HANESBRANDS RENEWABLE ENERGY PRIORITIZATION by Serkan Erdem, MEM Duke University Xiaonan Feng, MEM Duke University Joseph Moss, MEM Duke University Liam Regan, MEM Duke University Will Yang, MEM Duke University Dr. Gale Boyd, Adviser 04/28/2017 Masters project submitted in partial fulfillment of the requirements for the Master of Environmental Management degree in the Nicholas School of the Environment of Duke University Table of Contents Legal Statement and Master’s Project Scope ................................................................................... i Executive Summary ......................................................................................................................... i Introduction ..................................................................................................................................... 1 I. HanesBrands Background ........................................................................................................ 1 II. Hanes Energy/Sustainability Efforts & The Duke Master’s Project Goals ............................ 1 III. Brand Analysis ...................................................................................................................... 3 IV. 10K Analysis ......................................................................................................................... 4 V. Competitor Analysis ............................................................................................................... 7 Literature Research ......................................................................................................................... 9 I. Synthetic Power Purchase Agreements ................................................................................... 9 Contract for Differences ........................................................................................................ 10 Options .................................................................................................................................. 11 Pure Commodity Hedging ..................................................................................................... 11 SPPA Advantages .................................................................................................................. 11 SPPA Disadvantages ............................................................................................................. 12 II. Is Biomass Renewable? ........................................................................................................ 13 Materials & Methods .................................................................................................................... 13 I. Materials and Data Inventory ................................................................................................. 13 Master File ............................................................................................................................. 14 Utility Bills ............................................................................................................................ 15 Interval Data .......................................................................................................................... 15 II. Methodology ......................................................................................................................... 16 Feasibility Database and Utility Tariff & Decision Analysis Tool ....................................... 17 Geo-Market Research and Facility Deep Dive ...................................................................... 19 NREL SAM Modeling for High Priority Renewable Energy Projects ................................. 21 Site Analyses ................................................................................................................................. 22 I. Asian Countries ...................................................................................................................... 22 Asia, 1 .................................................................................................................................... 22 II. Central American Countries ................................................................................................. 25 Central America, 1 ................................................................................................................. 25 Central America, 2 ................................................................................................................. 27 Central America, 3 ................................................................................................................. 31 Central America, 4 ................................................................................................................. 33 Central America, 5 ................................................................................................................. 34 V. North American Country ...................................................................................................... 35 North America, 1 ................................................................................................................... 35 North America, 2 ................................................................................................................... 38 North America, 3 ................................................................................................................... 39 North America, 4 ................................................................................................................... 41 Energy Management Tool Results ................................................................................................ 42 Energy Management Tool Metrics ............................................................................................ 42 Energy Consumption ............................................................................................................. 42 Energy Demand ..................................................................................................................... 44 Energy Spend Total ............................................................................................................... 45 Blended Rate versus True Cost of Energy ............................................................................. 46 NREL SAM Results ...................................................................................................................... 48 IV. Synthetic PPA ..................................................................................................................... 51 Southeastern Texas ................................................................................................................ 51 Recommendations ......................................................................................................................... 52 Overarching Recommendation .................................................................................................. 52 Geo-Market Research & Deep Dive ...................................................................................... 56 NREL SAM ........................................................................................................................... 56 Renewable Energy Credit Purchases ......................................................................................... 58 Discussion & Conclusion .............................................................................................................. 59 Discussion ................................................................................................................................. 59 General ................................................................................................................................... 59 Biomass ................................................................................................................................. 59 Unexpected Results ............................................................................................................... 60 Carbon Pricing ....................................................................................................................... 61 Further Research .................................................................................................................... 62 Conclusion ................................................................................................................................. 64 References ..................................................................................................................................... 66 Appendix ....................................................................................................................................... 73 Appendix A: Competitor Analysis ................................................................................................ 73 Nike ....................................................................................................................................... 73 H&M ...................................................................................................................................... 73 Levi Strauss & Co .................................................................................................................. 74 Jockey International ..............................................................................................................