Cleaning Up Your Energy Act

As energy-conservation chatter has become as commonplace as discussions about today’s weather, retailers are drilling deeper into energy issues and seeking ways to further expand their reduction strategies. One area of focus that has emerged is “clean” energy management. Senior editor Katherine Field talked with Michael Nark of Prenova, Inc., who explained the importance of clean energy and why retailers should strive for it.

Chain Store Age: What exactly is clean energy management?

Michael Nark: Clean energy management is about conservation. It’s about reducing energy usage in a way that doesn’t contribute to incrementally putting CO2 back into the atmosphere.

CSA: Why should retailers be concerned about that?

Nark: Retailers can actually monetize their usage reductions. What that means is retailers can make money on the amount of energy they reduce on a sustainable basis by taking advantage of carbon-reduction credits. By reducing their carbon footprint, savings can be monetized and sold through the Chicago Climate Exchange [which launched trading in December 2003].

Additionally, there’s the environmental aspect of energy reduction. Over the next five to eight years, carbon-footprint reductions will be legislated and compliance won’t be optional. And finally, especially for retailers, the positive public perception that comes from energy conservation, particularly when it’s voluntary, can’t be underestimated.

CSA: How can a retailer best accomplish clean energy management?

Nark: When energy is conserved during the delivery of a solution by the vendor, and during the application of that solution by a retailer, the optimum in clean energy management is achieved. Our solution is delivered remotely: While we’re reducing usage for a retailer, we aren’t effectively increasing usage on our side, which can cancel out many of the benefits.

CSA: How do you remotely deliver services?

Nark: We directly connect to a retailer’s energy-related assets through their energy-management system (EMS)—either dial-up or via the Internet. Our network operations center (NOC) remotely downloads the EMS configurations, operating conditions and asset-performance data. We compare that information against customer-provided standards, such as temperature thresholds and facility opening/closing times. Often, these standards are significantly altered over time (e.g., a technician overrode a temperature set point during maintenance; a power outage upset time schedules; an employee altered closing time due to a promotional sale). Our NOC automatically reconfigures the EMS and connects assets back to the baseline.

Besides the fact that remote access allows maximum energy control without additional energy expenditures, it also underscores the clean component by permitting remote troubleshooting. Because remote access entails pro-active control and monitoring of lights, HVAC systems and refrigeration, it also allows quick identification when assets begin showing signs of early degradation. Remote analysis and correction can eliminate unnecessary service calls and prevent excess energy usage.

CSA: What are some specific ways that retailers can reduce energy in a manner that also reduces harmful emissions?

Nark: Retailers need to take an enterprisewide view of their energy consumption. The way to do that is to set up standard operating procedures for internal store environments across the portfolio. Just as there is a consistent look and feel for stores throughout a retailer’s chain, whether a store is in Fort Lauderdale or Las Vegas, there should also be standards for internal climates and controls. By establishing that standardization and remotely controlling those standards on a store-by-store basis, a retailer can experience significant monetary and energy savings.

There is also an incremental linkage to the optimal customer shopping experience, increased time-in-store, and greater customer retention, which ultimately means more revenue.

CSA: What can a retailer expect to achieve through this kind of strong energy-conservation program?

Nark: A retailer can expect between 8% to 15% energy-usage reduction. Getting there is an evolutionary process, starting on the supply side, then adding in the demand side. There’s a tightly integrated interaction between the structure of supply pricing and demand behavior. Understanding that interplay and analyzing trade-offs between pricing programs and usage-reduction initiatives optimize energy spend. Ultimately, retailers see both price and kilowatt-hour savings on their utility bills, and can parlay usage savings into the sale of carbon credits as further financial incentive.

Energy conservation isn’t about saving energy at a single point in time. An energy-conservation program focuses on measurable, sustainable usage reduction.