Energy Efficiency: The Gift that Keeps on Giving

March 21, 2007
Sustainability not only feels good, it pays off, as a growing number of drug companies are learning.

Staying ahead of constant changes in energy availability and costs challenges all manufacturers in any industry. Drug manufacturing, not usually thought of as an energy-intensive industry, is no exception. Operations such as HVAC can be extremely wasteful if they aren’t approached properly (Pharmaceutical Manufacturing, February 2006, p. 50 and May 2006, p. 40).

Today, more pharmaceutical manufacturers are taking basic steps and applying new technologies in long-term strategies designed to see them through supply disruptions and rate hikes. In the process, they are meeting public demands for environmental performance.


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Even though there is no official national mandate, they are also reducing greenhouse gas emissions to minimize their contribution to global warming. An added benefit is that they are adding millions of dollars to their bottom lines.

Spurred by local and state grants for energy efficiency, some companies are embracing cutting-edge technologies in their quest for “sustainability,” in which continued economic prosperity is balanced by protection of the environment.

This year, Baxter International Inc., Roche Holdings, Novo Nordisk and Genzyme Corp. were among Innovest’s “Global 100” list of the most sustainable corporations in the world.

“We are committed to sustainability,” says Jack Kace, Roche’s vice president of environmental and safety affairs. “The high cost associated with energy use and its impact on the global environment make energy management important. It’s what Roche needs to be doing.”

Merck & Co., Inc. also is committed to protecting the environment. Robert Colucci, director of global energy and asset management, sees it as a responsibility to the company’s shareholders, employees and community.

Raising the Bar

Since the mid-1990s, Baxter has been tracking and openly reporting detailed information regarding energy use, energy costs and associated greenhouse gas emissions from all of its facilities. But in 1997, the company also set a number of ambitious long-term environmental, health and safety goals, including reducing energy use and greenhouse gas emissions by 30% (per unit of production activity) by 2005.

Baxter’s efforts fell just three percentage points short of the mark, since some quality assurance validation testing and automation projects had boosted energy requirements. But since then, the company has raised its expectations. “We want to be a global leader in reducing greenhouse gases, since this will make us more competitive,” says Ron Meissen, senior director of sustainability.

Last year, Baxter improved its overall energy efficiency by nearly 6%, avoiding $7.8 million in costs during a year when utility costs increased dramatically around the world, says Larry Funke, director of energy engineering.

Roche achieved its 2008 goal: 10% reductions in energy and greenhouse gas emissions, three years ahead of schedule. Now, it plans to reduce these emissions by another 10% in three years. The company indexes its savings based on number of employees.

Top-Down Commitment is Critical

In order to run an efficient energy program, goals must not only be set by top management but embraced at the various sites. Merck’s Global Energy Team has adopted a goal of cutting energy usage by 25% by 2008 (compared to 2004), as well as a 15% water usage. “These are aggressive goals. Without grassroots participation at the shop-floor level, they can’t be reached,” says Colucci.

At Baxter, each plant has a goal of reducing energy use by 3% per year. According to Funke, plants facilitate their own projects. Each plant has a Quality Working Team that looks for savings in the consumption of air, water and electricity, and then shares best practices with the rest of the organization.

Projects are identified, analyzed and implemented at the facility level, while goal setting and reporting supports these efforts and ensures progress at the corporate level. Manufacturing professionals at the facilities know best where energy can be saved.

To achieve these goals, companies can turn to state funding. New Jersey, so far, has the most aggressive goals in place for reducing greenhouse gas emissions, with Governor Jon Corzine committed to reducing them by 20% over the next 13 years, and 80% by 2050. California also has set stringent reduction goals.

As a result, funding is available to help facilities based in New Jersey improve their energy efficiency. Both Merck and Roche availed themselves of this funding. At Merck’s Rahway/Linden, N.J. plant, for example, the company leveraged support from the New Jersey Clean Energy Program to build the company’s first large-scale solar energy system.

The solar system atop Merck's Rahway, N.J. facility. What began as a clean energy project looks to be a source of significant cost savings for decades to come.

The 500-kW system, commissioned last year, is one of the state’s largest roof-mounted solar installations (Pharmaceutical Manufacturing, July/August 2006, p. 13). It includes more than 1,500 solar panels that cover the roofs of two buildings. One of these buildings already houses a 200-kW hydrogen fuel cell, made possible by state incentives, that produces clean energy from natural gas. The result is a building that can generate almost all the electricity it needs without emitting any greenhouse gases. Over the expected 30-year life of the solar equipment, the facility will prevent the emission of 3,430 tons of carbon dioxide.

At its facility in Nutley, N.J., Roche also leveraged multiple technologies for cost savings. It utilizes a 10-megawatt cogenerator to generate both electricity and heat, saving about $4 million a year.

Cogeneration equipment may involve a large capital investment initially, but it offers a big payback. “If you can utilize the thermal energy, both steam and heat, cogeneration can be well worth [the cost] at larger sites,” says John Parodi, the former senior manager of engineering at the plant, and Roche’s current director of energy.

Trading on Emissions

Baxter has found another way to reduce emissions while realizing a profit. It is a founding member of the Chicago Climate Exchange, a voluntary, legally binding pilot program for reducing and trading greenhouse gas emissions in North America. Members committed to reduce emissions by 1% per year over the years 2003 through 2006. Those members that reduced their emissions below the required level could sell surplus emission allowances on the exchange or bank them. Over the years, Baxter has been able to sell off its surplus.

