Navigant Research Blog

Energy Efficient Solutions for Retail Stores Begin To Emerge

— July 23, 2014

The retail landscape is in flux, to say the least.  Earlier this year, Staples announced the closure of 225 stores.  Troubled Best Buy isn’t closing any stores this year, but it was one of the several retailers to close stores in 2013).  Things aren’t all so bleak for big box retail, though.  Costco is in the midst of a 5-year plan to open 150 new stores.  Meanwhile, Walmart announced a strategy of shifting toward 10,000 SF to 40,000 SF grocery and convenience-type stores, away from 200,000 SF superstores.  Large retailers are rethinking their physical footprint.  Part of the shifting landscape comes down to the fact that brick-and-mortar stores, particularly warehouse-type stores, are costly to operate.  Moreover, the energy efficient operation of these assets is hindered by factors such as unpredictable occupancy, high ceilings, and vast open space.  However, smart building technologies are being developed for the specific challenges that face retail buildings.

There are numerous approaches to improving the energy efficiency of buildings (see Navigant Research’s reports Energy Efficiency Retrofits for Commercial and Public Buildings and Building Energy Management Systems).  But many of these aren’t appropriate for large, big box retail buildings.  A recent brief from Johnson Controls’ Institute for Building Efficiency provides a thorough analysis that quantifies the cost and payback of various building efficiency improvements for commercial office buildings.  It details 16 measures that represent 90% of possible energy savings.  Unfortunately, most of those do not address big box retail; they focus on using energy for building occupants, not for empty spaces.  That translates to providing cooling, lighting, and even power for computers only when occupants are in the space.  Though these measures work in office buildings, healthcare facilities, schools, and many other commercial buildings, they don’t provide the same opportunity to many retail spaces.

What does a smart retail look like?

Many retailers have aggressively pursued demand-controlled ventilation, lighting and controls upgrades, and advanced efficiency compressors for HVAC and refrigeration to reduce operating costs.  But the cutting edge of smart building technology for retailers focuses more on the consumer experience than on energy efficiency.  GE Lighting and BryteLight, for instance, are using next-generation LED fixtures to provide location-based services for retailers.  Similarly, the Open Group, a consortium that enables the achievement of business objectives through IT standards, has outlined a use-case of using sensors to provide real-time information to retail customers.

However, Massachusetts Institute of Technology’s SENSEable City Lab has recently unveiled a concept to use smart sensing technology to reduce energy consumption.  Local Warming creates a controllable heating zone around an individual occupant, leaving the rest of the space at a neutral temperature.  The solution relies upon a Wi-Fi-based motion tracking system that controls a system of mirrors and rotating motors to direct an infrared energy beam onto an occupant.  In the future, LED technology can further reduce the complexity of the system by allowing a more distributed source of infrared heat.

Local Warming Concept

(Source: SENSEable City Lab)

While the system is not specifically designed for retail, the most compelling application for Local Warming is clearly big-box retail.  These retail spaces are typically large and sparsely occupied.  Additionally, infrared heating has long been employed in large retail spaces.  Infrared heaters, which transfer heat through radiation rather than convection, warm occupants without having to warm the air.  In warehouse-like stores, with lots of air relative to the number of people in it, infrared provides an efficient method of heating.  Local Warming may signal a shift in the use of advanced sensor and location-based services in retail to the development of more advanced efficiency solutions.

 

European Grids Look to RF Mesh Networks

— July 23, 2014

Communications networks for smart grids have evolved very differently in Europe than they have in North America, with power line communications (PLC) and cellular technology, thus far, as the leading forms of communications for smart meter connectivity across the pond.  Here in the states, the availability of unlicensed (free) spectrum in the 900 MHz band has led to the leadership of proprietary radio frequency (RF) mesh solutions, such as those provided by Itron, Silver Spring Networks, Elster, Tantalus, Landis+Gyr, and others.

The European Commission, however, has taken steps in recent months to bring 48 European nations into alignment on spectrum policy across the continent.  Specifically, for smart meters and smart grid applications (and other machine-to-machine [M2M] applications), the European Conference of Postal and Telecommunications Administrations (CEPT) announced in February a framework whereby 5.6 MHz of spectrum, from 870 MHz to 875.6 MHz, will be set aside for unlicensed M2M uses, including smart meters and grids.  Details can be found in CEPT’s Electronic Communications Committee (ECC) Report 189.

