Challenges in Sustainable Fabs: Second ST Energy Deal

STMicroelectronics, a leading semiconductor manufacturer, has recently inked a significant long-term renewable energy supply agreement with Centrica Energy in Denmark. This partnership underscores the growing importance of sustainability in the operation of semiconductor fabs.

The 10-year deal with Centrica represents a major step towards making ST's fabs in Agrate and Catania in Italy sustainable. Under the agreement, ST will receive 61GWh of power annually from a solar farm, which will not only power the fabs but also the company's offices and design centers. This follows a previous deal for 250GWh signed last year, showcasing ST's commitment to renewable energy.

The Power Purchase Agreement (PPA) with Centrica aligns with ST's ambitious goal of achieving carbon neutrality by 2027 through 100% renewable energy sourcing. The company aims to save 150GWh per year by 2027, emphasizing its dedication to reducing its carbon footprint.

Given the high power demands and continuous operation of semiconductor fabs, significant battery storage is required on the solar farms to ensure uninterrupted power supply. Centrica, with 16 GW of capacity under contract in Europe, of which 80% comes from renewable sources, plays a crucial role in meeting ST's energy needs.

ST's previous 15-year agreement with ERG Power Generation for 250 GWh of renewable energy per year from Sicilian wind farms has been instrumental in driving the company towards its sustainability goals. However, ST has yet to outline its plans for powering fabs in Crolles, Tours, and Rousset to meet the 2027 target.

In 2022, ST achieved a 19.8% reduction in energy consumption per unit of production compared to 2016, in line with its 2025 target of a 20% reduction. Despite this progress, there was a 5% increase in absolute energy consumption due to a significant rise in production levels.

Geoff West, EVP and Chief Procurement Officer at STMicroelectronics, expressed the company's commitment to carbon neutrality, stating, "This second power purchasing agreement in Italy marks yet another important step towards ST’s goal of becoming carbon neutral in its operations by 2027." He highlighted the pivotal role of PPAs in facilitating this transition.

Kristian Gjerløv-Juel, Vice President for Renewable Energy Trading & Optimisation at Centrica Energy, emphasized the significance of the collaboration in bringing renewable energy to a major technology player in Europe. The partnership between STMicroelectronics and Centrica Energy sets a positive example for sustainable practices in the semiconductor industry.

Source: www.st.com