One project where Baxter was able to cut energy requirements was the expansion of its facility in Indianapolis, Ind. Using isolators instead of cleanrooms in the lab and in production allowed them to save significantly on HVAC costs, which can represent up to 70% of the energy consumption at any pharmaceutical manufacturing plant.

Energy efficiency is also being designed into new manufacturing plants. Merck’s $300 million vaccine manufacturing plant in Durham, N.C. will be certified to meet standards set by the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. A benchmark for the design, construction and operation of high-performance green buildings, LEED promotes a wholebuilding approach to sustainability by recognizing performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. The complex is on schedule to open later this year.

Looking at operations and maintenance opportunities at existing facilities is another way to optimize energy efficiency and save costs. Retrocommissioning is similar to a building tune-up. “Every piece of hardware is compared to how it is supposed to work when it was first designed,” says Parodi of Roche. “Things tend to drift and not work quite right. For example, a sensor might be out of calibration or a damper might not close. These may not be catastrophic conditions, but they represent areas where savings can be achieved.”

Typically, these types of projects pay for themselves in less than two years. In some cases, payback takes only six months. Work orders can be written right after the tests are finished. At its Nutley plant, Roche’s operations team identified six large capital projects, as well as hundreds of others, where retro-commissioning worked. “We have literally saved hundreds of thousands of dollars,” says Parodi.

Idea Sharing

Joining voluntary government-industry groups that bridge different industries is proving to be an effective way to share best practices. One such group is the Energy Star partnership, launched by the U.S. Environmental Protection Agency (EPA) back in 1992. This voluntary partnership, 8,000 members strong, aims to reduce greenhouse gas emissions through increased energy efficiency. This year, Merck was named an Energy Star Partner of the Year for the second year in a row.

Another example is EPA’s greenhouse gas-focused Climate Leaders Program, of which Baxter is a charter member. Baxter also organized the participation of the healthcare industry in a public/private initiative called the Green Suppliers Network. The objective is to integrate “Lean and Clean” manufacturing principles into the operations of suppliers to a particular industry. For a small fee, a participating supplier receives access to manufacturing consultants experienced in process improvement and waste reduction, including a week-long review of the supplier’s operations, help in training and expertise, and a full report detailing areas for improvement.

Baxter also holds a company-wide Global Energy Conference every two years with a Maintenance Conference in the years in between. “Half of these conferences are focused on training, with the other half exploring best practices at all the different plants,” says Meissen.

Employee Participation

Energy savings aren’t restricted to just processes or buildings. Pharma company employees are helping by chipping in at work and even at home when possible. At Merck, as part of the Energy Star program “Change a Light,” employees responded in force. “The program asks 500 employees to each change five lights at their house,” says Holly Savoia, manager of global energy at Merck. “Our employees reached 131% of that goal.”

In addition, Merck has instituted “save a lot Wednesday” once every other month. It is a day when employees are extra-conscious of energy demands. “You will see blinds pulled, no lights on in many offices and fume hoods closed,” says Savoia. “Every little bit counts, and this carries over to their homes.”

Company cars driven by salespeople is another area being explored to help with energy and emission goals at Roche. The voluntary program started when the company bought 10 Toyota Prius hybrid cars to see if they would be reliable in extreme weather such as the cold of Michigan and the heat of Texas. The program now includes hybrid Ford Escape SUVs. Currently, Roche’s fleet contains 240 hybrids out of 1,579 total cars.

“In the long term, we are looking at fuel-cell vehicles,” says Kace. “In Europe, they are running clean diesel. We are trying to convince Detroit that these types of cars are the future and will benefit the environment.”

Building a Successful Energy Program

Energy programs are not created overnight. It takes dedication, commitment and resources. In addition, working capital as well as a desire to innovate and attempt something untried are necessary requirements. Other best practices for a corporate energy program include:

  • Commitment from management –
      “When looking at programs from the site level,” says John Parodi, the former senior manager of engineering at Roche’s Nutley, N.J. plant and current director of energy, “without corporate management buy-in, you are going nowhere.”

  • Clear and achievable goals –
      Merck has adopted a goal of cutting energy usage 25 percent by 2008, as compared to 2004 levels. “Using metrics and measures help monitor performance and achieve these goals,” says Robert Colucci, director of global energy and asset management at Merck & Co., Inc. “These goals must be engrained from the procurement process all the way to plant automation.”

  • Communication –
      According to Colucci, Merck is relentless communicating ideas and programs throughout the company. Energy practices and ideas run in Merck’s daily newspaper as well as a monthly GET (Global Energy Team) Gazette. In addition, a separate energy website conveys practices to employees.

  • Awareness –
      “In order to improve, you have to know how your site works,” says Parodi.

  • A designated “champion” –
      “This can be a maintenance person at the plant level, but someone just needs to be responsible,” says Larry Funke, director of energy engineering at Baxter International Inc. “You need someone to make the reports and attend meetings and make sure things are being looked after.”

  • SWIPE-ing (or Stealing With Integrity and Pride from Everywhere) –
  • There’s no need to reinvent the wheel. “Don’t be afraid of stealing successful ideas from other people,” says Roche’s Parodi.
About the Author

Bill Swichtenberg | Senior Editor