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September 18, 2019
VPPAs as part of a comprehensive energy strategy
Karen Cecil, Director Environmental Sustainability
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Cummins at a glance
Countries & territories Global employees Engines built in 2018
Wholly-owned & independent distributor & dealer locations
Invested in research & development in 2018
Years of industryleadership
190 62,610 1.5M+
8,000 100$894M
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" ..w. e believe that our survival in the very long run is as dependent upon responsible citizenship in our
communities and in the society, as it is in responsible technological, financial and production performance."
- - J Irwin Milel r FonnerChainnanandCEO1972
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Powering work in a more sustainable way
Our Mission: Making people’s lives better by powering a more prosperous world
Our Vision: Innovating for our customers to power their success
This is not an exhaustive display of Cummins-powered markets.
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Cummins environmental sustainability targets
3.5millionMetric tons of carbon dioxide (CO2) reduced
annually through fuel efficiency gains
from products in use.
Energy intensity reduction in
facilities, adjusted by hours worked.
Reduction in direct water use
intensity, adjusted by hours worked,
with 15 sites achieving Water
Neutrality.
Company-wide facility recycling rate with 30 sites achieving Zero Disposal status.
32% 50% 95% 10%Reduction in CO2
per KG of company goods shipped annually
TO ACHIEVE BY
2020
Internal Use Only
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Cummins energy footprint and goal
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Cummins renewable energy portfolio
Onsite owned (11 projects, 0.5%)
Onsite PPA (3 projects, 1.1%)
Guiding principles: Additional Tangible Cost effective Transparent
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Primary PPA drivers
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Internal Stakeholder Engagement
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Accounting & Finance
Tax Legal
Environment
Treasury
Purchasing
Company Leadership Team, BOD
VPPA Working TeamPublic Use
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Potential VPPA Risks
1100Public Use
MARKET EXECUTION OPERATION REPUTATION
Uncertainty of future wholesale prices
Uncertainty of project completion
Ability tomaintainsource inlong run
Unexpected environmental, community and reporting issues
Identified risks can be mitigated in various ways (i.e. project developer, contract negotiation)
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Virtual power purchase agreements
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Cummins Indiana VPPA 75 MW 262,000 MWh/year 26% global electricity 165,000 MTCO2e/year
The company’s share of the energy generated by the expansion’s 61 wind turbines is more than Cummins uses at all of its Indiana facilities.
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Projected GHG reduction effect of our energy efficiency initiatives, 2010-2020
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Cummins VPPA case study
https://www.rmi.org/wp-content/uploads/2018/10/Choo sing-Off-site-Renewable-PPAs.pdf
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Alignment with company principles and goals Cost-benefit analysis Risk mitigation approach
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