With energy costs soaring and customers rewarding sustainable behaviors, many convenience store chains are realizing the need to upgrade stores to be more energy efficient.
World marketed energy consumption is projected to increase by 44% from 2006 to 2030, according to the U.S. Energy Information Administration (EIA). The increase could hit c-store retailers especially hard as newer, bigger units will require more energy to power fuel pumps, refrigerators, coolers and foodservice equipment.
“If you look at your bottom line, after labor your utilities are up there within your top three lines as far as costs,” noted Denny Fee, director of store maintenance, United Dairy Farmers (UDF), which operates about 185 c-stores across Ohio, Kentucky and Indiana.
In late summer 2009, UDF rolled out Emerson Climate Technologies’ Einstein (E2) Facility Management System at a test facility, and then at its new stores to more efficiently monitor and manage energy consumption.
“With energy costs continuing to go up, we wanted to try and save money on our peak demand as well as our usage,” Fee said. “Being able to control our peak demand as well as our current kilowatt (kW) factor, we found we could save money. By using the different sensors we put in on refrigeration units, we could become more proactive rather than reactive to emergency calls. Logging all of the temperatures daily, we could go back as far as 14 days and look at different patterns on pieces of equipment. It has really given us a better picture of the store from one central spot.”
Currently, the system is in roughly 140 of its 185 stores, and once the final shipment arrives it will be rolled out to all its locations.
Using the system, “we program a set point per kW, and once it reaches that set point we start to (turn off) various pieces of equipment for a period of time to keep our set point under our usage. The demand works the same way,” Fee said.
The company also worked with different utilities in Ohio, which reset UDF’s ratchets, so the company was billed at a certain peak demand rate every month for 11 months. “Your highest peak demand for an interval of 15 minutes is what your peak demand and your billing rate is based on. Even if you don’t maintain that peak in a certain month, you’re still paying 95% of peak demand,” Fee said. “We try to lower our overall peak demand throughout that 11 month period, so it lowers our billing rate, as well as control our usage.”
UDF has seen a savings of between 7-10% on usage and 5-7% on its peak demand since adding E2.
Inspired by Rebates
Working with local utility companies also can help lower the costs of becoming more energy efficient. Fee found that some of the local utility companies offered the chain rebates for putting in the E2 system. For every Einstein UDF installed, which, including equipment, ran about $7,500, it received a $2,490 rebate from Duke Ohio utility company, as well as similar rebates from other utility companies. Thanks to their incentives, Fee expects an ROI in about 39-42 months per store.
Stripes, the retail arm of Susser Holdings Corp., which operates more than 520 stores in Texas, Oklahoma and New Mexico, also has been inspired by rebates. The chain is working to make more than 440 Stripes stores throughout Texas more energy efficient and has a chance to collect up to $175,000 in rebates under the TXU Energy Co.’s Energy Efficiency Rebate Program.
The 29-month contract represents an annual load of 155,000 megawatt-hours (MWh), enough to power 8,600 homes. Under the rebate program, many stores will upgrade their HVAC controls, retrofit fluorescent lighting fixtures and implement LED lighting technology inside freezers and under exterior canopies.
“The rebate program not only provides strong incentives for our convenience stores to be more energy efficient, but it also helps us do our part to make a positive impact on the environment,” said Mary Sullivan, chief financial officer for Stripes. “We look forward to seeing how this program and our efforts to switch out lighting in our stores and upgrading to more energy efficient air conditioners throughout west and south Texas impacts the bottom line.”
Saving on Costs
UDF also upgraded the lighting in its walk-in cooler displays and self-contained three-door freezers to LEDs. Since the project will pay for itself in under four years, Fee said it made sense to make the change.
Currently, UDF is in the midst of replacing its canopy lighting to LEDs at stores in the Duke Ohio utility area—all stores from Cincinnati to just south of Dayton, Ohio. Each canopy will cost roughly $4,500, but the chain will be using about one-third of its normal energy consumption with LEDs as opposed to the 320 watt down lights. Early comparisons showed this would save UDF roughly $8-$10 a month.
“This is one of the best things we’ve done in probably the last 10-15 years,” Fee said.
“LEEDing” the Way
In an effort to increase its energy efficiency, Kwik Trip decided to pursue Leadership in Energy & Environmental Design (LEED) certification.
“We’ve always done things to conserve energy because it made good sense for business and to control expenses,” said Erik Peterson, director of store engineering for Kwik Trip, which operates stores in Wisconsin, Minnesota and Iowa. “There are so many different ways to become green, so LEED gave us a framework to work within that was a nationally recognized step in the right direction. We were working within a program that was already defined and evaluated.”
Currently, Kwik Trip has one store already certified and about 15 others that are registered and working toward certification. Every new store the chain builds going forward will also be registered for LEED certification. The chain also is adding LED lighting to each of its new stores and is in the process of retrofitting existing stores with LEDs.
“We use LED bulbs in our walk-in coolers and freezers, exit lighting and within the last 12-18 months we’ve started to use LED on the fuel canopy and parking lot lights at new stores,” Peterson noted.
Kwik Trip’s LEED stores are saving it about 14% in costs above non-LEED buildings, and saving it 20% more than a store would if it ran at a code baseline.
“We were already moving toward developing efficient stores, so LEED for us encompassed a lot more than just the energy efficiency,” said Leah Berlin, landscape architect/LEED coordinator for Kwik Trip. “We also focused in on water efficiency, building materials and reevaluating air quality in stores. One of the main things as far as energy was adding a rack system that eliminated individual compressors for all of the refrigeration in the coolers and freezers. We’re also changing the motors in refrigerated cases to be more energy efficient.”
About six years ago the chain began reclaiming heat, taking the warm air emitted from its refrigeration equipment and using it to preheat water going into the water heaters and boilers.
Small mindful steps can also make a difference. For example, the lights at Kwik Trip stores are controlled by timers. The schedule is set at corporate based on historical usage and the time of the year. On the exterior, stores were upgraded from asphalt shingle roofs to metal roofs, which last longer, hold interior temperatures better and are less prone to leaks. “The roof and the LED lights were probably the biggest items where we saw a cost jump, but once you factor in longevity and the savings on maintenance, we’ll come out ahead,” Berlin said.
Berlin herself is a
LEED accredited professional, which has been a nice find for Kwik Trip. “Having a person like that on staff and not having to go out and contract with a company to hire someone who understands the codes has been a huge help for us,” Peterson noted.
Reaping the Rewards
Kum & Go, which operates 430 stores in 11 Midwestern states built a few dozen stores that would have been close to qualifying for LEED before it embarked on the LEED certification route at two of its Des Moines, Iowa stores.
“The cost was not significantly higher than the other stores we have been building. If I charted the costs of the last 20 stores we built, you wouldn’t be able to pick the two LEED stores out of the group,” said John Feldman, vice president of construction for Kum & Go. “There where additional costs, in the range of 5-10% compared to the very efficient stores we had been building.”
However, he estimates the energy conservation elements will have a five-year payback.
Being sustainable has also helped business in other ways. “Many of our customers understand, respect and reward our commitment with their business,” Feldman said. “We have found cities take us very seriously when we say we are building an environmentally-friendly store, even if the proposed store is not slated for LEED certification.”
Most retailers agree, being energy efficient and upgrading their “green” commitment is a necessary step that is here to stay. “It’s the way of the future,” said UDF’s Fee. “If you want to stay in business and you want to be competitive, to me, it’s a no-brainer you have to become more energy efficient.”