Warehouses walk the green talk

03 Nov 2008Archived News Energetics in the News

PUBLISHED: MHD Supply Chain Magazine By Ju Yeon Jung. Tim Phung, Energy Consultant, Energetics Pty Ltd talks about how organisations are broadening their energy management strategies to not just look at production sites, but also their warehouses.


It is no news that the carbon-constrained economy is just around the corner. With the Federal Government determined to achieve an emissions cut of 60 per cent by 2050 and the climate change white paper due in the coming months, it now seems there is no point any more for businesses grunting about the carbon pollution reduction scheme (CPRS).

Corporations are urged to shift their attention to finding strategies to better cope with the new rules, particularly in terms of reporting and compliance provisions. Under the regulation that became effective this July, corporations that may meet or exceed an energy threshold of 500 terajoules should be collecting greenhouse gas emissions and energy data for this fiscal year with their report to be submitted by October 31 next year.

Not meeting the threshold yet does not mean that a company can stay in its comfort zone. The threshold will be gradually reduced to 350 terajoules by 2009-10, and then to 200 terajoules by 2010-11. Within two years, the legislation is expected to cover around 700 medium and large corporations, which represent over 70 per cent of greenhouse gas emissions in the affected sectors. What is needed to measure companies’ energy use pattern and sport energy-saving opportunities is a transparent and efficient energy accounting and reporting system. And this poses one of the key challenges for businesses to safely navigate the upcoming low-emission world.

Identifying opportunities

Even when the regulatory talk is brushed aside, achieving energy efficiency is essentially every business’s business. When energy use accounts for a considerable portion of a company’s expenses, cutting energy use is not only politically correct but also economically correct.

To help businesses transition to the low-carbon economy, the Australian Government introduced the energy efficiency opportunities (EEO) program in 2006. Corporations that fall into the 500-terajoule threshold need to comply with the program by identifying, evaluating and reporting publicly on cost-effective energy-savings opportunities. The program required participating corporations to complete initial EEO assessments at their corporate, division, site or activity level by June this year.

Energy consultancy firm Energetics has recently surveyed a random sample of participating companies to gauge the scheme’s effectiveness and to define hurdles to implementing the savings identified.

The survey reveals more than 20 per cent or participating companies have gone beyond the ‘minimum compliance’ requirement, with around 70 per cent of organizations reporting that the EEO raised the priority of energy efficiency within the company. Some 47 per cent of respondents identified significant new energy efficiency opportunities (5-10 per cent savings), and nearly all respondents reported that they expected at least a few of identified opportunities to be implemented in the next one to two years.

Energetics’ senior consultant Tim Phung says as companies move forward to revamp their energy management, they are increasingly embracing energy-efficient technologies and a systematic energy assessment process.

“They are much more aware of how energy is consumed at their sites and open-minded to undertaking simple steps to reducing energy consumption.

“They are more conducive to trialing new technologies that can considerably reduce CO2 emissions, with cost savings as a secondary consideration in their evaluation process,” Mr Phung says.

Corporations’ focus on energy efficiency has been widened to include not only main production sites of buildings, but also warehouse facilities.
“Major businesses nowadays have adopted some form of a corporate policy on energy efficiency and seeking ways to reduce environmental impacts from their business operations. This as a result has a flow-on effect to their vendors and suppliers, including warehouse operators who are now wanting to be seen as ‘green’ operators,” he says.

“Warehouse operators are now focusing more on improving energy efficiency either because of climate change issues, rising energy prices or wanting to increase their marketability with a green image.”

Warehouses go dimmer, and greener

Generally speaking, there is ‘a light that never goes off’ at every warehouse facility. Energy efficiency-wise, this constant lighting presents a problem, but also a huge opportunity.

“For a typical ambient warehouse, lighting consumes 50-60 per cent of energy with the remaining energy being used for battery charging for electric vehicles, hot water services, general power and air-conditioning for administrative areas.

“Lighting is an area where substantial savings can be achieved by improving efficiency in the lighting equipment and how it is controlled,” Mr Phung says.

Realising the energy and cost-saving potential that exists at logistics centres, he says, companies are increasingly adopting lighting iniatives such as replacing existing standard high bay and even light-emitting diode (LED) high bay lighting. These fixtures can provide equivalent light output with a lesser energy use.

High-intensity discharge (HID) lamp dimming is another key strategy becoming popular among logistics operators. Simply put, the logic in dimming is that lowering input power cuts energy consumption, and thus operational costs. This practice can incorporate time-controlling technologies to optimize the light output in accordance with variable ambient conditions such as occupancy and available natural light.

