Schneider Electric, known for its energy management and industrial automation solutions, is setting out to help the semiconductor industry with its sustainability efforts. The company recently launched Catalyze, a new partnership program aimed at accelerating access to renewable energy across the global semiconductor value chain.
The program aims to draw semiconductor companies together to collaborate on ways to reduce the supply chain emissions within their industry, and it is off to a pretty good start, with inaugural program members Intel and Applied Materials already signing on to participate.
Catalyze joins similar Schneider Electric supply chain partnership initiatives for other sectors, including the Energize program for the pharmaceutical industry, and Walmart’s Gigaton PPA program.
John Powers, Vice President, Global Cleantech and Renewables at Schneider Electric, recently answered some questions about the program in an email exchange with Fierce Electronics.
FE: What are your hopes for getting other semiconductor companies beyond Intel and Applied Materials to buy into this program? Are you actively talking to other companies throughout the supply chain?
JP: The primary purpose of the Catalyze program is to get some of the larger name sponsors on board, to then actively engage their supply chains–as far up the chain as we can go–to enable suppliers of all sizes to decarbonize. This is part of our mission at Schneider, as a leading provider of supply chain decarbonization programs. So that’s where Applied Materials and Intel are our first sponsors, and we will be inviting subsequent suppliers to join the program (including providers of components, materials, etc).
Additionally, we are also very excited to expand the program beyond the initial two founders to other sponsors, and are in active conversations with many other companies in joining the initial sponsor cohort. That would include peers including Intel and Applied Materials, but also large organizations upstream as well as downstream–those using Intel and Applied Materials’ technology. Many of these sponsors have a lot of overlap in supply chains, so if a supplier hears from several of their largest customers at once it’s more likely to spur further action. The broader the coalition we can build, the more impact we can have, at scale. We encourage any prospective sponsor, or supplier to the industry to reach out to us to discuss partnership, and will begin these efforts in the coming months.
FE: What are the biggest challenges to getting semiconductor companies to invest in decarbonization initiatives? Interest level, cost, other challenges?
JP: There are of course many challenges to driving global adoption of renewable energy. I’d say the biggest hurdles we’re going to face in this sector specifically are not so much lack of interest from the industry, or even cost (as renewable energy can be very cost competitive). Some of the largest and most common challenges are as follows:
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The ability for the companies to choose the electricity they buy in the markets where they operate: A large portion of the supply chain for the semiconductor industry is in Asia, and in many of the largest markets, there is very limited if any ability for companies to act on their renewable energy ambitions. We foresee some quick wins with short-term renewable purchases in Asia and globally, and some lower hanging fruit for long-term Power Purchase Agreements (PPAs) or equity investments in Western markets (Europe, Brazil, USA, Canada) and select countries in APAC (Australia, India, possibly Japan). However, to open up the larger markets in Asia to allow large-scale corporate adoption of renewables will be as much about politics as about demand and price signals. Corporate offtakers, collectively, need the partnership of government leaders in these countries to facilitate favorable policy and incentives, which is what we have seen work so well to drive renewables adoption in the west. We are excited to bring the Catalyze program to life in these regions and provide further weight to these policy efforts.
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Data access, from the atomic level to the facility to the organization to the supply chain: Today most organizations in any industry don’t have clear or reliable data on the energy they are using at the device or component level, the building or factory level or the business unit or organization level, much less into their supply chain (where most of the emissions often reside). Without clear data, connected devices and enterprise software it becomes very challenging to prioritize the top places to implement efficiency measures, or the top suppliers to target for renewable energy initiatives. It is also very hard to track progress over time without a clear baseline. Many Schneider solutions such as smart meters, connected devices and EcoStrxure Resource Advisor can help in this area, but there are still major gaps when it comes to data in supply chains. Schneider believes that with the launch of programs such as Catalyze, we can help to increase access to renewable energy for this sector, as well as level the playing field for participating suppliers.
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Scale: The semiconductor industry is set to be a $1 trillion+ industry very soon. The sheer scale of electrification and renewable energy deployment needed to ensure that the impact on the planet is net-neutral or net-positive is certainly daunting. This is why it’s critical to have as many industry participants on board as possible, all working together to drive far greater scale with more speed than individual actors working alone ever could. Working together as one team, we can drive a faster acceleration of the clean energy transition.
FE: How can Energize and similar programs in other industries serve as a model for adoption for the semiconductor industry?
JP: With Energize, one of Schneider’s other marquee supply chain decarbonization programs, we began in a similar manner–with a few companies organically seeking to drive change across the entire pharmaceutical supply chain. What really allowed the program to take off was other sponsors joining those first few and inviting their suppliers as well, to the point where we now have over 20 sponsor companies and over 600 suppliers in the program getting educated on renewable energy solutions and going to market to take action. This collective approach has been so much more efficient than building 20 programs, one for each sponsor, and has allowed for much greater efficiency and acceleration as a collective. It also comes with challenges, as having 20 sponsor decision makers vs. one can make decisions more challenging, but that’s where Schneider comes in in an organizing and facilitation role to gain consensus and keep the project moving forward -through programmatic items such as supplier outreach, data aggregation, educational sessions, among other initiatives. We have certainly learned lessons along the way from Energize, Walmart Gigaton PPA, Pepsi PEP+ Renew and a number of other supply chain renewable energy programs that we will apply to Catalyze, including designing solutions for all levels of suppliers; for programs with all levels of complexities. I couldn’t be more excited for this program, and the ability to partner with one of the fastest growing sectors in the world, to drive greater impact in some of the most challenging markets for renewables. We certainly have no time to waste from an environmental standpoint, and need to seize this moment as an industry.