Intelligent Energy Management Systems for Retail Operations

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1 Intelligent Energy Management Systems for Retail Operations YOUR ROAD MAP TO ENERGY SAVINGS AND OPTIMIZATION

2 Using Smart Data to Cut Your Energy and HVAC Maintenance Costs Across Your Retail Locations The advent of IT systems, networking, and technology has revolutionized many aspects of retail operations from point-of-sale systems to supply chain, sales forecasting, and inventory management. Until now, however, energy management is one major area of retail operations which has not been adequately addressed: Many retail facility management professionals still do not have the tools or the data they need to effectively manage and reduce costs across retail branches spread over a diverse geographic area with a variety of climates. Moreover, retail facility managers have also been forced to bear high annual repair and maintenance costs on the hundreds or thousands of individual HVAC systems that generate the largest share of the energy costs in their retail operations. Here, the lack of IT integration forces facility managers in large-scale retail operations to cope with maintaining a geographically dispersed, multi-million dollar portfolio of dumb HVAC systems, wasting energy through inefficient operation, with a sizable number of these units running to failure each year. The result is unnecessarily high annual repair and replacement costs. But today, energy management systems are helping retailers implement intelligent control across the entire range of their operations. Utilizing the power and immediacy of smart data, retail facility management professionals can monitor, measure, manage, and control energy consumption and HVAC system conditions for their entire retail operation from a central location, giving them unprecedented insight into their operation s total energy consumption, and a solid framework for driving additional savings at every store location. 2

3 Intelligent Efficiency: Helping Retail Facility Managers Transform Their Dumb Energy Assets Into a Single, Smart and Highly Efficient System for Total Energy Optimization. Retailers face rising cost pressures on all fronts, and rising energy costs in branch retail operations are a significant overhead cost, especially with retailers operating multiple store locations in different geographic locations. A major problem for facility managers responsible for several or several thousand retail locations is the inability to directly measure, monitor, and control the energy usage for each and every location, and the means to do this efficiently from a central location. 3

4 Without any organizing system or control, the default condition is that each store in a multi-location retail operation has its own thermostat control, which can be set by any store employee to any temperature. On a winter day, a store employee can dial the thermostat up, and forget to dial it back down at closing, or lower the A/C temperature setting during the summer and keep it there overnight. Under these conditions, facility managers have no control of their equipment, and worse yet, no data to help them understand and reduce their energy costs. Even when basic energy-saving solutions are put in place, such as programmable thermostats, there can be several potential problems that are multiplied by the number of store locations involved. For example, without additional temperature monitoring and continuous monitoring and profiling of the store s HVAC system, it is not possible for programmable thermostats installed on a store-by-store basis to be configured for each location s temperature fluctuations, weather conditions, and HVAC system. Without the ability to link temperature control to external conditions or HVAC system specifications, and with no ability to centrally control energy use, the facility manager has little meaningful oversight or control over energy use in any store location. According to the U.S. Department of Energy, heating, cooling, and ventilation (HVAC) accounts for 48% of all retail building energy use HVAC Systems: Dumb and Designed for Costly Run to Failure Breakdowns Another, less noticeable aspect of energy management for multi-location retailers is the condition of the large base of HVAC systems under their management and repair cost responsibility. Rooftop and ground-mounted HVAC units are inherently dumb, in that they have no built-in intelligent monitoring features. HVAC systems also operate on a run-to-failure basis, which enables small problems, such as refrigerant leaks in air conditioning compressors, to become worse over time. As these systems degrade without detection, they cost as much as 15% more to run because they use more energy to achieve the set temperature. As these degraded systems continue to operate, 4

5 their performance continues to deteriorate, and they will often fail without warning. Eventually, HVAC breakdowns occur often requiring an expensive compressor replacement which could have been prevented by advance warning and corrected by an inexpensive, pre-emptive repair at a small fraction of the run-to-failure repair cost. According to leading HVAC system supplier Lennox Industries, the average cost for replacing each of the two compressors in a typical 7.5-ton rooftop HVAC unit is $1,200 each. Multiply each of these run-to-failure situations over many dozens, hundreds, or thousands of individual locations, geographic areas, and climate zones, and it becomes clear that the potential for uncontrolled energy expenses and major HVAC equipment repair costs add up to a significant and nearly uncontrollable expense for multi-location retailers. Programmable thermostats and preventive maintenance programs are inadequate approaches to efficient energy use in multi-location retail operations Current Piecemeal Energy Management Approaches: Helpful, But Do Not Address the Total Solution Needed Currently - available solutions for controlling energy costs, such as programmable thermostats, or Internet-linked thermostats, can help retailers partially control their energy costs, by helping facility managers control temperature settings in each location. And on the HVAC equipment side, preventive maintenance programs can detect problems in some units before they become more expensive repairs. Both existing approaches, however, fall well short of realizing the full potential savings and efficiency available from a true energy management system. For example, programmable thermostats can dial heat and cooling up and down on set schedules, but without an ongoing record of external temperature conditions and system performance for each location, the facility manager does not have the information required to optimize energy efficiency for each location. 5

