Decarbonize operations with renewable electricity via PPAs

Signify faced the challenge of decarbonizing its global operations, particularly in regions with high fossil fuel dependency such as Poland and the US. As part of its “Brighter Lives, Better World” sustainability program, Signify committed to using 100% renewable electricity for its own operations by 2020 and to reduce emissions at double the pace of the Paris Agreement by 2025. The company prioritized renewable electricity sourcing as a key lever to achieve these goals.

Location of the initiative: US, Poland and EU

Signify implemented three major Virtual Power Purchase Agreements (VPPAs):

1. US VPPA (Texas Wind Farm): Achieved 100% renewable electricity in US and Canada by 2016, covering around 20% of the company’s operational footprint.

2. Poland VPPA (Kisielice Wind Farm): 10-year VPPA signed in 2019. Powers four factories and offices. Reduces 73 kt CO₂e annually.

3. Finland VPPA (Mutkalampi Wind Farm): the first pan-European consortium power purchase agreement with HEINEKEN, Nobian, and Philips. Delivers 330 GWh/year of renewable electricity. Avoids 230,000 tons of CO₂ annually.

Sustainability impact

Climate

• Scope targeted: Scope 2 emissions (electricity use)

• GHG impact: Full Scope 2 reduction in US and Canada, Poland and EU AIB countries. This translates into a 50% reduction of Scope 2 emissions.

Nature

Reduced reliance on coal-based electricity in Poland, supporting biodiversity and air quality improvements.

Social

Supports local renewable energy development and job creation in wind energy sectors.

Business impact

Benefits

• Low-carbon operations.

• Operational cost predictability through long-term energy contracts.

• Enhanced leadership in sustainability and employee awareness.

• Alignment with RE100 commitments.

Costs

Investment in long-term PPAs can be made using different pricing structures. Cost effectiveness depends on the regional energy market conditions at the time of signature. Potential subsidies/tax benefits and the value of Environmental Attribute Certificates help balance initial costs.

Indicative abatement cost

Varies by region and market conditions, also depending on the company’s own energy purchasing strategy

Impact beyond sustainability and business

Co-benefits

Strengthened cross-industry collaboration (e.g., consortium in Finland). Drove cultural shift toward sustainability across global teams.

Potential side-effects

• Regulatory complexity in multi-country agreements. Mitigated through expert advisory.

• Complexity in multi-party agreements. Mitigated through early-stage stakeholder engagement and shared sustainability goals.

Typical business profile

• Multinational companies with large operational footprints.

• Manufacturing-intensive sectors.

• Businesses committed to RE100 and/or net-zero targets.

Approach

1. Assess electricity footprint and regional carbon intensity.

2. Identify high-impact regions (e.g., Poland).

3. Conduct competitive tender for renewable energy providers.

4. Structure long-term VPPAs.

5. Secure certification/verification.

6. Measure and report impact.

7. Share success stories and facilitate joint actions.

Stakeholders involved

• Project Leads: Sustainability and Procurement teams.

• Company Functions: Operations, Legal, Finance, Treasury to be involved early on to secure internal buy-in.

• Main Providers: renewable energy developers.

• Other: advisory, consortium partners with shared sustainability goals.

Key parameters to consider

• Maturity: Established practice with growing adoption.

• Timeline: 12–24 months from assessment to implementation.

• Lifetime: 10-15 year agreements.

• Constraints: Regulatory approval, grid integration, evolving reporting rules.

• Subsidies: Available in some regions.

• Geographical relevance: High in coal-dependent regions.

Implementation and operations tips

• Engage cross-functional teams early.

• Rely on expert knowledge for structuring VPPAs.

• Monitor and report emissions impact transparently.

• Build partnerships to scale impact (e.g., consortium model)