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Small Efficiency Changes Save Big Bucks, Report Says

Submeters, consumption analysis and maintenance of existing systems are three low-capital ways that companies can significantly reduce their energy consumption, according to a new report from Verisae.

The software provider’s report, Ten Ways to Slash Energy Cost & Reduce Budget Uncertainty, focuses on grocery stores, which Verisae says consume the most energy of any retail segment and operate on the narrowest margins. “Consequently they have both the strongest incentive and the largest opportunities to enhance profit through energy management,” the report says.

Verisae says its recommendations come from over ten years of working with dozens of leading grocery retailers in the United States and Europe, including Supervalu, Tesco, Sainsbury’s, Walmart, Target, A&P, Fresh & Easy Neighborhood Market, Costco, Ahold, Giant Eagle, Hy-Vee Food Stores, Ingles Markets, Marsh Supermarkets, Bashas’ and Coborn’s.

But the recommendations, with their emphasis on day-to-day operations rather than large capital projects, are likely to have a broader appeal. Verisae said the report applies particularly to other large retailers, especially drug and convenience chains, mass merchants, discounters, department-store retailers and big-box specialty retailers.

Some of its recommendations:

Understand the energy efficiency of all the equipment in your stores. Verisae noted that the energy consumption of a single model of equipment can vary dramatically from manufacturer’s specifications and third-party performance ratings, and can also vary from one store to another.  Relying on averages and published numbers will produce inaccurate projections.

Submeter your stores. This is necessary to determine how much electricity is used for refrigeration versus heating, lighting, ventilation and air conditioning (HVAC), and other uses, Verisae says.

Monitor energy consumption in real time. This information allows companies to make same-day decisions to eliminate sources of waste before they incur the costs. The experience of several large grocers suggests that this capability alone can save as much as two to five percent of total utility costs, Verisae says.

Understand the effects of facility and equipment-maintenance activity on energy cost. Equipment that needs maintenance is likely to consume more energy, the report noted. Every time a service technician resets a thermostat or a timer in a store, energy consumption goes up or down. And if a piece of equipment starts using more and more energy, that may signal the need for maintenance.

Understand the changing relationship between energy demand and cost. Real-time energy pricing has already arrived in some utility markets, and it appears to be on its way in many more, the report said. As real-time energy pricing becomes more prevalent, all energy users will pay more for the energy they consume during hours of peak demand.

Capture and analyze complete and accurate data from your utility bills. Few grocers collect all of the data from their utility bills, Verisae said. And industry studies show that one to three percent of all utility bills contain billing errors, the report added.

Verisae noted that some of the biggest efficiency gains will still come from large-scale capital projects. “New-store design, refurbish and retrofit projects present the biggest opportunities to make dramatic and long-lasting improvements in energy efficiency and budget certainty,” the report said.

But it said that companies that have made continuous, small improvements have reaped huge rewards over time.  “Considering the current tightness of budgets, fine tuning may be as much as you can hope to do until the economy improves,” Verisae added.

Correction: This story originally referred to Verisae as an “environmental consultancy”. It is an enterprise software provider.

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One thought on “Small Efficiency Changes Save Big Bucks, Report Says

  1. This is a worthwhile report and provides some solid recommendations. As noted, supermarkets operate with very thin profit margins and have high energy intensities. Every $1 they save on energy costs is the equivalent of $59 in sales. This demonstrates the high ROI for energy efficiency and energy management for retail businesses. For small businesses, it is difficult to justify investing in energy efficiency due to high upfront costs and long payback periods. However, making these types of simple, low-cost recommendations that generate a high ROI can help to overcome those barriers and imcrease market penetration.

    – Tim Kovach
    Product Coordinator, Energy Programs at COSE
    http://www.cose.org/blog
    http://www.twitter.com/COSEenergy

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