2017 RETAIL ENERGY MANAGEMENT LEADERSHIP MODEL
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1 2017 RETAIL ENERGY MANAGEMENT LEADERSHIP MODEL About RILA s Retail Energy Management Leadership Model RILA s Retail Energy Management Leadership Model is a roadmap to help retail energy managers optimize their energy programs. Program Sponsors: Strategy & Commitment The Model is divided into six sections, as illustrated by the diagram to the right. It is intended to identify possible pathways to strong energy management programs in retail. The leading practices are currently only performed by a few companies at most, and not every company can/will achieve every leading practice. How to Use the Model Visibility The Model is a tool that can be used for individual company and industrywide purposes. Retail companies can use the Model to: n n n Baseline the maturity of their programs (contact Erin.Hiatt@RILA.org to receive a custom benchmarking report) Identify the dimensions offer the highest leverage opportunities for improvement Projects & data Energy Consuming Systems Resource investment People & tools Refer to RILA s Retail Energy Management Resource Library for corresponding tools, case studies, and further opportunities for each dimension = Program dimensions that were identified as floodgate opportunities, where industry progress will also enable advancement in all other dimensions, have been noted. These are also the Program s 3-year focus areas. Process to Develop the Model The Retail Energy Management Leadership Model was originally developed in 2014 with retailer input as well as review of existing tools like ISO and EPA s ENERGY STAR Guidelines for Energy Management. The Model undergoes annual reviews by retailers, the U.S. Department of Energy (DOE) and U.S. Environmental Protection Agency (EPA) staff and contractors, and other energy experts. The Model is organized according to the Virtuous Cycle of Strategic Energy Management, a resource pioneered by MIT and Environmental Defense Fund. In an optimized organization, all components of the virtuous cycle function at full capacity to improve the performance of the energy consuming systems, generating maximum financial and environmental returns. Visit to learn more about RILA s Retail Energy Management Program. Other related Models include the RILA Retail Sustainability Management Maturity Model and the ELEVATE Responsible Sourcing Management Model. 1
2 COMPANY S ENERGY MANAGEMENT MATURITY Note: These dimensions are solely intended to be possible pathways to energy optimization; the leading practice is currently only performed by a few companies at most; and not every company can/will achieve every leading practice. Dimensions Initiating Progressing Excelling Leading Transforming STRATEGY & COMMITMENT 1 Reduction Strategy & Goals Ad hoc efforts, no formal program No internal goals or annual internal goals based only on cost reduction Defined energy management roadmap with internal energy or greenhouse gas (GHG) reduction goals Benchmarking activities with peers through RILA, EEI, PRSM, DOE and/or another program Using standard metrics for measuring energy performance Public energy efficiency or GHG goal Reporting to third-parties such as Carbon Disclosure Project (CDP) and pursuing recognition opportunities Setting a goal to improve ENERGY STAR or other third party sustainability measurement score across full portfolio Public renewable energy or GHG goal addressing Scope(s) of emissions (I, II, III) Using a balanced scorecard (people, planet, and profit) system for reviewing energy strategies and projects Integrating supply chain/value chain into energy/ghg reduction strategy Collaborating with industry peers to establish sector goals and initiatives Setting or set science-based Scope I, II, and III GHG reduction goals Net zero store operations goal Goal to be supplied by 100% renewable energy by 2050 Online public dashboard updated regularly with goal progress and challenges 2 Corporate Office Employee & Vendor Engagement Ad hoc engagement of corporate office employees and vendors Training (one-time or limited) relevant corporate office employees and vendors with energy reduction opportunities within their own roles Soliciting office energy reduction suggestions from corporate office employees Providing support for personal employee energy savings efforts (i.e., biking/public transit incentives, etc.) Hosting events for corporate office employees to learn about energy reduction in their retail roles and in their home Following internal communications plan to periodically update and engage corporate office employees and vendors Encouraging vendors to improve energy performance of their operations Hosting annual Energy Summit with all vendors that impact energy consumption Integrating energy management training into onboarding and continuing education for all corporate office employees and vendors Collecting vendor energy performance data through internal questionnaires or a third party (e.g., CDP Supply Chain) Holding corporate office crossdepartmental energy reduction competitions Testing and actively partnering with research groups or vendors to design next generation equipment Energy performance evaluation included in vendor selection 3 Executive Engagement No stated corporate commitment to energy management from senior executives Sharing energy success stories with executive team on an ad hoc basis EPA ENERGY STAR Partner Sharing energy success stories with executive team on a quarterly basis Executives reiterate corporate energy reduction goals directly to stakeholders Contributing to public case studies Regular access to and visibility of executives on energy management efforts Executives refer to energy successes in some external communications DOE Better Buildings Challenge partner Energy performance shared by executives in quarterly leadership updates to company Some C-suite and board level incentives tied to environmental goals 2