6 Wireless Internet thermostats provide centralized control, but have been proven by recent hacking incidents to be an IT security risk. Also, because they do not integrate HVAC system operations to provide facility managers with a more unified view of their operation s energy usage, they do not provide multi-location retailers with the full picture of their energy use. And without a means of storing and measuring ongoing heating/cooling use and HVAC performance and providing this information into an actionable, centralized system, they do not offer a solution that can help the facility manager optimize their energy savings for each location, across their entire operation. On the HVAC equipment side, preventive maintenance programs are a high, fixed yearly cost for every location, because they are required regardless of whether or not the equipment at each location requires service. Moreover, once or even twice-yearly maintenance schedules cannot provide early detection of all potential expensive equipment failures, since these failures do not conform to preventive maintenance time lines and often occur without warning. So clearly, the overall problem of optimizing energy savings and system management for multi-location retailers exists. There are different approaches to solving the problem, but each of these are only piecemeal fixes that do not give multilocation retail facility managers the tools and insight they need to fully address the need for an all-encompassing approach to the problem of energy use and optimization. How Facilities Management Professionals Use Smart Data to Measure, Control, and Monitor Retail Store Energy and Energy Equipment Maintenance Costs Intelligent energy management systems solve the problems of inefficient multilocation store energy use and uncontrolled HVAC equipment maintenance costs. Operators can now use a single system to remotely control and monitor energy 6

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8 use, HVAC system health, and capture relevant data. Energy management systems utilize secure, remotely controllable networked thermostats, networked indoor and outdoor environmental sensors, and networked HVAC sensor arrays to continuously monitor each retail location s temperature, energy usage, and HVAC equipment. As a retail facilities management professional you can now consolidate all the critical components of your operation s energy consumption, including: Energy Management Systems give retail facilities managers 360 insight for maximum energy efficiency and cost savings 1) Individual store temperature control; 2) Real-time energy data collection, profiling, and analysis; 3) Continuous HVAC equipment monitoring Energy Management System Key Elements 1. Individual Store Temperature Setpoint Control: Efficient, Real-Time Energy Control, Monitoring, and Measurement Since HVAC systems and configurations vary from one retail location (such as a mall or shopping center) to another, this means that each retail location is likely to use its own default thermostat control provided by the property owner. Our experience has shown that many in-place thermostats at individual store locations may be inaccurate or defective in operation; even when programmable thermostats are used, they may not be set correctly to account for changing needs throughout the day or external weather conditions, or they may not be programmed at all. 8

9 Retail facility managers can upgrade their inconsistent and unreliable base of thermostat controls with precise, networked thermostats whose setpoints can be precisely programmed from your central location for each store. These thermostat controls are also linked to an array of indoor and outdoor sensors that, combined with intelligent data collection and profiling, help determine each location s most efficient and economical temperature settings. The energy management system collects and communicates real-time temperature and HVAC system performance data, measured against each location s outside temperature, local weather conditions, humidity, and cloud cover conditions. All of this data is collected and logged on a real-time basis, creating an ongoing profile of each location s indoor and outside environmental conditions, energy use and continuous HVAC system performance. This data, combined with the analysis and reporting features of the system, gives you unprecedented insight into each store s energy usage, areas of inefficiency, and corrective courses of action. Set and optimize temperature setpoints for every store location to maximize energy savings Most importantly, an energy use profile, created for each store location, helps you easily create an optimized setpoint program to maximize energy savings at each location. 2. Real-Time Energy Data Collection, Profiling, and Analysis: Intelligent HVAC Monitoring for Store-By-Store Energy Savings Optimization Highly accurate, remotely-controlled, and secure networked thermostats installed in each retail unit location continuously gather temperature and weather data for transmission back to the energy management system, and are connected to each store s HVAC system. 9

