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Energy consumption

Energy use from our facilities accounts for two-thirds of GSK’s global energy consumption. In 2005, we used 19 million gigajoules of energy which produced emissions of 1,759 million kg CO₂. We bought 43% of our energy as electricity and a small amount (about 1%) as municipal steam or hot water. We generated the rest at our sites.

In 2005 we consulted, inside and outside the company, on a position statement on our future use of energy. This was drafted in 2004 in response to stakeholder feedback that energy use and its impact on global warming are key concerns. The draft position sets out a strategy for energy efficiency, renewable energy and emissions trading.

We continued to work on energy efficiency initiatives in 2005, as demonstrated by the following site projects:

• Stevenage, UK - installed solar-powered street lights
• Port Fairy, Australia - assessed wind turbine and bioenergy potential
• Nashik, India - installed solar heating for canteen hot water
• Research Triangle Park, US - increased its sponsorship level in the state green power programme, which will add more than 700,000 kWh of renewable energy to North Carolina's power supply
• Zebulon, US - saved energy by better control of laboratory lighting, introducing motion-activated lighting and reducing the temperature of the office buildings by 2 degrees
• US Pharma and R&D Site Operations - created the Strategic Energy Leadership Council to bring together managers with a common interest in energy management to provide leadership on energy matters. The Council has implemented energy and utilities initiatives that have saved in excess of $2 million, including an Energy Conservation Tracking database and Energy Technology Workshops
• Suzhou, China - modified the chilled water system to avoid using the chiller when the air temperature is low enough to ensure cool water. This has saved an estimated 550,000 kWh of electricity in a year.

Emissions trading
A number of our UK sites participate in the government's emissions trading scheme (ETS) - helping us to gain experience in carbon trading. The UK ETS is a voluntary scheme which rewards companies with lower energy taxes if they improve energy efficiency. Sites that keep emissions below an agreed target can “bank” the spare credits to help comply with limits in subsequent years, or they can sell the credits to other participants in the scheme. We achieved the required emissions in the target year, 2004 and are on course for the next target year, 2006.

The European Union trading scheme came into force at the start of 2005. The first phase runs from 2005 to 2007 and sites with greater than 20 megawatts of installed combustion capacity are required to participate. In total, 16 GSK sites will be regulated under this scheme. Our performance in 2005 has been verified by external auditors and although some sites have exceeded their cap, we anticipate that overall we will have surplus carbon credits under this scheme. We plan to bank some of these credits to help us comply with future limits, and expect to trade the remainder of the credits.

Performance

Total energy consumption increased by 2% from 2004 to 2005 (but decreased by 8% since 2001). Energy consumption per unit sales decreased by 4% from 2004 to 2005 and 13% since 2001, so we have met our 2005 target of an 8% reduction per unit sales since 2001.

Global Manufacturing Supply (GMS) and Research and Development (R&D) have the greatest impact on GSK’s energy consumption profile. They account for 59% and 26% of GSKs energy consumption respectively. In 2005 R&D used almost 4% more energy because it is expanding as products move through the R&D pipeline. This is partially offset by energy efficiency initiatives to keep the increase in energy use to a minimum. Energy managers are working on projects to improve energy efficiency so that the expanded activity will not require an equivalent increase in energy use.

Our Primary Supply & Antibiotics group within GMS reduced its total energy use by more than a third since 2001 - the greatest reduction of any GSK supply group or operation over the same time period. This significant reduction was the result of a focus on energy efficiency and a coordinated effort to identify and implement site-specific programmes at the sites in that supply group.

Total global warming potential from energy use at our facilities increased less than 1% from 2004 to 2005 but decreased by 8% since 2001. Global warming potential per unit sales decreased 5% since 2004 (13% since 2001) – meaning we have more than met our 2005 target of an 8% reduction per unit sales since 2001.

Sulphur dioxide and nitrogen oxides
In 2005, 87,842 kilograms of NO_x and 364,014 kilograms of SO₂ were emitted from sites with coal-fired power.

Note to energy charts
Energy consumption at our facilities is defined as all energy consumed in the form of electricity and steam purchased and fuels burned in fixed combustion equipment on site, including emergency generators. Figures include fuels used to generate steam and electricity on-site but not fuel for on-site transport.

The global warming potential from energy use at our facilities is calculated using conversion factors from the World Business Council For Sustainable Development (WBCSD) / World Resources Initiative (WRI) Greenhouse Gas Protocol Initiative, September 2001, its Stationary and Mobile Combustion Workbooks, and the Intergovernmental Panel on Climate Change (1996).

The NO_X and SO₂ are calculated from the coal used at the only two GSK facilities(in India) that use coal, using conversion factors from the National Atmospheric Emissions Inventory (UK national methodology).

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