Valmont Industries reduced their scope 2 by approximately 10,000 metric tons in 2020
in electricity usage, 2018 - 2020
in 2020 revenue, an increase of 4.6% from 2019
The Path to Drawdown: Irrigation and Smart Grid
Irrigating farmlands is energy intensive. Agriculture consumes 70% of the world’s freshwater and irrigation is essential for 40% of the world’s food production. Pumping and distributing all of that water requires lots of energy, and most forms of energy generation are sources of carbon emissions.
Flood irrigation, where water is allowed to run down the field by gravity, is the least efficient method. Drip and sprinkler methods are far more efficient, yielding water and GHG savings as high as 25% and 40%, respectively.
Today, the use of sprinkler and drip irrigation varies widely around the world, from 50% of farm area in high-income countries to 7% in lower-income countries in Asia and Africa.
Project Drawdown projects that a rapid adoption of efficient irrigation techniques can lead to a wide reduction in GHG emissions:
- In 2018, 53.8 million hectares were irrigated using efficient methods
- By 2050, 187.7-286.5 million hectares should be watered using these methods, with the highest adoption increases occurring in Asia
- This can help avoid 1.1-2.1 gigatons of CO2 emissions and save 37-68 billion gallons of water by 2050
Renewables like solar and wind are the promising alternatives to fossil fuel-based energy, and they’re quickly expanding their capacity worldwide. But to provide reliable clean energy to every household and organization, we need a smart power grid.
The power grid is the dynamic network of power generation, transmission, distribution, storage, and consumption. Today’s power grid was designed more than a century ago, when electricity needs were simpler. It relies on a handful of (mostly fossil fuel-based) power stations, and electricity only flows one way from power stations, to transmission stations, and finally to consumers.
This centralized, one-way grid system is economically inefficient because consumers often can’t plan for the fluctuations in the price of electricity throughout the day. It’s vulnerable to blackouts when power lines break or when power stations can’t generate enough power to fulfil demand. It doesn’t easily integrate renewables like solar and wind power, whose electricity generation is intermittent.
The smart grid can overcome these weaknesses. By integrating sensors and software to the existing grid, it gives utilities and consumers the information they need to understand and quickly react to changes in the supply and demand of electricity. With smart meters, consumers can plan their electricity usage according to its price, lowering the cost of electricity to households and overall demand during critical periods. Through data and automation, the smart grid can integrate and optimize solar and wind generation, even with their intermittent nature. This also means power generation becomes decentralized and adaptable, reducing the likelihood of blackouts and price fluctuations.
Valmont Industries (stock ticker: VMI) manufactures center pivot and linear irrigation equipment, windmill support structures, lighting and traffic poles and steel utility poles. Headquartered in Omaha, Nebraska, they do business in over 100 countries
VMI's Role in Drawdown
Valmont Industries advances two Drawdown solutions: grid flexibility and farm irrigation efficiency
Their Irrigation segment (p. 7) manufactures agricultural irrigation equipment, parts, services, tubular products, and advanced technology solutions for water management and precision agriculture. Their irrigation machine is powered by electricity and propels itself over a farm field and applies water and chemicals to crops through sprinklers. These machines can rotate in a circle or move linearly to irrigate square, rectangular, and irregular fields. This segment accounted for 22% of Valmont’s total revenue in 2020 (p. 25).
Their Utility segment (p. 5-6) helps deliver power with products to better harden grids to make infrastructure more resilient. It manufactures and sells engineered steel and concrete structures for utility markets, including transmission, distribution and substation products, and renewable energy generation equipment. It also manufactures complex steel structures like rotor houses for wind turbines, crown-mounted compensators, and material handling equipment for manufacturing. 34.6% (p. 25) of Valmont’s overall revenue in 2020 derived from their utility support structures business.
VMI: What We Like
We are encouraged by Valmont’s proactive stance toward sustainability and climate change. They have an early track record of reducing their environmental and carbon footprint:
- Valmont’s sustainability projects helped conserve 0.5 MW of electricity, 1.4 million gallons of water, 2k gallons of liquid fuels, 138 metric tons of waste. Combined, these sites helped avoid more than 374 metric tons of carbon.
- They also completed installation of a 1 MW solar field (p. 15) utilizing their own solar solution, providing carbon free power that will offset ~6% of energy on campus
- In 2020, Valmont began the process of replacing 100 fossil fuel-powered vehicles with electric equivalents at their Valley Campus. This would reduce CO2 emissions from that site by 131 metric tons annually.
- Their Green Teams have succeeded (p. 19) in saving 3.23 million KWh of electricity, 20,594 gallons of fuel, 1.7 million gallons of water, and diverting 10,873 tons of waste from landfills in 2020.
These efforts combined have helped Valmont reduce (p. 22) their scope 1 emissions by 3% and scope 2 emissions by 13% between 2018 and 2020.
Further, Valmont has set down a number of sustainability targets (p. 18) to be achieved by 2025, with 2018 as their baseline year:
- Reduce carbon emissions intensity by 10%
- Additional reduction in electricity usage by 12%
- Reduce scope 1 emissions from transportation source by 19%