Morrisons enjoys major energy-saving success

NG Bailey
Risk-free approach to energy savings — Chris Coath.

A significant and early success with an energy-saving initiative by supermarket chain Morrisons is leading to it being applied to all its stores little more than a year later. Chris Coath of NG Bailey has the inside story.

In the short time it takes to read this article, an innovative approach to energy efficiency is clocking up minute-by-minute savings for one of the UK’s leading retailers. This is thanks to a partnership in sustainability which is designed to grow these savings quickly and effectively into millions of pounds each year.

This collaboration is spearheaded by NG Bailey (a leading independent UK provider of engineering, IT and facilities services), Elutions Inc. as one of the world’s leading smart asset and smart buildings company, and Morrisons, a long-standing client of NG Bailey.

It is already delivering a saving of more than 16% on the supermarket group’s annual gas and electricity bill.

The magnitude of the savings revolves around the introduction of a complete outsourced energy-management solution called Rare Energy, developed and delivered by NG Bailey and powered by its Elutions.

Put simply, it takes a client’s existing assets and ensures they are operated in real-time at their optimum level of energy efficiency.

Its approach to combatting spiralling energy costs is designed to drive down usage over and above any other measures already in place (such as the installation of energy-efficient lighting and changing utility providers or contracts), at no financial risk to the client.

If the promised savings are not delivered, the client get its money back.

It was this risk-free approach that appealed to Morrisons as it signed the first phase of a 5-year partnership deal with NG Bailey and Elutions in autumn 2013 and the second phase earlier this year.

Rare Energy is underpinned by a true partnership in every sense. The total value of the savings that are generated is shared between the suppliers and customer, so the initial client investment is made in the secure knowledge that it will quickly pay for itself and then generate significant cost savings year-on-year which reduce overheads and add to the bottom line.

Such has been the speed and size of the savings generated during the first phase, across 105 of the supermarket’s 500-store estate, that the planned roll-out of phase two is now being accelerated across its remaining portfolio of 395 UK stores for completion by the end of November 2014.

The company had already made significant progress in reducing its energy output, yet it was determined to do more and push the boundaries of energy-efficient innovation in the retail sector. That is when it decided to adopt the Rare Energy solution to add an extra dimension to its efforts to reduce its carbon footprint.

Rare Energy is equipped with the ability to capture key data at the touch of a button, such as real-time smart-meter readings, asset control setpoints and energy tariff information.

Having the ‘big picture’ to draw upon, the data is then analysed to create the platform for identifying opportunities for the greatest cost savings.

NG Bailey
Just a few months into an energy-saving partnership, Morrisons was a saving more than 16% on the group’s annual gas and electricity bill.

Recommendations are made to the client and then the specialist Rare Energy solution gets to work on a wide-ranging programme of activity to turn those savings — invisible to staff and customers — from paper into practice.

This is achieved through a comprehensive process of asset optimisation, asset replacement, behavioural change and utilities optimisation as well as continuous and accurate management of energy consumption around the clock.

Morrisons can access a shared online dashboard where energy use can be viewed, monitored and controlled across the entire group. It measures energy usage granularly, by device or asset (from air-handling units to lighting systems to individual refrigerators), location, cost centre or department, or time of day.

Rare Energy has already secured this endorsement from Stuart Kirk, head of energy for Morrisons: ‘In support of our carbon-reduction target of reducing our absolute carbon emissions by 30% by 2020, we are launching a number of approaches to energy efficiency.

‘Applying the Rare Energy framework gives us the opportunity to dig deeper into the performance of our stores, and the results so far speak for themselves.

‘The system allows us to apply a step-by-step process to understanding the assets and processes that drive energy demand and operational cost, and to apply appropriate fixes without impacting our customers’ experience.

‘In addition to managing down a significant cost to our business, the system allows us to fully understand and control our use of energy.

Rare Energy will support our fit-for-the future programme in considering UK-wide initiatives to balance demand with potential intermittent generation.’

In retail businesses, energy costs may only be a small percentage of turnover, but driving them down in this way can directly increase margins without the need to increase sales.

Indeed, according to new research by the Carbon Trust, a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales.

While still in its relative infancy, this initiative has already demonstrated how saving energy is one of the simplest ways to increase profits.

Chris Coath is energy-solutions manager with NG Bailey.

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