Indoor Reading

CEPT cited several reasons for supporting interoperability, including the creation of economies of scale and cost reduction, reduction in the risk of cross-border interference, and greater flexibility.  The choice of sub-1 GHz spectrum, where propagation characteristics are stronger than at higher bands, makes the spectrum suitable for reading meters that may be placed indoors, even in basements — a common practice in European nations.

Ofcom, the United Kingdom’s telecommunications regulatory body, this year made amendments to its Wireless Telegraphy Act that allow for commercial operations on a license-exempt basis at 870 MHz to 876 MHz as of June 27, 2014; similar action is likely across the 48 nations that participate in CEPT.

This is good news for vendors, like those named above, but also for utilities across Europe seeking more flexibility in their smart meter and grid deployments.  RF mesh solutions are often less expensive than PLC for near area networks, although that varies widely depending upon the structure of the grid in the region as well as the topography.  Nonetheless, some smart meter/communications solutions providers have struggled financially over the past couple of years after ramp-up for American Recovery and Reinvestment Act (ARRA) funding created a spike in demand that has since fallen rather sharply.

Room to Grow

Europe is poised to be the next big growth area for smart metering, thanks to the EU’s 20-20-20 initiative, which a majority of European nations support.  Navigant Research estimates that current penetration of smart meters across Europe is just 15%, compared with more than 40% in North America.  While several nations have made significant progress in deployment (Italy, Scandinavia), Germany isn’t yet on board with the 20-20-20 initiative, and the United Kingdom and France are just getting rolling.  In Eastern Europe, there has been minimal activity to date, particularly in Russia, home to nearly 100 million meters.  For details on Navigant Research’s global smart meter forecast, look for our report Advanced Metering Infrastructure, slated for publication later this year.

The Market for Smart Meters, Europe: 2013-2023

(Source: Navigant Research)

Smart meter shipments in North America are expected to total 121 million between 2014 and 2023; that total is forecast to be 221 million in Europe.  That’s more than $18 billion in anticipated revenue for smart meters — a market of which surely every smart meter vendor will take note.

 

Lighting Innovation: Not Just LEDs

— July 23, 2014

Attendees at the LightFair convention in Las Vegas could be excused for thinking that the show was exclusively focused on LEDs and that LED lighting has already taken over the vast majority of the market.  Surveying the convention floor, new LED products were on display in every direction, and even the big traditional lighting companies seemed to only be showcasing their LED offerings.

Ones to Grow With

However, while LED lighting is starting to represent the majority of sales in some applications, such as street lighting (see Navigant Research’s report, Smart Street Lighting), many other applications, such as office lighting, are still monopolized by older lamp technologies and are only beginning to see competitive LED products.  Moreover, some companies are devoting R&D dollars to develop new non-LED products, and there will certainly be a role for those products to play in a future that will be largely, but not completely, taken over by LEDs.  A few examples of companies that highlighted non-LED products at LightFair are:

  • Indoor Grow Science (IGS) – This company had a much-visited display of its high-pressure sodium (HPS) grow lights, which feature a patented method for venting waste heat so that it does not negatively impact plant growth.  A company representative explained that while IGS is working on LED-based grow lights, there are a number of challenges involved that its officials believe will leave the indoor agriculture industry using HPS and metal halide lamps at least for the near future.  Heat dissipation still has to be managed with LED lamps.  In addition, plants require UV-A and UV-B light, which standard LEDs do not supply.  While UV LEDs are available, they generally degrade faster, which could leave a grower with a light that looks operational to the eye but is not meeting the needs of the plants.
  • Luxim – Having made a splash at LightFair 2013 with impressive demonstrations of its light emitting plasma (LEP) technology, Luxim impressed again this year with the launch of its Resilient brand of industrial-strength products that include LEP, LED, and induction-based lamps.  While LEP lamps have a tiny market share, this company makes a strong case that they can be the right choice in applications that require very bright lights, especially those that benefit from a small point source of light.  Another advantage is a lack of any flicker, which allows for the use of very high-speed photography in sporting and other applications.
  • Genesys – While not an official LightFair vendor, this company’s representatives were busy at the conference making the case for their gHID ballast.  As opposed to typical HID ballasts that operate at a frequency of 50 Hz  to 60 Hz, the Genesys product runs at over 100,000 Hz, increasing efficiency to be comparable to LEDs, as well as extending both lamp and driver life by factors of 2 to 3 times and 3 to 4 times respectively.  The gHID ballast is largely being sold as a retrofit product, where it can often fit inside existing luminaires or be attached outside of them.  Therefore, it does not require the complete infrastructure change that many LED retrofits involve.  In the longer term, the company sees its product as complementary to LEDs, providing a solution for applications where LEDs may not be as successful such as higher wattage lights.

