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GlobalFoundries signs multi-year power purchase agreement with Keppel

Bryan Wu
·3-min read

GlobalFoundries will become a long-term off-taker of electricity from the Keppel Sakra Cogen Plant when the plant is operational.

Nasdaq-listed chipmaker GlobalFoundries will become a long-term off-taker of electricity from the new Keppel Sakra Cogen Plant after signing a power purchase agreement with Keppel BN4 for the provision of electricity at its Singapore site on Jan 9.

The multi-year agreement, which is expected to commence on May 1, will see Keppel provide 150 to 180 megawatts (MW) of electricity each year to power GlobalFoundries’ Singapore operations, as its campus continues to ramp production following the launch of its latest Singapore Expansion facility in Sept 2023.

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GlobalFoundries is expected to contract around 25% of the upcoming Keppel Sakra Cogen Plant’s total generation capacity for more than 15 years when the plant, Singapore’s first energy-efficient and hydrogen-ready combined cycle power plant, becomes operational.

Powered by electricity from Keppel Sakra Cogen Plant, which is scheduled for completion in 2026, GlobalFoundries is expected to be able to reduce emissions from its Singapore site by more than 10% or up to 70,000 tonnes of CO2 emissions per annum, compared present levels.

In addition, the plant’s ability to use hydrogen as part of its feedstock will be able to provide GlobalFoundries with a resilient source of even lower carbon power in future.

As part of GlobalFoundries’ commitment to sustainability, it has preserved the option to switch a portion of the electricity supplied by Keppel to renewable energy, such as solar and wind, when these sources become more readily available in Singapore.

Tan Yew Kong, senior vice president and general manager of GlobalFoundries’ Singapore site, says: “We are confident that this partnership will help us ensure stable energy availability and maintain our competitive advantage, as we continue to deliver on our commitments to meet the demand for GlobalFoundries-manufactured essential chips.”

“Environmental performance is built into our Singapore facility, and we take a long-term perspective to integrate resource-efficient systems and processes into our operations,” adds Tan. “As more options for renewable energy become available in the future, we are committed to adopting more solutions to further decarbonize electricity generation, as well as invest in the necessary infrastructure to execute on our global Journey to Zero carbon strategy.”

Announced in Aug 2021, GlobalFoundries’ Journey to Zero carbon goal aims first to reduce the company’s total greenhouse gas emissions by 25% by 2030, despite a significant planned growth of its global manufacturing capacity.

The company says its contract with Keppel in Singapore reinforces its commitment to sustainability across its manufacturing and operations and marks another milestone in its Singapore site’s sustainability journey to maximize energy and resource efficiency.

Janice Bong, managing director for power and renewables of Keppel’s infrastructure division, says: “Keppel is pleased to support forward-looking customers who are playing an active role in managing their carbon emissions to enhance competitiveness. The signing of a long-term power purchase agreement with an established customer, such as GlobalFoundries, provides an added source of recurring income to Keppel’s electricity business, bolstering our growth on an even keel.”

“Amidst the energy transition, Keppel stands ready, with our highly efficient fleet of power plants and expertise in renewables and low carbon energy, to address the changing needs of companies seeking to decarbonise their operations,” she adds.

Shares in Keppel closed 12 cents lower or 1.69% down at $6.99 on Jan 9.

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