IKEA announced this morning that it is buying its first wind farm in the United States, a 98 MW wind project in Hoopestown, Illinois (approximately 110 miles south of Chicago). This purchase represents the single largest renewable invest made by IKEA anywhere on the planet, and gets the company closer to its goal of being net zero (producing as much as it consumes) by 2020. The total amount of money allocated to this corporate energy effort is $2 billion.
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The Hoopestown project, currently under construction and including 49 two MW Vestas turbines, will be complete by the first half of 2015. Steve Howard, Chief Sustainability Officer, IKEA Group, commented in a press release that “We are delighted to make this investment – it is great for jobs, great for energy security, and great for our business. Importantly, it’s great for the future of our climate.”
IKEA made the announcement at a business executive briefing by Climate Declaration signatories for members of the Bi-Cameral Task Force on Climate Change. IKEA and other companies in this group are committed to focusing on ways reduce their carbon emissions and find clean energy alternatives.Chief Financial Officer of IKEA US, Rob Olson affirmed the company’s commitment to renewable energy for environmental reasons but “also because it makes good financial sense. We invest in our own renewable energy sources so that we can control our exposure to fluctuating electricity costs and continue providing great value to our customers.”
The Hoopeston wind facility is expected to generate up to 380,000 megawatthours of renewable energy each year, which is equivalent to 165% of the electricity consumed by IKEA US (comprised of 38 stores, five distribution centers, two service centers and one factory), or 18% of the electricity used by the IKEA Group worldwide. IKEA currently has investments in wind projects in eight countries (with a total of 206 turbines) as well as 550,0000 solar panels. In 2013, IKEA renewables produced 1,425,000 megawatthours of electricity, which is equivalent to 37% of the company’s total energy (not just electricity) needs. IKEA has invested heavily in energy efficiency as well.
In an interview with Forbes in February of this year, Howard was quite clear as to the rationale and priorities underlying this commitment, noting that investing in renewables constitutes “a macro hedge on energy price rises” while addressing the issue of carbon,
IKEA also has a long-term business philosophy, where we own most of our stores, our factories, and the land they are built on. We have the capital, so why would we rent? It’s the same with energy – if we can own our own energy production why would we not want to do it?
With this latest move, IKEA has sent yet another signal that it means what it says in the area of carbon management and renewable energy.