While these companies showcased innovative non-LED products, the leadership of LEDs at LightFair 2014 would be hard to deny.  Out of 27 entrants for the innovation awards in the commercial indoor category, all 27 were LED-based.  Other lamp types may maintain sizable portions of the installed base for years to come and may continue to make sense in certain specific applications, but it’s undeniable that the age of the LED is upon us.

 

In the Islands, Renewable Energy Scales up Rapidly

— July 22, 2014

Renewable energy project developers are touring islands these days, salivating at the opportunity to displace diesel-powered electricity systems that can cost as much as $1/kWh with significantly lower-cost clean power.  Prominent examples include Iceland, where, according to the country’s National Energy Authority, roughly 84% of primary energy use comes from indigenous renewable energy sources (the majority from geothermal); Hawaii, where energy costs are 10% of the state’s GDP, and where the state government has set a goal of reaching 70% clean energy by 2030; and Scotland (part of a larger island), with a goal of 100% renewable energy by 2020.  Several smaller, equally interesting island electrification initiatives present great opportunities for companies looking for renewable energy deployment opportunities that are truly cost-effective for customers and developers.

These opportunities include:

  • In Equatorial Guinea, a 5 MW solar microgrid planned for Annobon, an island with 5,000 inhabitants off the west coast of Africa, is intended to supply 100% of the power for residential needs.  The project is funded by the national government with power produced at a rate 30% cheaper than diesel, the current primary fuel source.  The project is scheduled for completion in 2015 and is being installed through a partnership between Princeton Power Systems, GE Power & Water, and MAECI Solar.
  • The Danish island of Samsø is the first net zero carbon island, where 34 MW of wind power generate more electricity than is consumed on the island.  Fossil fuels are still utilized, so  Samsø is not truly a 100% renewable energy island as often reported.  The project was conceived and designed as part of a 10-year process begun in 1997, following the Kyoto climate meeting in Japan.
  • The island of Tokelau, an atoll in the South Pacific, is home to 1,500 inhabitants and produces up to 150% of its electrical needs with solar PV, coconut biofuel-powered generators, and battery storage – displacing 2,000 barrels of diesel per year and $1 million in fuel costs.
  • El Hierro, the westernmost of Spain’s Canary Islands, is home to 10,000 residents.  With an innovative combination of wind power and pumped hydro acting in tandem, the island is projected to generate up to 3 times its basic energy needs.  Excess power will be used to desalinate water at the island’s three desalination plants, delivering 3 million gallons of fresh water per day.
  • The Clinton Global Initiative has a specific Diesel Replacement Program for islands, focused on deploying renewable energy projects and strategies tailored to the unique needs of its 20 island government partners.  The objective is not only to create cost-effective solutions to reduce carbon, but also to help many of these island nations reduce the often enormous debt that results from relying on imported diesel fuel for electricity.

There are many more opportunities, including Crete, Madeira, Bonaire, La Reunion, the U.S Virgin Islands, and the Philippines (7,127 islands) – which last summer set a 100% renewable energy target within 10 years.

Not all of these projects, particularly the more sophisticated ones, have gone smoothly.  The logistical challenges of island construction add to the overall cost of the projects.  The risk of extreme tropical weather events is always present, including the risk of actually being underwater if sea levels rise as anticipated.  Thus far, financing for many of these projects has come from public-private partnerships, and as I’ve written previously, the coming avalanche of adaptation funding means those avenues are expected to be around for the foreseeable future.  But given the strong economic arguments for residential systems, resorts, agriculture, and other energy-intensive applications that often rely on diesel power for electricity, onsite distributed projects often pencil out without public assistance.

 

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