Woolworths Limited - Business Case and Beyond
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Woolworths Limited – Business Case and Beyond Key points Woolworths’ Sustainability Strategy has helped to increase the focus on energy efficiency across the business by clearly communicating management commitment and establishing a number of sustainability goals, including a significant carbon emissions reduction target. Since the launch of the Sustainability Strategy, business case templates for sustainability projects have been redesigned to include a requirement to report on projected reductions in carbon emissions. Rising energy prices mean that the financial returns on many energy efficiency projects provide a compelling case for funding. Trials that include comprehensive monitoring and evaluation of costs, benefits and operational issues facilitate the rollout of energy efficiency initiatives across Woolworths’ facilities. IN THIS SECTION [HIDE] Key points Woolworths Limited: Approach to energy efficiency About the Company Energy use at Woolworths/Safeway supermarkets Energy policy, targets and approach Getting support for energy efficiency projects Woolworths Limited: Supermarket refrigeration retrofits Genesis of the project Investment/ project challenges The solution and outcomes Tips for success Woolworths Limited: Supermarket refrigerated display cases – door retrofit trial Genesis of the project Investment challenge and solutions Tips for success Woolworths Limited: Approach to energy efficiency
About the Company Woolworths Limited is Australia’s leading national retailer with over 3,100 outlets including Woolworths/Safeway supermarkets, BIG W department stores, Dick Smith Electronics stores, Woolworths petrol sites and BWS and Dan Murphy’s liquor stores. Woolworths has over 188,000 employees and serves around 26 million customers each week. Energy use at Woolworths/Safeway supermarkets Woolworths Limited used 12.9PJ of energy in the 2009/10 financial year with the majority of this used by the supermarkets division. Major energy using processes within a supermarket are refrigeration (47%), lighting (23%) and air-conditioning (18%). Energy costs are a significant proportion of a supermarket’s total operating costs and are projected to grow strongly into the future. Energy policy, targets and approach Woolworths has made public commitments and established targets to reduce CO2 emissions. Energy efficiency plays a central role in achieving these targets. The targets are: Facilities (stores, offices and distribution centres) Reduce carbon emissions by 40% by 2015 (from projected growth levels), bringing emissions back to 2006–07 levels. Achieve a 25% reduction in carbon emissions per square metre for new sustainable store designs compared with business-as-usual designs. Transport Reduce carbon emissions per carton delivered by Woolworths owned trucks by 25% by 2012. Reduce carbon emissions from the company car fleet of 3,100 cars by 30% on 2006 levels by 2010. During the development of Woolworths’ nine year Sustainability Strategy in 2006, energy use and carbon emissions were forecast based on business-as-usual development and expansion. In financial year 2010 carbon emissions from electricity use and refrigerant loss were 500,000 tonnes less than the business-as- usual projection. Getting support for energy efficiency projects Since the development of the Sustainability Strategy, Woolworths’ project evaluation model has been modified to include consideration of carbon emissions reductions that may be achieved through the implementation of projects. A dedicated project engineering team has responsibility for the identification, analysis, trialing and implementation of energy efficiency projects across all trading divisions. The team also monitors, reviews and reports on the energy and other savings achieved following the implementation of projects. When potential projects are identified, the team follows a structured project development approach that involves investigating the concept, getting funds approved for trials, conducting trials, reviewing
performance, measuring results and then developing a model for rollout across the stores. The success of a trial is a major factor in determining the extent to which the technology or initiative will be rolled out across the business. Approvals for project trials and funding for the roll out of projects is made by various levels of management, depending on the magnitude of funding required. Woolworths Limited: Supermarket refrigeration retrofits Genesis of the project A number of new refrigeration technologies had been installed in new ‘green’ supermarkets such as 1 Rouse Hill in NSW . Based on the lessons learnt in design, installation and operation of these new technologies, the project engineering team identified a number of improvements that could be made to the refrigeration systems in existing stores to deliver significant energy savings. Investment/ project challenges