Conspicuous Consumption

by Katie Lee

Where does it all go? How to manage energy for deeper savings and greater sustainability.

By Yaniv Vardi

Energy is one of the largest and constantly increasing expenditures for retail companies worldwide. According to the U.S. Department of Energy, retail buildings — including freestanding stores, malls and retail chains — make up nearly 16% of commercial building space nationwide and spend more than $27 billion on energy each year. Rising energy costs, coupled with an increase in erratic weather, make it increasingly critical to monitor, analyze and manage energy consumption.

While many retailers have a lot of data about aggregate energy consumption, most don’t understand how energy consumption is used and distributed. Add that to expanding footprints, non-standardized store formats, aging energy infrastructure and unstable energy prices and you have a recipe for energy waste and higher energy costs. These challenges are multiplied when retailers manage energy costs, procedures and operations across hundreds of sites.

Consider this winter’s record-breaking polar vortex weather pattern, when deep cold affected more than 80% of the country, including areas like the Southeast that are unaccustomed to such extreme temperatures. Data collected from more than 4,000 sensors located at 250 of our retail and commercial sites revealed a 30% off-hour increase in energy consumption and a 30% increase in consumption during operating hours.

Retail managers at most of these facilities could have used real-time insight into the energy use of their facilities, which would allow them to make real-time adjustments in response to weather patterns or disruptions in building use. This would have led to immediate savings, but instead many of these buildings consumed far more energy than was necessary.

Many retailers optimize their energy use, but do so after the fact by analyzing bills or by trying to make sense of large amounts of data from their building management systems. There is an easier way.

A new wave of affordable technologies allows retailers to optimize their energy consumption, improve operational efficiency and generate income through load response programs. These technologies encompass real-time monitoring of energy use and smart analytical tools that make sense of large amounts of energy data quickly and easily, giving retail facilities and companies that ability to spot trends, reduce energy use and even accomplish preventive maintenance.

Transparency leads to action

Retailers have made strides in identifying energy efficiency opportunities and weaving energy reduction programs into their corporate social sustainability goals. However, until the advent of circuit-level energy monitoring, their efforts rarely allowed them to go beyond infrastructure and equipment, nor did they give managers at different levels granular visibility into energy consumption.

When wireless sensors are installed on each circuit of a building, the comprehensive, real-time data available shows energy use patterns and inconsistencies that can identify opportunities for savings. Alerts are sent on the fly when exceptions occur, when energy thresholds are reached and when common patterns are not followed. Analyzing alerts allows the diagnosing of widespread problems, short term incidences and long term trends — all data that informs energy planning.

Even more important, the sensors can also detect critical equipment failures, prompting equipment repair and maintenance, rather than waiting until equipment fails and requires replacement.

Outdoor retailer The North Face has direct experience in reducing costs and performing maintenance before equipment failure strikes. By installing circuit-level energy management solution in four of its highest trafficked retail locations in California, managers received real-time data from critical systems, including HVAC and lighting, which resulted in significant cost savings. In fact, The North Face realized a full return on its investment in the system within 18 months.

Large retail facilities can be even more challenging, particularly when managers at various levels only understand the energy use of particular pieces of a building. By sharing useful data across the management team, everyone gets a more complete picture of how buildings perform. This knowledge dictates more efficient operations and maintenance protocol, as well as the capital spending for upgrades and retrofits.

Making data useful

The world is awash in data, and retail facility management professionals can easily be overwhelmed if the data can’t be parsed to make informed decisions. While collecting, benchmarking and analyzing energy efficiency data is not a new concept, today’s technology allows facilities to use data smartly. There is tremendous value in understanding energy data.

Cloud-based platforms provide users with a powerful, easy-to-use, visual dashboard that makes monitoring, analyzing and reporting simple and fast. Customized reports summarizing consumption, insights and consumption comparisons by site can be sent to stakeholders on a regular basis.

In addition, the best energy monitoring and analysis systems no longer require the use of a desktop computer. Instead, data can be viewed remotely and outside the office via computer, laptop, mobile phone or tablet.

One multibillion-dollar global fashion retailer sought an improved means of not only tracking, managing and reporting energy consumption data, but also analyzing this data to help it reach robust corporate sustainability goals. This particular chain reports its carbon footprint to various government bodies and its global environmental policy strives for continuous improvement.

Using a device-level energy management solution reduced off-hour energy consumption waste for this chain by 30% in the first month, which contributed to the company’s positive sustainability reporting. In addition, the company was able to benchmark stores nationwide to provide valuable insight into efficiency improvement across all locations.

Creating a sustainable culture

New technologies of energy monitoring can be considered the “next generation” of energy efficiency, allowing companies to take a deeper dive into savings. This means energy is becoming a strategic asset to be leveraged, rather than a fixed cost. The power of these technologies will bring about the 21st century’s deep and lasting energy efficiency initiatives and push retailers to the next level of energy savings.

As more and more retailers gain insight into real-time and device-level energy use, setting even more meaningful sustainability goals becomes easier. 

After realizing that 70% of the company’s energy load came from large distribution centers, another global retail chain implemented an energy management solution at a key center to save money and energy, as well as to establish a baseline for performance and benchmarking for other centers. The solution resulted in an estimated $50,000 in annual energy savings for one distribution center, a 6-month return on investment and a significant reduction of after-hours energy consumption. The solution also identified two failed economizers, which resulted in modified control sequences to limit compressor engagement and stabilizing the operation schedule to save on maintenance costs.  

Energy costs rise and fall on a regular basis, but over the long term, most predict energy costs will continue to increase. Retailers willing to take the next step in energy efficiency and manage energy use dynamically — just as they manage merchandising and staff costs — will be the ones who stand to reap greatest gain over the coming years.

— Yaniv Vardi is the CEO of Panoramic Power, a leading provider of demand side energy management services, which enables businesses to optimize energy consumption, improve operational efficiency and generate income through load response programs. Email [email protected].

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