Ikea, the world’s largest provider of home furnishings, has announced the company’s move towards investing in renewable energy sources. The company has purchased a wind farm in Scotland and announced plans to install 39,000 solar panels on its U.K. stores.
Ikea has purchased a 12.3-megawatt wind farm in Huntly, Scotland, from Good Energies Capital Inc. The power produced from the wind farm is enough to cover 30 percent of Ikea’s U.K. energy use. The solar panels that will be installed on the stores will provide approximately 5 percent of each store’s power consumption. The solar panels, which are produced by the Chinese company GS Solar Fujian Co., will cost around $6.5 million to install. The price of the wind farm, whose turbines are provided by the Danish company Vestas Wind Systems A/S, has not yet been announced.
The purchase of the wind farm in Scotland is not Ikea’s first experience with renewable energy sources; the company currently owns wind farms in France, Germany, and Denmark. According to Steve Howard, Ikea’s Chief Sustainability Officer, the company is investing in renewable energy as a money saving measure. The company is vulnerable to the constantly changing prices of energy, costing the company approximately $1.7 billion each year. The newest wind farm acquisition brings the total number of Ikea’s wind turbines to 67, which provide a total of 127 megawatts of capacity. Of Ikea’s newest green move, Howard notes that “The principle strategy is to match the direct energy consumption of the business with electricity production from renewable assets.”
Ikea’s environmental track record is far from perfect, but the company has recently taken steps to improve environmental performance. The company has eliminated or reduced volatile organic compounds (VOCs), formaldehyde, chromium, and other chemicals from its products. Ikea has also started using recyclable packaging and provides recycling receptacles in their stores. Recently, the company has stopped offering plastic bags to customers, instead providing reusable bags for sale. Ikea’s products are also packaged in a way that makes shipping more efficient and more environmentally effective.
Despite the company’s efforts to move towards a greener brand, Ikea has come under fire from some environmentalists. The quality of the furniture and the material it is made from is not the most sustainable choice; Ikea is the third-largest consumer of wood in the world. Furthermore, the company has been accused of sourcing their wood from regions where illegal logging is prevalent, such as Eastern Europe. Furthermore, Ikea furniture is essentially disposable and is not intended to be long-lasting, necessitating more frequent purchases and replacements.
The company is not carbon-neutral, but with the newest wind farm purchase, the company may begin to sell “renewable obligation certificates.” As part of the obligation, suppliers of electricity will be required to provide a portion of their power using renewable energy sources, such as wind or solar energy, and provide a certificate as proof. Ikea will also have guaranteed prices paid for electricity generated by renewable sources known as “feed-in tariffs.” Currently, 50 percent of the energy consumed by the company is generated from alternative energy sources.
Ikea has announced that the company is headed towards becoming completely renewable at some point in the future. The Chief Sustainability Officer has admitted that while there is no deadline set for the company to become carbon neutral, he estimates Ikea will most likely become between 70 and 80 percent renewable by 2015. By investing in renewable energy sources such as solar and wind power, Ikea is taking the necessary steps in moving toward a more environmentally-friendly company.
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