s electricity consumption. Businesses have an opportunity to help drive positive change by transitioning this consumption to renewables. Companies can also show their support for national governments as they work to deliver on their renewable energy and climate change commitments under the Paris Agreement.”

Why do you think RE100 is a good initiative to join?

“RE100 is global collaborative initiative of businesses all committed to using 100% renewable electricity, and it’s important for businesses to have that platform to demonstrate their commitment and share experiences and advice. We believe there are many other opportunities to come from our membership.”

What else are you doing to drive a net-zero emissions economy?

“We have ongoing programs to improve energy efficiency and reduce carbon emissions across our brewing operations and logistics. We have already converted over 20 coal power generators to natural gas or purchased steam, in China during 2012-2016.” 

 

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