3 RESOURCE INVESTMENT 4 Energy Team Either no designated energy team or one person or small team responsible for energy management No explicit internal instructions to coordinate and fund energy investments across the organization beyond procurement Energy manager (or team) with specific function to advance energy projects Hiring external consultants or service providers to help implement energy projects or expansion of internal energy team to implement additional energy projects Multi-person energy team with division of responsibilities Accessing energy training and other educational resources to boost team s capabilities Documenting process to identify, design, select, and execute energy use reduction projects into existing stores Periodic cross-functional team meetings to identify and execute on energy management strategy implement energy projects Internal champions in key departments like sustainability, facilities, construction, etc. Building design and operation is approached as a system Working with universities, nonprofits, government laboratories, etc. to supplement energy management resources with additional expertise and research 5 Engaging Utilities No engagement beyond setting up utilities for facilities Participating in utility-related events like EEI s National Accounts meetings Using some utility energy efficiency incentives Identifying optimal rate schedules and procurement agreements Developing strong relationships with utility account representatives who share new or custom offerings Proactively maximizing appropriate energy efficiency incentives by regularly reviewing programs Full-time staff person or external consultant tracking incentive programs Developing working relationships with Public Utility Commissions (PUCs) and occasionally testifying on key issues Implementing an energy procurement strategy that capitalizes on marketspecific timing and opportunity and renewables Member of Corporate Renewable Energy Buyers Principles Partnering with utilities to develop retail-specific energy efficiency and renewables incentive programs or procurement offerings Regularly testify to PUCs on key efficiency and renewables issues 6 Leased Store Management (primarily applicable to retailers in malls) No internal (i.e., real estate, construction, legal) or landlord engagement on energy reduction programs Educating internal stakeholders about the impact of leased store challenges on operational expenses Using stores with submetering and consumption-based billing to extrapolate benchmarks and prove need for energy transparency and lease language revisions Member of RILA-ICSC Landlord-Tenant Energy Partnership Developing and piloting revised lease language, Letters of Intent, premises questionnaires and other leasing documents to overcome energy management challenges Working with construction to increase minimum efficiency of standard buildout spec design Coordinating and collaborating with landlords to deliver high efficiency box shell options in new stores to maximize efficiency of tenant fit-out Using lease adjustments to correct for split-incentives and/or installing submeters in all new stores Periodically discussing energy opportunities (i.e., lighting, HVAC, solar, electric vehicles, etc.) with key landlords for all leases Working with landlords to obtain common area energy data Recognized by Green Lease Leaders or another program Incorporating energy reduction measures and submeter installation in all new and existing lease agreements Highly efficient standard build-out spec design 3
4 PEOPLE AND TOOLS 7 Energy Management Information System (EMIS) Basic alert, control, and analytic capabilities Measuring and tracking energy on a store-by-store basis at the utility billing level EMIS included in new stores Developing plans to deploy EMIS in stores, corporate offices, data centers, and DCs Periodically reviewing some control setpoints, lighting control timers, etc. Basic measures are available but not real-time measures Implementing EMIS at all facilities EMIS includes controls, remote monitoring and tracking for realtime usage, advanced alerts, analytic capabilities, and demand response Incorporating a decision tool to identify opportunities for energy reduction across full portfolio ISO certified Implementing a proactive maintenance program based on EMIS data to reduce energy waste Automated Demand Response 2.0 capable Recipient of a DOE Smart Energy Analytics Campaign or other third party award Vertical integration of data from EMIS at operational level to enterprise