Since the changes were being retrofitted on refrigeration systems within existing stores, it was important to minimise the potential impact of the installation process on store operations. Although the energy savings that could be achieved in new stores was well known, the energy savings that could be delivered through the retrofit process needed to be confirmed. The solution and outcomes A trial was conducted in eight stores. Detailed monitoring and evaluation of performance during the trial built confidence in the reliability, costs and benefits of the retrofit process. It confirmed that the simple payback period (http://eex.gov.au/glossary/letter/P/#Payback+Period) for the projects would be under four years and they would deliver significant reductions in energy use and greenhouse gas emissions. The lessons learnt from the trial have also been used to streamline the retrofit process, which will minimise the impact on store operations. A progressive roll out of these new refrigeration technologies is underway, with the aim of completing the retrofit in all stores by June 2015. The initiatives that are being implemented include: High efficiency electric motors to drive fans in refrigerated display cases Night blinds on refrigerated display cases to reduce loss of cold air overnight Breeze fences at base of refrigerated display cases to reduce loss of cold air in normal operation. Early results show an average 7% improvement in total energy use within each store in which the suite of initiatives has been implemented. Night blinds on refrigerated display cases Tips for success Innovation incorporated in the design of new equipment can highlight opportunities to improve the energy efficiency performance of existing equipment. Use project trials to increase the accuracy of cost/ benefit analysis for new technology or new applications of existing technology to facilitate the roll out of initiatives across other facilities.
See the section on monitoring, verifying and promoting successful projects (http://eex.gov.au/energy- management/the-business-case-and- beyond/influencing-company-culture-systems-and- processes/monitor-verify-and-promote-successful- projects/) for further information. Display case night blinds Woolworths Limited: Supermarket refrigerated display cases – door retrofit trial Detailed monitoring and evaluation of the performance of our trials is essential. It allows us to demonstrate that we have appropriately tested a project, quantified all costs and benefits and addressed any potential business risks. This makes it much easier for us to roll out the trial projects across our stores and to build confidence in other projects as well. - David Shearsby, Manager - Systems, Analysis & Support Engineering, Maintenance & Services, Woolworths Limited Genesis of the project Many of the refrigerated display cases in Woolworths’ supermarkets do not have doors. They were designed in this way to make it easier for customers to select and access products. However, open display cases can also impact on customer comfort as cold air spills into supermarket aisles, and more energy is needed to keep the products at the required temperature in these open units. The development of Woolworths’ Sustainability Strategy, together with rising energy costs, led to engineering personnel and retail managers investigating the installation of doors on these display cases. However, retail managers were concerned about the impact of the doors on customer selection and access to products. Investment challenge and solutions A trial is being conducted to quantify the energy savings from installing the doors and to evaluate the impact on customers’ shopping behaviour. The engineering and retail outcomes from the trial will be communicated to the relevant decision-makers through Woolworths’ structured project development approach. Tips for success Trials provide an opportunity to gather data and provide feedback on a range of issues related to your project including customer perceptions and feedback. It is important to use trials to provide
information that will address the specific concerns of key decision makers. Refer to the sections on involving the right people (http://eex.gov.au/energy-management/the- business-case-and-beyond/developing-your- business-case-six-strategies/involve-the-right- Refrigerated display case door retrofit people/) and identifying and managing project risks (http://eex.gov.au/energy-management/the- business-case-and-beyond/developing-your-business-case-six-strategies/identify-project-risks-and- develop-strategies-to-manage-them/) for further information. Footnotes 1. Woolworths.com.au – Our first green store (http://www.woolworths.com.au/wps/wcm/connect/website/woolworths/about+us/our- story/green+store+2007) Page last reviewed: 22 February 2012 eex.gov.au is managed by the Australian Government Department of Resources, Energy and Tourism (http://www.ret.gov.au)
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