While Australian Standard 1680 recommends illuminance levels for warehouses of 80 lux for storage of large items and 160 lux for storage involving reading tasks, typical warehouses operate within an environment with a higher amount of lighting. Challenging the habitual use of a constantly high level of lighting is where the energy and cost-saving opportunities lie.

Case study: Woolworths DC

Major supermarket chain Woolworths is among the retailers working towards environmentally sustainable supply chains, with a CO2 reduction target of 22 per cent by 2015, from electricity used within its distribution centres. Energetics worked with Woolworths to provide support in identifying energy-saving initiatives across these sites.

Following an energy review of each distribution centre, an internal business case was developed with a priority on emissions reductions. Woolworths approved the business case, allocating funding and resources to roll out the initiative across eight major logistics centres in NSW, Victoria, Western Australia and South Australia during 2007-08.

A project was implemented at the 44,000-sqm Sydney National Distribution Centre, part of the Woolworths logistics network. Operating almost 24 hours a day, seven days a week all year round, the facility services fast-moving grocery and general merchandise to retail stores.

Energetics identified that the main energy consumers at the site were high bay lighting at 48 per cent and battery charging of electric forklifts and pallet moves at 29 per cent, with the remainder used by automated machinery, general power and administrative support offices. Warehouse lighting comprised around 700 metal halide high bay fixtures of 400 Watts, with total load reaching 310 kW.

A number of lighting efficiency initiatives have been put forward. The site implemented daylight linking of high bay lighting where either 50 per cent of 100 per cent of high bay fittings are automatically switched on or off depending on the amount of available daylight entering the premises through skylights in the roof. The minimum lighting set point was adjusted to 180 lux.

Office lighting has also been upgraded to T5 with high-efficiency reflectors, along with the installation of occupancy sensors to enclosed areas that are intermittently used such as meeting rooms, change rooms and staff rooms.

After-hours switches were provided to enable overriding of lighting during the set time delay period of two hours.

The roll-out was not without barriers. Mr Phung concedes there was an issue with staff’s behavioral changes.

“There has been some resistance from staff when lights were switched off during daytime even though there was ample natural lighting.

“Education and assuring that lighting levels meet lighting codes helped with alleviating these concerns,” he says.

The project was worthwhile. Daylight switching alone has enabled the company to save 100 kWh of energy, and after-hours switching cutting 300 kWh of energy.

“The project is delivering savings of over 620,000 kWh each year, an annual reduction of 660 tonnes of CO2 emissions, equivalent to removing 145 cars off the road,” Mr Phung says. “Overall, the initiative achieved an annual cost saving of $50,000, resulting in a payback of 1.6 years.”

Take a walk towards resilience

While the details of complementary measures are still being much contested, some industry sectors continue to argue the introduction of CPRS will make Australian businesses lose their competitive edge over unaffected international rivals. However, the emissions scheme is a worldwide policy trend. A similar scheme is already operating in 27 European countries, with others including the US, Canada, New Zealand and Japan set to follow a similar route.

In a submission to the green paper, Energetics’ principal consultant Anna Reynolds contends Australian business has a long way to go to have a systematic green corporate policy.

“It is important to understand what is currently not happening inside business to combat rising energy use. Energetics has assessed over 2,000 companies and we have found that over 85 per cent of those surveyed have no or very limited energy management systems in place,” Ms Reynolds says.

“This means there are no formal processes, little or no accountability, and few people at decision-making and influencing levels tasked with trying to reduce energy consumption and costs.

“With energy use growing at two per cent per annum, it is possible that total consumption will increase a further 10 per cent before the CPRS starts to shift major capital decisions,” she warns.

She says the company’s experience of working in energy management has shown that energy demand and consumption is relatively “inelastic” to price signals. This has been demonstrated in the fact that the high level of energy price volatility that has emerged over the last 12 to 18 months failed to nudge companies to actively pursue initiative to slash their energy consumption. A recent study for the National Electricity Market Management Company also backs this result with its finding that every one per cent rise in energy price translates to merely a 0.3 per cent fall in energy demand.

In a recent interview, Energetics director Jonathan Jutsen urged the government to set up “a very aggressive five to 10 year transition program” for business and for the community. However, he has also stressed companies themselves should realize the vast potential that the new economy presents.

“Business is really just catching up. At the moment they see it as a compliance issue. Then, eventually, they see it as a big, broader risk issue.

“But what they’re missing still is the scale of the opportunity. Estimates have been made that there was going to be about a $20 trillion of business being done in this area over the next 40 years,” he says.