reporting, benchmarking, and analytics 8 Measuring, Tracking, & Benchmarking No systematic measurement, tracking, or benchmarking program in place Using utility bill pay system and/or EPA s ENERGY STAR Portfolio Manager to benchmark energy performance and identify anomalies Using energy data to identify and analyze best and worst performing stores Benchmarking project outcomes with peers through RILA, EEI, DOE or another program Measuring and tracking Scope I & II GHG emissions Tracking all possible properties in EPA s ENERGY STAR Portfolio Manager or equivalent software platform and automatically uploading data via web services Tracking co-benefits to improved energy performance (like brand value, environmental performance, employee morale) Measuring and tracking Scope III GHG emissions, including vendor emissions Using enterprise software to perform automated benchmarking, bill/rate analysis, measurement & verification (M&V), and advanced analytics Employing energy modeling Using EMIS and submetering to measure, track, and benchmark asset-level energy performance Working with ENERGY STAR to improve platform and recruit/mentor other members Integrating sales data, comp sales, foot traffic, etc. with energy data 9 Aligning Incentives for Energy Performance Energy costs not considered in relevant business decisions Identifying alignment with internal partners to consider lifecycle costs including facilities, maintenance, real estate, store operations, construction, etc. Awards/recognition for biggest contributions to energy conservation Store incentives and P&L statements tied to store energy use (as a controllable expense) Some departments can recuperate some of the cost savings from energy projects Some employee incentives tied to energy performance Departments can capture the majority of cost savings and reinvest in new projects or dedicated long-term funding District/regional managers and department heads bonuses recognize energy performance Corporate bonuses recognize energy performance and/or peer rankings Evaluation of projects considers total cost of ownership as well as non-financial benefits of project implementation 10 Frontline Employee Engagement No engagement, or education through basic environmental-awareness signage in stores Creating guide for store teams ranking behavioral changes by respective opportunity for increased store profitability Developing store green team(s) or energy advocates to monitor on-site performance, reduction opportunities, and provide feedback to corporate energy management team Including store managers and associates in energy audits Posting store energy consumption for all store associates to compare their store to other similar stores Leveraging online platform for employees to review store consumption and submit ideas to reduce use Providing support for personal employee energy savings efforts (i.e., biking/ public transit incentives, etc.) Energy awareness campaign throughout stores, including signage, orientations, periodic trainings, competitions, in-store green teams, store meetings, scorecards, newsletters, etc. Providing collaborative best practices platform for high-initiative employees to receive recognition while sharing best practices with colleagues Training employees to educate customers about company s energy/ sustainability efforts 4
5 PROJECTS & DATA 11 Financial Management Limited interaction with finance team (e.g., only for project approval) Simple ROI used to evaluate potential projects Energy projects held to stricter payback requirements than other projects Allow use of utility and government rebates and incentives for capital improvement projects Considering energy reduction projects as part of annual capital planning Communicating energy reduction in terms of the bottom line Project proposals that meet minimum internal finance requirements are likely to be funded Measurement & verification (M&V) designed to track all financial benefits and strengthen future business cases Considering ROI, internal rate of return, hurdle rate, net present value, and energy price growth expectations in energy strategy and projects Strong working relationship with finance team; present energy efficiency projects as investments Maintain list of shovel-ready projects if excess capital becomes available Formally integrating finance team into energy management decisions Finance team often allocates excess capital to energy projects Special fund to periodically test new energy reduction strategies/ technologies Developing a process with the finance team to quickly scale technologies once proven in successful in pilots Evaluating alternative internal and external financing models (beyond rebates and incentives) Deploying innovative internal and/or external financing models Using environmental key performance indicators (KPIs) like GHG emissions Projects that exceed the internal ROI are funded through incremental debt financing 12 Systems Procurement Operational costs/energy costs not considered in procurement decisions Some consideration of total cost of ownership in procurement decisions and negotiations Teams that procure energy- consuming equipment consider total cost of ownership in purchase decisions Procuring ENERGY STAR Certified for all