Renewable Energy for BHP Billiton: Framework and Application to BHP Billiton's Global Assets

Abstract

Two major factors have generated global interest in the development of renewable energy among corporations: • The scientific, political, and societal consensus around the fact of global warming, its human causes, and its potential catastrophic impacts. • The tightening supply, surging demand, and subsequent soaring prices of certain fossil fuels and concerns about energy security. These factors have motivated escalating government action to reduce greenhouse gas emissions and diversify energy portfolios. Furthermore, mounting activism around these issues has led to an increase in corporate social responsibility and sustainability initiatives. This context has spurred corporations to consider reducing their greenhouse gas emissions and intensity through energy efficiency initiatives, renewable energy projects, and greenhouse gas (GHG) emission reduction projects. These external factors, combined with a variety of regional, and industry-specific factors have led global metals and mining company BHP Billiton to evaluate opportunities for the adoption of renewable energy. These factors include: • BHP Billiton’s significant energy demand • The importance of energy to BHP Billiton’s costs and revenues • BHP Billiton’s position as the industry leader • The company’s climate change policy and specific GHG emissions reduction targets • BHP Billiton’s desire to comply with legislative requirements for renewable energy • BHP Billiton’s need to manage its reputation and enhance its “license to operate”1 These factors, combined with the company’s relative inexperience with renewables, and the need to consider the application of a broad range of emerging renewable energy technologies across a diverse set of global assets2, have motivated our study. 1