(ADPnews) – Oct 1, 2010 – The world’s major retailers are vigorously latching onto renewables, hoping consumers’ growing awareness of the environmental threat will help them bolster reputation while also slashing energy bills.
By Julia Komitova
In September alone, a string of top-notch retail companies uncorked renewable energy projects, including the likes of US discounter Walmart Stores Inc (NYSE:WMT), Swedish furniture chain IKEA, US healthcare products maker Johnson & Johnson (NYSE:JNJ) and multinational consumer goods provider Procter & Gamble (NYSE:PG). These are only the latest manifestations of an accelerating trend in the global retail industry to embrace renewable energy.
“[This trend] is a reflection of the growing popular support for renewable energy, and the companies’ estimation that investing in renewables will have a positive impact on their green and socially responsible image, showing their commitment to be part of the solution rather than the problem,” Angelika Pullen, communications director of the Global Wind Energy Council (GWEC), told ADPnews.
Her view was echoed by the Solar Energy Industry Association (SEIA), which highlighted retailers’ urge to lower their energy bills and manage long-term costs.
“These projects reflect a growing trend among US retail property owners to cut their energy bills and manage long-term costs by installing solar energy systems,” SEIA spokesperson Monique Hanis told ADPnews.
“The price of solar has come down dramatically, about 30% in the last year alone, financing options have increased. As concerns about the environment grow, companies are implementing sustainable business practices, and solar is significant part of the solution,” she added.
She pointed to the wide public support for solar energy in the US as another drive for its take-off in the retail sector. A recent independent Kelton Research poll revealed that 92 percent of Americans believe it is important for the US to develop and use more solar power.
WALMART OFF THE BEATEN TRACK
On September 20, the US discount retailer moved a big stride forward to its goal of being supplied by 100% renewable energy as it announced plans to install solar generating systems at another 20 to 30 sites in California and Arizona. The bulk of the projects will use thin-film solar technology, which is lighter and cheaper. When complete, the systems are expected to bang out up to 22.5 million kWh of energy annually and supply up to 20-30% of the total energy needs for each location.
“Walmart pioneered the retail sector’s involvement in renewable energy projects a while ago, and other companies are now following suit,” Pullen commented.
The retailer first dabbled in clean energy back in 2005 when it launched a wide-ranging sustainability initiative and set a target to be supplied 100% by renewable energy.
The next milestone in the company’s efforts to go green came in 2007 with a new partnership with US-based nonprofit environmental advocacy group Environmental Defense Fund (EDF). The aim was to advance the development of emerging photovoltaic (PV) technologies -- collectively known as thin-film solar -- into commercially viable, consistent, and cost-effective sources of renewable energy. Then in late 2008, the partners progressed from a joint request for proposals (RFP) to the selection of contractors.
“When Walmart completes new solar installations on all 30 new sites, they (at last count) have some 8,350 facilities to go. In truth, we’re still waiting for a truly Walmart-sized effort toward achieving the renewable energy goal,” Michelle Mauthe Harvey, co-leader of EDF’s on-site partnership with Walmart in Bentonville, Arkansas, said commenting on the new projects.
Walmart vice president of energy Kim Saylors Laster said that deployment of renewable energy technologies helps the company reduce energy price risk and lower costs, while promoting markets for new technologies.
And it is not just solar on its radar. For example, in the US, Walmart buys wind energy in Texas, and is testing fuel cells and small wind turbines. In Mexico, it is purchasing energy from a local wind farm for 348 facilities and has installed solar panels on two facilities. In Canada, Walmart is testing geothermal, fuel cells, solar and wind, and is the largest corporate purchaser of low-emission power through a local provider of clean, renewable energy.
IKEA GOES RENEWABLE
The Swedish home furnishing retailer is aiming equally high, having set a goal of running all of its buildings on 100% renewable energy, while boosting overall energy efficiency by 25% from the level in the fiscal 2005.
The latest indication of the company’s true commitment to these goals came in early September, when it purchased six wind farms with a combined nameplate capacity of 45.05 MW in Germany from Spanish wind energy company Gamesa (MCE:GAM).
“Together with four wind farms in France and six in Germany IKEA has in total 52 wind turbines with a total installed power of 93 MW,” IKEA Germany expansion manager Armin Michaely told ADPnews. He added that further investments in wind farms or solar panels are being considered, but did not elaborate.
The retailer is implementing a project dubbed ‘IKEA Goes Renewable’, which underpins its plans of curbing the carbon footprint of its buildings. But wind is just one of the clean energy technologies IKEA is betting on to attain this goal. Solar, geothermal and biomass are all part of the mix.