qualified products Considering energy costs as an integral component of vendor and initiative valuation Procurement business rules require net reduction in GHG emissions 13 Building Auditing, Re-tuning, & Retrocommissioning No comprehensive building re-tuning strategy in place; only re-tuning buildings as issues arise Walk-through energy audits on ad hoc basis Include utility-performed energy audits as part of routine business reviews with national account reps. Strategy in place to periodically audit and re-tune stores, corporate offices, data centers, and DCs to identify and act on reduction opportunities Implementing portfolio-wide re-tuning and replacement strategy Performing regular retrocommissioning on buildings and using results to judge and motivate GC/ developer/ builder performance Re-tuning building systems on a regular schedule Working with landlords to ensure common areas are periodically re-tuned 5
6 VISIBILITY 14 Reporting & Communicating Internal reporting only to relevant stakeholders Private CSR or Sustainability Report Energy efforts in public CSR or Sustainability Report or on public website Ad hoc reporting to field and corporate staff on energy strategies and successes Sharing leading practices and success stories with other organizations at sustainability or energy conferences Promoting third party recognitions (e.g., DOE or EPA awards, Platt Global Energy Awards, inclusion in Dow Jones Sustainability Index, etc.) Reporting externally to CDP or other formal channels Framing success stories in terms of profits generated, costs saved, risks reduced, and/or competitive advantages created Generating energy scorecards to compare buildings Creating and using an executive energy dashboard Acting on benchmarking data to target energy performance improvements where most needed Commissioning third-party verification of energy savings/ghg reduction Publishing a company newsletter, blog, and/or social media dedicated exclusively to energy Comprehensive energy communications strategy Developing annual integrated financial and sustainability reports Using SASB standards when preparing annual 10-K filings 15 Consumertargeted Education No consumer-facing energy messaging Messaging on website and Sustainability or CSR Report Basic in-store signage about company s energy management efforts Social media used to occasionally share energy success stories and tips Ad hoc product marketing or promotional campaigns to communicate corporate energy efforts In-store signage and other channels to promote company s efforts (in-store intercom announcements, circulars, website, etc.) Regular alignment of corporate energy efforts with product marketing or promotions Stores associates are educated on energy/environmental strategy and communicating message to customers Messaging to help consumers reduce their home energy usage Promoting/providing alternative transportation to stores 16 Collaborative Involvement No involvement in collaborations Joining results-oriented groups like RILA s Retail Energy Management Program or DOE s Better Building Alliance Actively sharing practices, developing case studies, supporting peer companies Partnering with NGO(s) to identify improvement opportunities Identifying opportunities to develop new collaborations with government, NGOs, peers, etc. 6
7 ENERGY CONSUMING SYSTEMS 17 Lighting Periodically review lighting options Using T8 fluorescents or similar efficiency equipment for interior lighting Using LEDs in new construction for all exterior and sign lighting Occupancy sensors where appropriate in new construction Testing in-store high performance lighting and developing rollout plans Implementing centralized control and monitoring Implementing portfolio-wide high performance lighting rollout where appropriate Merchandising and energy team coordination in lighting design Retrofitting site and sign lighting with LEDs Retrofitting with occupancy sensors Eligible for EPAct tax deductions due to level of light power density Implementing high-performance lighting throughout stores, corporate offices, data centers, DCs, and parking lots Daylight harvesting strategy in place Building and space designs are optimized to reduce lighting use and follow Illuminating Engineering Society (IES) recommended practices Recipient of a DOE Interior Lighting Campaign, USGBC LEEP Campaign, or other third party award Piloting next generation systems that integrate lighting with other energy consuming systems Working with vendors of other instore energy-consuming devices (e.g., vending machines) to reduce lighting load of their systems 18 Heating, Ventilation, & Air Conditioning (HVAC) Periodically review higher efficiency HVAC options Testing new higher-efficiency HVAC units, O&M practices, and Variable Frequency Drive (VFD) retrofits Implementing a quality maintenance program following ASHRAE/ACCA Standard 180 Developing roll-out strategy for highest efficiency replacement and retrofit options Rightsizing of HVAC tonnage based on heat loss/heat gain calculations Economizers, CO2 sensors, and RH sensors to inform runtimes and set points Performing duct sealing projects to minimize air leakages and accompanying energy waste. Highest efficiency HVAC installed throughout corporate