Portland, Oregon, August 26, 2012
Supermarkets and Hypermarkets work on very low profit margins, as low as 3% of sales. Their business model, put simply, is to provide the retail customer the biggest choice and lowest market price all under one roof.
Over the last decade energy costs in retail have doubled and by 2013 the cost of energy for the ill prepared will be more than 2% of sales. The ultimate prize for energy cost saving in this industry is of course free energy generated onsite and from a sustainable and renewable green source. But so far it was either impossible or carried too higher CAPEX and to date no top brand Zero Net Energy Supermarket or Hypermarket exists.
The first few retailers who achieve sustainable Zero Net Energy at a reasonable CAPEX will reap their rewards; better still the retailers who leverage green energy development against black energy consumption whilst government incentives still exist could leverage an advantage more than 3 to 1, a distinct win over other retailers and for up to twenty years.
In a very competitive market “Zero Energy Bills” [and of course surplus income generated from Green energy grid sales], the potential of a big green image and far lower overheads for many years to come now dominates the attention of practically all retail heirachy.
The big box Supermarket and Hypermarket is clearly getting bigger but are they getting any greener?
The answer is yes; and many brands are developing a downstream green image with at least a partially greened up big box, typically installing geothermal, Solar PV roofs, concentrated solar power and even wind turbines as an offset to black energy from the grid. Many large store operators now know their chilled and frozen cabinet energy consumption in real time. Energy saving lights and heating devices are being installed as common practice. Even shopping habits are getting greener, the emphasis on “Fresh” and all manner of health driven green activity is going on upstream. It means far less frozen ready meals and frozen vegetables downstream and that translates into fewer refrigeration cabinets. Yet there are still no Zero Net Energy brands in the Supermarket and Hypermarket industry in 2012.
The first Zero Net Energy Supermarkets and Hypermarkets will begin to roll out in 2013. Slow economic growth both sides of the Atlantic means relatively fewer new stores are being developed and the weight of the market from 2013 going Zero Net Energy will be lead by the “Repostioned” box retail units and not new products. So here is the turning point, 2020 grows nearer and therefore the green up is necessity mid product life cycle, technology such as reliable new waste to energy devices came of age, FIT’s are being phased out [so grab them while you can] and the “knowledge base” of the renewable industry came on leaps and bounds. In essence the whole industry is being refitted Zero Net Energy over the next 5-7 years and in time for 2020.
A Hypermarket is a Supermarket and a Department Store in one. The Hypermarket is a one stop multi-shopping concept which was pioneered in the US in the 1930’s, first came a thrift store, drug store and gas station all in one. The first Hypermarket Mega Store was opened here in the US in 1962 by Meijer Inc. The next 40 years of evolution focused primarily on making them bigger not greener.
Not everyone is rushing to be the first Zero Net Energy Supermarket or Hypermarket but for sure no one wants to be last. So practically every retail chain already embarked on a green up campaign “with at least one toe in the water”. Few retailers are more than half way, not all of them realize they still only see “the visible part of the iceberg” but its the future market leaders who understand their science who are at the top of the hill and its they who are ready to swoop. The Zero Net Energy Supermarkets and Hypermarkets race starts in 2013.
Is it really possible to make Hypermarkets and Supermarkets Zero Net Energy and fossil fuel free?
Yes it is, but it takes commitment. SOLIDEA Group have a program called EVE® [Energy Value Engineering]. EVE® then has four stages to rolling out Zero Net Energy for a Supermarket or Hypermarket brand. At SOLIDEA we call EVE® a “cookie cutter” the experienced gained in a single store the “cookie” is knowledge gained and it is very lucrative when rolled out for the benefit of every store.
EVE® Stage one is due diligence and studies for the rectification of defects, it means getting the store shell and core along with its services in good order and everything working as it is designed to work. This is a proactive, combined studies phase identifying immediate, short term, mid term and full life cycle defects. Its during these studies “the getting to know the store personally phase” that a list of recommendations are drawn up to initiate the energy savings in each department and the write up begins, the road map for a final renewable energy mix.
EVE® Stage two is the big upgrade and realignment of the monitoring regime for all “Watergy” [Energy and Water and its consumption] the monitoring equipment will provide a central controller, a potential for real time, side by side analysis of the brands global energy consumption and online. Progress or disruption to the EVE® process is managed because it can be measured. The better the monitoring process inevitably the better the managed results.
At EVE® Stage three energy saving measures and devices are introduced, within most organizations a well informed workforce, and the setting of targets to meeting energy budgets has a significant impact. EVE® involves everyone in the workplace, building user surveys provides a brand energy awareness it instigates energy savings immediately we take care at SOLIDEA Group to ensure monitoring can be measured across individual work groups. Energy saving devices undergo EVE® full life cycle study they need to be recommended for use, then field tested in store one to avoid risk before being rolled out.