10 For every store, these remotely-controlled thermostats operate over a secure, wired network, transmitting real-time temperature data back to your centralized location, where it is processed and displayed in your system s monitoring dashboard. Centralized, real-time monitoring of HVAC energy utilization for every store location gives you the ability to precisely measure each store s ongoing energy utilization, as this relevant location, temperature, and HVAC performance information is continuously stored in your system s database. Accessed from a single on-screen dashboard, realtime energy data logging and analysis helps you track each store s energy usage, and compare each store s energy efficiency to the average energy performance for all store locations. Each store s local temperature and external weather conditions are also tracked and stored in the system, so that variations in energy consumption can be tracked and measured against the impact of extremes in local hot or cold temperature fluctuations to optimize system performance and efficiency even under adverse weather conditions. With centralized monitoring, you can immediately know when a store location s energy consumption deviates from its own average usage conditions, from those of nearby store locations, and from the averages of all store locations. Once alerted, you can then take immediate action to find the source of this excess energy consumption and correct the problem. Monitor and optimize each store s energy usage, based on time of day and local weather conditions Retail facility operators report overall energy savings of up to 25% using energy management systems Retail facility operators who utilize real-time temperature control and monitoring have reported significant energy savings up to 25% by optimizing energy utilization in every one of their store locations. 10

11 3. Continuous HVAC Equipment Monitoring: Prevent Expensive Breakdowns and Maximize HVAC System Efficiency To address a critically overlooked area when managing distributed retail locations for optimal energy savings and efficiency, an important element of any energy management system is its HVAC equipment monitoring component. HVAC equipment monitoring plays an important role in contributing to overall energy efficiency: Performance of an HVAC unit at a retail location degrades, for example, when a system refrigerant leak causes a compressor to overheat forcing other HVAC units work harder to compensate for the loss of power from the weaker unit, increasing system load and total energy consumption. Most importantly, since HVAC systems are inherently dumb and provide no warning of impending failure, a refrigerant leak or other problem in a defective HVAC unit will eventually cause the compressor to fail, leading to a $1,500- $2,000 repair cost when each failure occurs. HVAC units operating below their normal performance levels increase energy costs and lead to expensive and disruptive repairs Based on our HVAC equipment monitoring experience, approximately 10% of all HVAC units in multi-location retail operations operate below their optimal level of performance at any given time, and a high number of these units are likely to fail within a short time period. Since each retail location may have one or more HVAC units, this can add up to hundreds or thousands of HVAC units for a large retail operation and a large capital repair cost liability, as sizable numbers of these units run to failure in any given year, causing repair expenses in the hundreds of thousands or millions of dollars annually for a single retail operation. 11

12 How to Eliminate Run to Failure For retail operations, real-time HVAC equipment monitoring and diagnostics for each HVAC system at every store location are integrated into the overall energy management system. 12

13 With HVAC equipment monitoring, temperature sensors are installed at the inlet and outlet supply ducts for each unit, and each of these temperatures is monitored and temperature data from each unit is continuously monitored and logged to the energy system database. The equipment monitoring feature of the energy management system develops a profile of each HVAC unit, and taking into account other variables, such as use of an economizer feature, or extreme weather changes, develops an operating performance profile for each and every individual HVAC unit in the entire base of HVAC units, now networked to the energy management system. Units operating at belowaverage performance levels, based on predetermined values, can now be flagged for a preventive maintenance call (at a cost of around $200). If no monitoring was in place, there would be no alternative for an HVAC unit other than running to failure, leading to a much more expensive repair cost (up to $2,000 or more per unit). Converting Dumb HVAC Systems Into a Well-Managed, Smart HVAC Network Smart HVAC monitoring enables facility managers to treat their entire retail operation s HVAC systems as a unified portfolio of intelligent units now accessible from a single dashboard and control point. Within an energy management system, HVAC monitoring features automated reporting tools that provide real-time reporting on the condition of every HVAC unit in every store location. This enables evaluation and classification of every unit s operating performance, with automated or phone text communications of needed repair tasks transmitted to local HVAC technicians. With HVAC monitoring, the age, condition, and repair record, warranty status, and operating performance of every HVAC unit in a retail chain s operation is also readily accessible in the energy management system database, so that when repairs are needed, management can determine whether it is more economical to replace a faulty unit rather than repair it, based on its age and condition. 13

