Arla Foods powers European operations with 100% renewable electricity

Arla Foods, a farmer-owned dairy cooperative, has announced that its European sites have been powered exclusively by electricity from renewable sources since the end of last year. Approximately 93% of Arla Foods’ total electricity consumption is located within Europe, where the dairy company operates 46 sites across seven different countries.

“This is a great achievement for our cooperative and the result of years of hard work and dedication by the teams involved,” says David Boulanger, executive vice president of supply chain at Arla Foods.

“We are constantly looking to make our supply chain more sustainable, and ensuring that we now run on 100% renewable electricity is a big feat and something we are proud of, especially as it comes from long-term agreements connected to concrete projects, creating additional access to renewable electricity in the EU and the UK.”

Green energy dairy production

Arla Foods says its renewable energy consists of a “fairly even split” between open-market certificates and long-term Power Purchase Agreements (PPAs). A PPA is a contract between a company generating electricity and an offtaker, agreed for multiple years at a fixed price.

The company has entered into several PPAs to secure access to electricity powered by wind and solar energy. By committing to offtake the electricity over several years, Boulanger says the company is contributing to the green transition in an area “widely impacted by shifting political support.”

“Energy companies often need the extra security of a guaranteed consumer before committing to a large investment in renewable energy, such as a wind or solar park. They seek partners like us who are capable of purchasing their electricity at a viable price — and not just for a couple of years, but for the long term,” he explains.

“We have signed long-term PPAs showing our continuous commitment to producing dairy as sustainably as possible, now and in the future.”

Examples of Arla Foods’ PPAs include a 44 GWh/year agreement from solar and wind power plants in Pronsfeld, Germany, near the company’s biggest dairy, two solar plants in Lincolnshire and Kent in the UK generating a combined 20 GWh/year, 43 GWh/year from a solar park in Denmark, and 90 GWh/year from what the company says is the largest solar PPA in Sweden’s history.

The rest of the renewable electricity is covered by certificates, including those purchased directly from Arla farmers for electricity generated at their farms, for example, from windmills.

Supply chain sustainability

Arla Foods has also invested in electrifying its supply chain and moving away from fossil fuels. With “massive projects” in Denmark, Germany, and the UK, the company says almost 30% of its total energy use is now electricity.

“While reducing energy consumption will always be our first priority, electrifying our supply chain is also an important driver to future-proofing and decarbonizing our operations,” says Boulanger.

“Not only does it make us less dependent on fossil energy sources and vulnerable to geopolitical and market volatility, but it contributes heavily to our supply chain sustainability agenda, and even more so now that we use 100% renewable electricity.”

Arla Foods says it will now explore further how to increase its share of renewable electricity for its sites outside of Europe.