Friesland Campina pays dairy farmers for their 'Green Electricity'
The company purchase green electricity directly from dairy farmers and pay them in line with market prices.
FrieslandCampina, one of the largest dairy companies in the world, in a recently stated in press release that 94% of its worldwide electricity usage in 2019 was ‘green’. This is because the company did not want to use fossil energy sources for its locations.
The company is taking a step further this year. Not only must electricity usage be 100% green, the company wants to purchase this green electricity directly from its member dairy farmers and pay them in line with market prices. To accomplish this, it will work with “Power Purchase Agreements.”
Already 50 dairy farmers connected via new method
PPAs go beyond the “Guarantees of Origin” (GoOs) that are now commonplace. A GoO is a certified proof that energy has been generated sustainably. This allows ‘grey’ purchased energy to become green. Via a PPA, the company can directly purchase green energy from member dairy farmers. At present, more than 50-member dairy farmers already supply green energy to the company via PPAs. Together, these “energy farmers” already account for about 10% of the Dutch electricity needs of the dairy company. The company works together with CNS, a specialist in this field, for the PPA.
Value within the own chain
In the traditional model, in which electricity and GoOs are sold separately, several parties are active in the chain, with each party adding costs. Thanks to the company’s unique construction between the cooperative and it, it is possible to maintain this value within the dairy chain with direct contracts, and the producer is immediately rewarded in line with the market by its own dairy company.
With programmes such as Solar, Windv and Jumpstart, the company accelerates sustainable energy generation on the farm, thereby making an important contribution to the Dutch energy transition.