Finally EVE® Stage four and there is now a detailed road map with recommendations for the final renewable energy mix and the program for renewable Zero Net Energy installation is decided. Quality Cost and Time Studies are completed and the new installations can be installed to enhance what is already there or provide a total solution.
What is the target consumption of a Supermarket or Hypermarket after EVE®?
Energy is measured in kWh/m2/yr the measurement reflects historic and real time data. Energy is now based on audited data the days when operators relied on a design criteria meeting building standards and hoped for the best are long gone.
The ratings for Supermarkets differs with size. Large Supermarkets and Hypermarkets over 10,000m2 should consume less than 280kWh/m2/yr. The benchmark is a moving target and for a new store it is already South of 250kWh/m2/yr, but that can be hard work for those with a discerning or disproportionate chilled and frozen section.
Smaller units consume far more energy per m2 of floor area per year, often because a Supermarket brand carries most of its frozen food and all of its chilled food in all size stores this includes much smaller stores so an increase in kWh/m2/yr is normal. Supermarkets with net floor areas of between 5-10,000m2 should not consume more than 300kWh/m2/yr.
Before EVE® many older or less advanced retail box units are far less efficient, typically consuming more than 400kWh/m2/yr both in the US and Europe. There tends to be a rapid increase in energy consumption per m2/yr as stores get smaller [and usually closer to the City Center] between 3-5000m2 typically consuming more than 500kWh/m2/yr is not uncommon. As food retail units get smaller, older and invariably closer to town energy consumption becomes less consistent.
There are several reasons for the inconsistency and a much higher energy consumption per m2 per year in smaller box retail units, an example is the technical areas such as bakery, and the frozen and chilled cabinets which consume proportionally more energy in less space. Some smaller stores are far busier, and often they comprise much older equipment and less energy efficient installations. More often than not monitoring illustrates anomalies in out of date metering equipment and a failure to having these devices monitored is a significant risk of over paying for energy.
Busy town center Supermarkets of several hundred m2 operating 24 hours per day can consume more than 700kWh/m2/yr [before energy value engineering] and almost three times the consumption of their out of town big brothers; so it can be said at least regards energy consumption per floor space that Hypermarkets and larger Supermarket retail units demonstrate to be greener and more energy efficient.
Every Supermarket and Hypermarket can offset all its energy needs either on or off site. Since 2012 combined energy savings and lower cost would indicate that every Supermarket and Hypermarket aims to become Zero Net Energy soon.
EVE® is in great demand, cost energy savings for Supermarket and Hypermarket operators are not just about new designed stores EVE® has the capability to prevent financial heartbreak after compulsory energy audits are enforced in the next couple of years. EVE® has a positive future with Supermarkets and Hypermarkets, as well as obviating a lot of redundancy at the end of the decade EVE® is a save as you go value added service.
What are the big ticket energy departments in Supermarket and Hypermarket
The big ticket energy departments in Supermarket and Hypermarket food stores are refrigeration, then lighting, heating and cooling and supply air, the bakery and kitchens are big ticket consumers finally office and hot water. If you strip away at the Supermarket big box you can also get a picture of how other big box projects should consume
We have made an analysis of a theoretical Supermarket post EVE®. Our Supermarket consumes 350kWh/m2/yr. Its annual consumption is 350kWh x 10,000m2 = 3,500,000 [3.5MW] so the number of kWh every hour on average for the purpose of Zero Net Energy calculation is 3,500,000 ÷ 365 days ÷ 24 hrs = 400kWe
Energy consumed in a Supermarket is divided into heat and electrical energy as you will see from the data we have provided for our theoretical 10,000m2 Supermarket you will see it consumes around 340kWe in electrical power but only 60kWth in heat. At the next level this data is going to prove critical for our road map of choosing our renewable energy mix especially as we are most likely to look to choose “the lowest hanging fruit”.
So after EVE® what is the renewable energy mix for Hypermarkets and Supermarkets and the opportunity to become Zero or Net energy positive?
There are many established renewable energy technologies however most are actually incompatible with Supermarkets and Hypermarkets. It is difficult to find one size that fits all in practically any science and renewable energy offset is no different.
The ideal renewable energy combination is a partnership between small scale gasification and solar PV panels, it demonstrates to be a win win in every climate.
Planning any successful renewable energy mix relies on EVE®’s ability to un-bundle the energy requirements for example differentiating between electrical power and heat. With Supermarkets and Hypermarkets the energy requirement is approximately 6:1 in favor of electrical power so we are never going to get far having geothermal or concentrated solar power as the destination of our Zero Net Energy road map.
Both gasification and solar PV are low maintenance and low cost, gasification works all the time, ironically if the sun is not shining additional heat is required not electrical energy. The price of good quality PV panel installations is lower than at the beginning of 2012 though it will level out at around 1,5 Euro per watt to the end of 2012.