For example, at some of its stores in Sweden, Norway and Denmark, IKEA grinds up food leftovers in a mill and stores them in a special tank. The food waste finds its way to a special treatment centre where it gets reused, as biogas to run buses on.
In its 2009 Sustainability Report, the chain outlines plans for hefty investments in solar panels in stores and distribution centres in eight countries over the next few years including Spain, Portugal, Italy, France, Czech, Slovakia, Germany and Belgium. The systems will cater for some 10% of the electricity needs of the stores, and up to 25% for distribution centres, which consume less power. Some 30-40 IKEA buildings are scheduled to be equipped with solar-generating systems by the end of fiscal year 2011.
IKEA taps renewable energy to meet its heating and cooling needs as well. It uses ground source heat pumps, air heat pumps, biomass boilers and solar panels. Most of IKEA’s new construction projects incorporate one or more renewable sources of heating. For example, all new stores in Sweden are being fitted with geothermal heating and cooling systems. IKEA Norway’s Slependen store gets 80% of all its heating and cooling energy from its own geothermal installation.
Green transportation is also high on IKEA’S mind. Together with Swedish privately-held Preem Petroleum, compatriot fashion retailer H&M (STO:HM B) and Volvo Logistics, IKEA has participated in a project to support transport service providers make the switch from fossil fuels to alternative fuels. The collaboration has resulted in a number of Preem fuelling stations opened in Sweden during the summer of 2009. During the summer months, these stations provide alternative fuel, Bio30, which contains a 30% blend-in of rapeseed oil.
It seems all these efforts are paying off and the retailer is moving steadily to reaching its 100% renewable energy target.
"Last year 49% of the energy consumption for IKEA buildings across the world came from renewable energy sources. In the past 5 years we have also decreased overall energy consumption by 9%,” IKEA UK & Ireland social and environmental Manager, Charlie Browne, told ADPnews.
"In the UK we have reduced our energy consumption by 25% with a target to further reduce it by 10% in the coming financial year," he said.
"We have achieved this through good housekeeping actions such as really fine-tuning building management systems and in-depth energy audits and reporting."
"Significant investments have also been made in biomass wood burners in our stores. These provide heating fuelled by purchased wood chip or chipped wood from our own operations such as damaged pallets and wood products and ground source heat systems.”
CLEAN SKIN, CLEAN PLANET
On September 23, US healthcare products maker Johnson & Johnson (NYSE:JNJ) flicked the switch of a 4.1 MW solar PV system at a production site in New Jersey. Just days later Procter & Gamble unwrapped plans to join the growing club of retailers aiming to go 100% renewable.
Johnson & Johnson began setting environmental goals back in 1987 and in 1999 set up a target to slash carbon dioxide (CO2) emissions from facilities worldwide by 7% in absolute terms by 2010. By improving energy efficiency, establishing on-site cogeneration and renewable energy projects, using green power and purchasing carbon offsets, the company believes it is on target to meet that goal.
One key contributor to its efforts is the 2.1 MW biomass boiler that feeds on wood chips to fuel operations at Centocor Biologics in Ireland, also known as “BioCork”. This was the company’s flagship such facility and the first by a pharmaceutical company in Ireland.
Johnson & Johnson hypes the newly-launched solar system in New Jersey, the largest in the state, as its 2010 renewable energy milestone. It comprises 13,496 ground-mounted panels that could cover 70% of the site's annual electricity needs.
The latest feather in its cap underscores the green image of the company, which is the sixth-largest purchaser of renewable energy in the US, according to the US Environmental Protection Agency (EPA) Green Power Partnership.
In addition to the Titusville site, Johnson & Johnson has solar power systems planned or completed at 20 sites worldwide, which together represent an installed capacity of about 13 MW.
The most recent candidate for the 100%-renewable gang of retailers, Procter & Gamble, has come up with a 'sustainability vision', which sets a series of 10-year goals. These involve using 100% renewable or recycled materials for all products and packages and sending zero consumer or manufacturing waste to landfills, among others.
The first set of 10-year goals, to be achieved by 2020, includes replacing 25% of petroleum-derived raw materials with sustainably sourced, renewable materials; cutting out packaging by 20% per consumer use; powering company operations with 30% renewable energy; and reducing waste from manufacturing to less than 0.5%.
The company already has solar panels up and running at manufacturing sites in California and Italy, and has almost completely got rid of PVC from packaging.
No doubt green is in for the global retail industry. Mounting environmental concerns and the need to cut costs are likely to push more companies to jump on the bandwagon. But it will be consumers that will reap the big benefits, paying less for greener products and doing good to our planet.