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News Room: Industry News

Meccas of Shopping Try Hand at Being Misers of Energy

Thursday, April 12, 2012   (0 Comments)
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FOR most people, talking about commercial air filters is a great way to end a conversation. To Charlie Brantl and Bob Devine, it is an invitation to an hourlong discussion.

They are engineers, in charge of finding ways to conserve energy and reduce waste at the Mall of America south of Minneapolis, the country’s largest shopping and entertainment complex. And they talk excitedly about everything related to saving energy, including skylights, low-flush toilets and, yes, commercial air filters.

Their enthusiasm is a prime reason the Mall of America, now in its 20th year, can claim to continually reduce costs through conservation. But it is a complicated process because the mall is not just large, but also composed of hundreds of enterprises — stores, restaurants and an amusement park. And it is heated not conventionally but by skylights, electric lights and the body heat of 45 million visitors annually.

Still, because the Mall of America is so vast — 4.2 million square feet and growing, a space that could fit seven Yankee Stadiums — companies with energy savings to sell clamor to have Mr. Brantl and Mr. Devine test and, they hope, order their products. As a result, the mall has become a proving ground for the most energy-efficient and reasonably priced technology.

"We get calls about new technology and dig into it and see if it is smoke and mirrors,” Mr. Brantl said, adding that many products he sees do not meet his employer’s requirement that investments pay for themselves in energy savings within four years. "We only purchase what we’ve tested.”

The Mall of America is among the many companies investing more in energy efficiency. For years, "conservation was sometimes seen as a penalty, a heavy cost, a cutting-back, a reduction in living standards, a form of self-denial,” Daniel Yergin wrote in his book "The Quest: Energy, Security and the Remaking of the Modern World.”

That view has changed, he and others say, because developing nations are consuming more of the world’s resources, leading to higher costs for all in a sluggish economy. To many, energy efficiency has become the "Fifth Fuel” — aftercoal, petroleum, nuclear power and renewables like wind and solar — and an important way to address environmental concerns likeglobal warming.

But unlikewind turbines, solar panels and other technologies that increase supply (or replace dirtier energy), conservation reduces demand, which can be more difficult to calculate and justify financially.

"Energy efficiency is a negative,” said Ben Finkelor, the executive director of the Energy Efficiency Center at the University of California, Davis. "It’s easier to say how many kilowatts we produced. Calculating the kilowatt avoided is much harder.”

Energy conservation got its first lift after the oil shocks of the 1970s, and some of the measures taken by President Jimmy Carter have worked. The United States uses only half as much energy for the same economic output as four decades ago, Mr. Yergin said. And while the economy has almost tripled in size, adjusted for inflation, total energy use has grown only about 30 percent, he said. President Obama has made energy efficiency a priority as well. Last year, he announced the Better Buildings Initiative, setting a national target of improving energy efficiency in commercial buildings by 20 percent by 2020. If met, that goal would reduce the energy bills of American businesses by $40 billion a year. Many industries and service providers have embraced efficiency. Hotels are using fewer towels, banks are going paperless, and grocery stores are rewarding customers who use their own bags.

Retailers and shopping malls, though, provide one of the best chances to save energy, Mr. Finkelor said — and not just through the consumer energy-saving gadgets sold at home improvement stores and departments. Retailers themselves use about 20 percent of the energy consumed by all commercial businesses, and they are the fastest-growing commercial category of energy users, according to the Energy Department.

Retailers invested more in energy efficiency during therecessionto offset declines in consumer spending, take advantage of state and federal tax incentives and meet demands from shareholders to cut costs. Wal-Mart, for instance, has been painting store roofs white to reflect sunlight and reduce the use of air-conditioning. It is also capturing rain in storage tanks for flushing toilets and other uses that do not require potable water, and installing LED lights in parking lots to cut energy use by more than 50 percent and maintenance by more than 30 percent.

"The bottom line for us is we’re really committed to our mission to save our customers money, which means preserving everyday low prices, which means having everyday low costs,” said Kim Saylors-Laster, the vice president of energy at Wal-Mart, which aims for a three-year payback on its investments in energy efficiency projects.

The Mall of America is installing more efficient air filters in its 33 mammoth cooling units. The new filters eliminate the need for more than 3,000 pre-filters to be changed each year, which reduces waste. And because the new filters are thinner, they require less power to push air through them.

Macy’s has cut its energy bill by 30 percent since 2002 by, among other things, adding sensors that automatically turn off lights in stockrooms, turning off signs at night and installing one million LED lights, according to Bill Lyon, vice president of energy management. Macy’s centrally schedules and controls its lighting and air-conditioning and monitors energy use to spot waste. "Twenty years ago, we’d get information on energy use in a report at the end of the month,” said Daniel Butler, vice president of retail operations at the National Retail Federation. "Now, we can quickly address it in a day.”

Challenges remain. Retailers with older stores must spend more to retrofit them. Mall operators are also trying to move away from leases that include energy costs because tenants have less incentive to conserve. Instead, they are installing meters in individual stores to track use and having the tenants pay their own energy bills, encouraging them to save energy, too.

Retailers are also signing long-term deals with utilities and, when possible, installing solar panels and wind turbines. Wal-Mart, Kohl’s, Safeway and Macy’s are among the top 20 producers of clean energy on their premises, according to the Environmental Protection Agency.

Wal-Mart, the country’s largest retailer, is the most aggressive. In 2005, it set a target of using 100 percent renewable energy. To hold itself accountable, Wal-Mart now publishes a quarterly figure to chart progress. In the first quarter, it produced 4 percent of its own energy and bought an additional 18 percent of green power from the grid. (A spokesman explained that "sometimes our size and scale can work against us.”)

Still, the company says, hundreds of locations meet as much as 30 percent of their power needs with renewable energy. In California, the company aims to put solar panels on 75 percent of its stores by the end of 2013. It says the panels will provide 20 to 30 percent of each location’s electricity needs. In Texas, Wal-Mart buys wind energy to provide up to 15 percent of the total energy for more than 360 stores.

Contracting for clean energy "is sort of the win-win for retailers,” said Michael Bernier, senior manager in the national tax group at Ernst & Young, who helps companies find tax credits for renewable energy. "You get the benefit from going green, you turn electricity to a fixed cost from a variable cost, and in very attractive states you can often get immediate cost savings.”



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