14 High, Line-Item HVAC Repair Costs Now Replaced by Substantially Lower Pre-emptive Repairs Before the development of energy management systems, the only option available to retail facilities operators was to treat their HVAC repair and maintenance as a single, major line item in their annual budget. But now that HVAC monitoring features make pre-emptive repair possible, repair and maintenance costs can be substantially reduced. So instead of viewing maintenance and repair expense as a given line item year after year, real-time HVAC monitoring with an energy management system enables retail facility operators to prevent HVAC breakdowns before they occur, cutting annual repair expense to a fraction of its former cost. Smart HVAC monitoring enables facility managers to treat their entire retail operation s HVAC systems as a unified portfolio of intelligent units accessible from a single dashboard within their energy management system Once Implemented, Energy Management Systems Provide Insight for Further Energy Cost Savings and Efficiency The savings and greater efficiency of implementing an energy management system are significant benefits, but the most important benefit is insight: Once implemented, the benefit gained from using smart data generated from the energy management system gives retail facilities management professionals a total view of their entire operation s energy utilization, unit-by-unit operating characteristics, surrounding environmental conditions, and detailed performance profiles for each location over time. With access to this total picture of energy utilization, the retail facilities management team is now able to engage in additional energy cost savings programs, backed by accurate data and analysis, to further maximize energy 14

15 savings and operating efficiency throughout the retail operation. For example, access to detailed, historical temperature data for each and every store location enables facility managers to determine which of their stores will benefit by further energy optimization measures, such as LED lighting installations, additional insulation, storefront heat-blocking window film, and many other possible savings improvements. How to Implement an Energy Management System in Your Retail Operation Increasingly, the compelling benefits of an energy management system are making implementation a high priority in many retail operations. Here are some questions to ask when evaluating offerings from various energy management system vendors: Does your system allow for centralized data logging, analysis, and control for each store location? Examine what data is collected, how often, and how accessible is it to you for reporting and management decision-making purposes; Smart Data provided by the energy management system gives retail facility managers the insight they need to pursue even greater energy savings and efficiency What are the reporting and analysis capabilities of your system? A true energy management system not only compiles data, but provides you with the reporting formats and analysis capabilities you need to make intelligent, well-informed decisions on energy usage for each store location; all data collected must also be provided in the reporting formats required to give you meaningful and relevant insight into your operation s overall energy usage, expense, savings, and efficiency options; Does your system include HVAC system monitoring, and how is it integrated into the overall energy management system? HVAC health monitoring is a critical part of any energy management system, and data collected on the performance of your operation s HVAC systems must be integrated into your system s overall energy data profiling and analysis capabilities. 15

16 Pilot Testing is the Key to Implementing a Successful Retail Energy Management System for Retail Operations Based on our experience, the key to successful implementation of any energy management system is to conduct a limited pilot test of the system at a small number of store locations. The pilot test allows the facilities management team to compile the necessary data required to determine the operating efficiency and potential savings yield from the system. Over the few months required for the pilot test, both management and the vendor team will gain a better understanding of the system s performance, and the configuration required for rolling out the energy management system to other store locations. Careful pilot testing and analysis ensures a smoother implementation and provides validation of efficiency, savings, payback and ROI results, enabling facilities management professionals to reap the maximum rewards from their operation s energy management system. 16

17 About BAYweb BAYweb is a division of Bay Controls, an energy solutions company that provides products and services to a broad range of industrial, commercial, and government customers. Founded in 1983, Bay Controls has provided sophisticated energy-saving solutions to industrial customers in 70 countries. The company s solutions deliver over 1.8 Terawatt-hours (1,800,000 megawatt-hours) of energy savings annually; nearly twice the combined output of all of the solar cells in the United States every year. Contact Us Tel: (419) Online: BAYweb 6528 Weatherfield Court Maumee, OH In 2009, BAYweb was launched to leverage the company s industrialsector expertise and technology into the BAYweb line of products and the BAYweb cloud-based system. This brought light and multi-location commercial and institutional facilities a new ability to reduce their energy and operating costs. BAYweb energy management products are in use at thousands of facilities throughout North America. Energy Management Systems for Retail Operations: Your Roadmap to Energy Savings and Optimization 2015 Bay Controls, Inc. All rights reserved. 17