offices, stores, data centers, and DCs Implementing an active HVAC asset performance tracking program and efficient operational practices Periodically reviewing newest technologies Recipient of a DOE Advanced Rooftopunit Campaign (ARC) campaign or other third party award Working with vendors to define next generation specifications for integrated HVAC, lighting, and control systems 19 Plug Loads Inventorying the in-store devices that consume plug energy (e.g., vending machines, store displays) Installing basic monitoring and controlling devices for plug-in devices (e.g., vending misers) Submetering device energy usage across stores to benchmark devices and identify alerts Performing research and pilots with DOE s Plug & Process Loads Technology Solutions Team Installing energy-saving devices from vendors Using a mobile application to remotely and/or automatically turn on/off plug loads Working with device vendors to develop technologies that consume minimal energy necessary for functionality, or to completely eliminate the need for energy 7
8 ENERGY CONSUMING SYSTEMS (continued) 20 Energy Storage, Generation, & Demand Response No energy storage, generation, or demand response programs in place Purchasing Renewable Energy Credits (RECs) to offset a portion of electricity purchases Installing a few onsite solar installations using Power Purchase Agreements (PPAs) Implementing a demand response program Researching energy storage Testing a variety of onsite renewable energy technologies across facility types Developing a renewables strategy, including a financial plan and prioritization of opportunities by state/ region, participation in community solar, remote net metering, and virtual net metering REC procurement policy Demand response participation in most viable markets Energy storage installed in some viable markets Implementing strategic utility, onsite, and offsite procurement strategy Testing new fuel cells, geothermal, battery storage, phase change materials, or other storage and generation technologies Maximizing use of demand response Developing renewable energy purchasing cooperatives with landlords and other retailers Making large offsite renewable energy purchases Working with utilities to develop green power offerings Meeting or exceeding 100% of energy supplied by renewables Procurement subject to additionality requirement 21 Refrigeration Aware of refrigerant types in portfolio & associated energy factors Purchasing only base model efficiency refrigeration Doors are used on 80% of all low temp cases Choosing some refrigerant types in portfolio based on associated energy factors ENERGY STAR procurement policy for all qualified products Routinely cleaning compressors and other components that can impact efficiency Doors are used on 100% of low temp cases Using doors on 50% or more of mediumtemperature refrigerated display cases (excluding fresh bulk produce) All compressors are remotely located outside the store to avoid waste heat issues (or waste heat is vented/piped outside) Controlling anti-sweat heaters in new cases Using doors on 80% or more of mediumtemperature refrigerated display cases (excluding fresh bulk produce) Anti-sweat control in all cases Utilizing demand control kitchen ventilation (DCKV) Piloting stores using natural refrigerants or alternative approaches to dramatically lower the climate impacts associated with direct emissions of refrigerants 22 Food Service Some attention paid to operational procedures, like ensuring walk-in doors don t remain open Establishing guidelines for efficient operational procedures Installing high-efficiency (e.g., ENERGY STAR) equipment in some stores Installing high-efficiency (e.g., ENERGY STAR) equipment in all new stores Planning for continual improvement through retrofits or replacements Build-out specs require nearly all equipment to be of highest-available efficiency Benchmarking energy metrics are extended to deli/food service areas and energy efficiency measures are identified, approved, and adopted Testing next generation food service efficiency technologies with vendors Actively using energy information from benchmarking or EMIS to analyze continuous opportunities to reduce energy 23 Architectural & Shell Program Have a standard build-out document with energy specs Meets local, state, and federal codes Build-out specs include efficiency requirements for most energy intensive systems like refrigeration, HVAC, lighting, etc. Energy team is a decision-making partner on new store construction Using third-party or equivalent standards such as LEED for Retail, LEED Volume, LEED for Commercial Interiors, BREEM, etc. Using weather stripping and double pane windows where applicable Using ENERGY STAR by Design tool Building design is approached as a system, and achieving 20% or better than ASHRAE code by design Building and construction processes use an enhanced commissioning process on every building Building design is approached as a system, and energy points are maximized by achieving 50% or better than ASHRAE code by design Commissioning data is integrated with the EMIS program to provide performance and startup data tracking (for incorporation into benchmarking programs) 8
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