Australian businesses certainly seem to be walking towards greener strategies and practices, whether under external or internal pressures. This move is not without resistance, but there seems to be no other option for companies than complying with climate change policies to survive in the carbon-restricted economy. But as Mr Jutsen says, companies need to do more than ‘complying’. Overcoming the resistance against carbon policies and beating the energy inefficient habits may bring them the resilience to negotiate the shifting economic and social landscapes, and essentially, a chance to grow.

A guide to energy-efficient lighting

With lighting taking up a large slice of electricity consumed in industrial facilities, understanding and adopting appropriate energy-efficient lighting systems is a key to unlock energy-saving potentials.

To maximize energy efficacy within a given environment, companies need to consider several aspects of luminaries such as levels of energy input and light output, light depreciation, lamp life, colour rendering and compatibility with other energy-saving technologies including time controlling and daylight linking.

Generally speaking, longer lamp life and stable light performance translate into less material and maintenance costs. Higher light output with less energy input, along with quick start-up capability, leads to a subsequent cut in energy costs and carbon emissions.

HID (high-intensity discharge) lamps

Conventional HID luminaries use a probe-start method that requires three electrical contacts to ignite the gas. They are about three times as efficient as incandescent lamps which produce light by heating a filament.
There are three types of HID lamps.
1. Mercury vapour (MV) lamps

  • Low initial costs and long lamp life.
  • Poor lumen maintenance: the light output is cut by about 60 per cent by the end of the lamp’s life.

2. Metal halide (MH) lamps

  • Produce at least 60 per cent more light than MV lamps of the same wattage.
  • Better colour rendering (white lights) makes them suitable for colour identification tasks.

3. High-pressure sodium (HPS) lamps

  • Produce more than twice as much light as MV lamps of the same wattage
  • Produce more yellow light. Economical for sites where colour identification is not important.

Pulse-start HID lamps

With higher energy efficiency, pulse-start lamps are increasingly favoured over the conventional Energy Independent and Security Act 2007, all MH luminaries manufactured on or after 1 January 2009 “shall contain pulse-start ballast meeting 88 per cent ballast efficiency”.
Key advantages (over standard probe-start lamps) are:

  • Higher light output at lower wattages: consume 20 per cent less energy
  • Better colour performance (whiter lights)
  • Quicker start-up: pulse-start lamps reach full brightness in two to four minutes whereas probe-start lamps require five to ten minutes.
  • Improved lumen maintenance.

However, weaknesses of HID remain including:

  • A long ‘re-strike’ period : during several minutes of warming up, lamps consume electricity by produce no usable light.
  • Incompatibility with occupancy sensors.
  • Expensive and less efficient dimming systems than those used for fluorescent control systems
  • One lamp per fixture, requiring immediate replacement when a lamp fails.

T5 fluorescent high bay lighting

T5 or compact fluorescent lighting fixtures offer an effective alternative to HID lamps. While traditional fluorescent lighting uses T8 or older T12 tubes, retrofit devices are available to replace existing fixtures with shorter and more efficient T5 fixtures. T5 lamps require a specific type of electronic ballast and glare reduction.

Key advantages include:

  • Consistent lighting performance: T5 lamps lose only around 5 per cent of their light output, compared to an estimated 35 per cent depreciation of standard MH lamps.
  • Instant strike/re-strike
  • Versatility: the instant-on capability makes them ideal to be used with occupancy sensors and enables more flexible dimming.

LED (light-emitting diodes)

More proactive companies are seeking to implementation relatively new LED fixtures for their warehouse facilities. While the semiconductor-based technology has been used mainly for computers and other electronic devices since its development in the 1960s, it has recently become available for industrial applications. The US Department of Energy has projected that LED alone could cut national energy consumption for lighting up to 29 per cent by 2025.

Key advantages include:

  • Long life: LED lamps sometimes can last decades.
  • Lower energy input: most of the energy used is converted into light, minimizing energy waste.
  • Fully dimmable.
  • Compatibility with other light control devices.
  • Cool to touch: LED heats up a small semi-conductor to produce light, emitting little heat. This aspect can also reduce the use of air-condition.
  • Durable: with no glass or vacuum used, lamps are more resistant to breakage or vibration.
  • Less harmful chemicals, including mercury.

Associated technologies

Companies can consider combining other technologies with their lighting systems to further leverage energy efficiency. A few examples are:

  • Timer controls: suitable for sites that are used for a fixed period.
  • Daylight linking: by installing translucent roof panels, warehouses in particular can optimize the use of natural light.
  • Electronic ballasts: ensure longer lamp life and provide continuous dimming. Function better when applied to fluorescent lamps than HID lamps.
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