Utility companies are taking a proactive role in assisting retailers as they try to cut their energy and water bills

The carbon trading scheme that the UK’s largest retailers are being required to sign up to has put the spotlight on the measurement and management of energy usage.

But responsible retailers have already been working with their utilities suppliers over the past five years to reduce energy and water usage.

Whether, as a business, you are interested in cutting energy usage because you are compelled to or, more likely, because you want to minimise your operational costs, the starting point is the same. So what projects have retailers put in place to drive down their utilities bills?

The Carbon Reduction Commitment Energy Efficiency Scheme (CRC), the UK’s mandatory energy saving scheme, is leading businesses to collect more specific data. Once businesses know how much energy they are using, more accurate forecasts can be made and efficient technologies implemented to reduce energy use.

Making savings on energy bills has been high on the agenda for retailers. Waitrose has achieved a 22% reduction and John Lewis a 23% reduction in energy use since 2004, going beyond their target of 20% by 2010. Forecasting and recording energy usage can either be carried out in-house or outsourced to an energy company, such as British Gas. British Gas Business energy efficiency director Jeff Whittingham says about the annual CRC report: “Getting the data is quite a painful process. We bring it all together and compile it for retailers.”

Get smart

Tools like Encompass Professional, released by gas and electricity supplier npower last August can forecast energy consumption, taking into account variables such as changes to square footage or turnover, to create energy targets. Smart meters are increasingly being used to gather accurate data. Current legislation requires all medium to large businesses to install smart meters by 2014.

Smart meters for electricity, gas and water have been installed in nearly all Waitrose and John Lewis branches over the past 18 months.

Steve Isaia, head of feasibility, development and engineering at John Lewis, explains: “With traditional energy suppliers, the data wasn’t accurate, since bills are estimates and they often came too late. You can’t do much if a problem happened three months ago. Smart metering allows us to get accurate data the next day. So, for example, we can tell if the night blinds have been pulled over the fridges in Waitrose stores when they close. Problems or issues can be identified quickly and maintenance can go in or behaviour changed.”

Smart automatic sub-metering collects even more specific data, which has been installed in all John Lewis and Waitrose stores opened since 2009 and is a standard for new stores.

“We have sub-metering installed in more than 20 branches,” says Isaia. “It allows us to tell how much energy is being used by each process, like refrigeration, heating or cooling.”

This, in turn, allows more precise identification of energy waste. Efficiency of processes can then be assessed. Air conditioning plants in John Lewis stores were replaced in five stores in 2009 and in four more this year. This move creates a 25% to 30% reduction in the total energy bill for a store. Modern plants are more efficient, as they allow remote monitoring and control of the store conditions and plant operation. Smart sensors monitor the number of customers in the store at any time and adjust the conditions and energy usage accordingly.

However, not all processes can be automated and energy efficiency depends on the behaviour of staff, as well as the latest technology.

Isaia says: “We set up competition between stores of a similar type and size, making league tables available to staff.” He adds that instant data from smart meters can show actual energy savings made, which makes a stronger case with partners when it comes to allocating capital for energy reduction measures. Cost can inhibit improvements, and they do need validation before rolling out across an estate.

“Our eco-centres are test beds of innovation,” says Sainsbury’s head of climate change and environment Jack Cunningham. “We can work with technologies that are not yet at market and work with the supplier or entrepreneur to iron out problems with them. In our eco-stores, 80% of the technology used has to roll out into new stores or back into the existing estate.”

Sainsbury’s Westhoughton, Lancashire, store is one of these test beds. Here it introduced Europe’s first biomass generator. Four Sainsbury’s stores now have biomass boilers, which generate heat, and this equipment is being rolled out across the entire Sainsbury’s estate. The store in Westhoughton, which opened in February, burns wood pellets from renewable sources to create heat and, via a generator, electricity to power the store. Sainsbury’s predicts the generator will satisfy about 60% of its energy needs.

This store also has windows designed to maximise use of natural daylight and electric lights on automatic dimmers so less electricity is used on brighter days. Low-energy lighting is also in place throughout the store and car park.

Lighting is also a focus for Home Retail Group, where a trial of low-energy LED lights, starting this month in one store, could result in all Argos stores with jewellery counters switching to the new source. The lights are being changed from 35W halogen lamps to 4W LED lights. Electricity represents about 60% of energy use in Argos stores and the estimated saving in the test store is between 2% to 5% of energy consumption.

Managing usage

Remote control of systems is another way Home Retail’s Homebase and other retailers are managing their energy usage. 100 Homebase stores now have access to an Energy bureau, a central control system that went live last month. This controls the settings on the building management systems in the stores, such as turning power on and off.

“Every adjustment or override to the system is logged. This control brings in consistency and leaves less room for human error,” says group head of corporate responsibility Rosi Watson.

Similarly, energy companies can control this system. Whittingham says: “We manually control the heating, air conditioning and lighting for a major UK high street chemist with 150 stores.

“This allows, for example, a target temperature to be set and we can then switch off the lighting remotely, if that is necessary.”

Whether energy management is outsourced or kept in-house, it is clear retailers want tighter control on how much energy they are using.

So are these changes coming as a result of the CRC scheme? It doesn’t seem so.

“The CRC is one way of initiating change, but it is not a massive driver of change,” says Cunningham. CRC, he adds, is a crude measure of performance, rewarding latecomers that show a dramatic improvement, rather than those that have had climate change on their agenda for 10 to 15 years.

The CRC will bring transparency to green performance with an annual league table, putting the spotlight on the best and worst performers.

“We welcome the CRC, because there is so much ‘greenwash’ going on,” Isaia says. “But quoting facts and figures gives a more accurate representation of what organisations are doing.”

Energy definitely goes higher on retailers’ agendas when it is set as a competitive standard. Introducing automation and energy-efficient technology shows that retailers are realising that these improvements really do count, CRC or not.

Energy-Efficient Technologies

  • Biomass generators - Sainsbury’s estimates they will provide 60% of its energy needs
  • Smart air conditioning - reducing energy usage in John Lewis stores by an estimated 25% to 30%
  • LED lights - saving between 2% to 5% of store energy usage in Argos trial