The PowerCan® 200 gasification unit on its own provides most of the heat and power needed for our theoretical 10,000m2 Supermarket, it conveniently makes 4 tons of retail MSW extinct every day [which is the typical MSW production of a 10,000m2 Supermarket anchored shopping center]. With savings on collection and landfill fees of lets say 60-100 Euros per ton PowerCan® 200 makes a bonus of at least 240 Euros per day or 87,600 Euro per year.
The PowerCan® 200 unit lives in its own 20ft container, during the gasification process it makes waste extinct in a vacuum, this is a very safe process, there are no emissions from gasification no smoke stack and no exhaust.
Once converted the Syngas PowerCan® 200 produced drives a converted diesel CHP [Combined Heat and Power] Generation Set. Syngas is very pure the typical emissions through the exhaust from retail MSW are much lower than LPG, Propane and most other types of natural gas. At a cost of under 385,000 Euro for an installed unit the PowerCan® 200 is a big bang for the buck with the ability to multi task and take out another problem every day, its a great start for our theoretical Zero Net Energy Supermarket. The good news is its demonstrating a payback period of less than one year in most cases.
How much does it cost to take a Supermarket or Hypermarket Zero Net Energy?
With gasification making our MSW extinct and a parking roof for over 300 cars we managed our 10,000m2 Zero Net Energy Supermarket at under 1.8m Euro we included EVE® our PowerCan® 200 and our Solar Panels in these costs. At the end of EVE® we consumed 350kWh/m2/yr or 3,500,000 kW our total installations then cost us the equivalent 0.51c Euro if we paid it all back in one year.
For our theoretical 10,000m2 Supermarket we have opted for the PowerCan® 200 and with 200kWh of electricity 260kWth of heat. We did do a little EVE® and found the 40kWe of electrical energy in the spare heat we generate in the PowerCan® 200. With this value engineering in hand we reduced our dependency on solar we saved space and cut a lot of cost. We summarized the renewable energy mix in table 1
Central Europe has approximately 2.4 hours of usable sunshine energy to be converted to solar electrical energy per day, as there are 24 hrs in a day it is 10% efficient and we can quickly use this formula to calculate the peak power of the additional panels we require for our roof. We still need 25% of our electrical energy from solar its the equivalent of 100kWe, using our formula we see we need 1000kWp or 10 x 100kWe [1MWp] of solar panels.
Our Supermarket roof has either 5,000m2 or 10,000m2 in area it means we will have to look in the car park to find the additional 5,000 to 10,000m2 to meet our needs. In Europe the average car parking space consumes 31m2 so we are looking for 161 to 323 car parking spaces to fulfill our requirements. By making a PV car park roof we often need no planning consent but we are adding a lot of value shading cars in summer and keeping the rain and snow out in winter.
The area to be consumed for solar panels is roughly the same on a roof as it is in a field or in a car park. The total area for 1MW of field installation is approximately 1,55ha or 15,500m2.
The cost of our theoretical 10,000m2 Supermarket Zero Net Energy is summarized in table 2
How is Zero Net Energy a Big Ticket Item in the Retail Industry of the future?
Downstream, retailers pass discounts on to the buyer to become successful, Supermarket and Hypermarket retail operators work on very small margins and of just a few percent. Having no energy bills in future would mean the operators margin today could be increased 30-60% and on the higher turnover and popularity of being the “Greenest” is plenty enough motivation
In some European countries box retail Supermarkets and Hypermarkets consume in excess of 5% of the national grid, there is every motivation at the macro level to develop Zero Net Energy in retail, many governments in Europe and Asia sponsor power purchase agreements schemes for retail where grid tied renewable energy is paid a guaranteed premium or feed in tariff of up to 5 times the regular black energy rates.
The race for Zero Net Energy is carried upstream in retail, retailers are holistic and relentless in their approach to energy costs. Supermarkets and Hypermarkets develop their purchasing power up stream and many are actively promoting renewable energy policy in their suppliers. SOLIDEA Group have already developed many solutions for Broilers, Cow Dung, Agricultural Waste, Crumb Rubber and MSW.
SOLIDEA Group are active in developing the future with retail organizations, Supermarkets and Hypermarkets who will one day sell Syndeisel to their customers made from MSW and non food biomass. The fuel is manufactured from PowerCan® 200 gasification using a long established FT process. Syndeisel is lower cost and has far lower emissions when used in regular diesel engines, it also creates employment and a livelihood for many rather than profits for a few.
SOLIDEA Group are helping others in the industry to better develop their dreams including “Renewable Fish” algae fed salt water fish bred inland. Renewable Fish is not just a renewable energy scheme its a conservation and renewable project in one, Renewable Fish is taking nothing from the sea, but returning over 60 tons of young fish per season per tank and producing valuable CO2 consuming algae. Its not a pipe dream either they are building 5th, 6th and 7th inland in Asia as we write.