Trying something new

16th January 2015


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Michael Pennells

Paul Suff learns how Sainsbury's is aiming to reduce its absolute operational carbon footprint by 30% by the end of the decade

20X20 is the name of the sustainability plan adopted in 2011 by Sainsbury’s. It contains 20 commitments to achieve by 2020, including five related to the environment.

One of those is to reduce absolute operational carbon emissions by 30% compared with 2005 levels. The retailer is increasingy confident of hitting its 2020 operational carbon target.

The keys to achieving it are more energy-efficient stores and an investment in technologies to lower their carbon footprint. Paul Crewe, head of sustainability, energy and engineering at Sainsbury’s, told the environmentalist that electricity consumption across the retailer’s stores was down 12.7% overall in December 2014 compared with 2007/08, and for those stores operating in both 2007 and 2014 by 24.1%.

Over the same period, sales area space has increased by 40%. “We are also now much less reliant on the grid,” Crewe says, reflecting the fact that Sainsbury’s has invested heavily in onsite ground source heat pumps, biomass boilers and solar photovoltaic panels, among other technologies.

Compelling story

Project Graphite, the retailer’s carbon reduction programme, started in September 2011, and is a multi-million pound initiative to help secure the 30% target. In July 2014, Sainsbury’s agreed a “green” loan with Lloyds Bank and the Dutch financial services business Rabobank, which the supermarket chain says is the first commercial loan of this type to be structured specifically to support environmental and sustainability initiatives in the retail sector. The £200 million deal will fund clean energy generation, energy efficiency and water saving projects across its portfolio of stores and properties.

The scale of the investment in efficiencies and low-carbon technologies is because energy is one of the retailer’s largest costs, though that is not the only driver. Crewe explains that Sainsbury’s uses just under 1% of all the electricity and gas consumed in the UK each year.

“Investing in measures to reduce energy consumption and carbon is obviously the right thing to do for the environment and the planet, but it has to make business sense. There has to be a real commercial benefit too,” he insists. Crewe says the Sainsbury’s board backs the carbon reduction programme, yet he won their support by keeping his message simple. “Sustainability captures a number of areas, and can be complex and difficult to communicate upwards,” he says.

“Focusing wholly on the ‘green sustainability benefits’ was not the answer and it was key to bring to life the compelling commercial aspects of how a changing natural and regulatory environment will impact Sainsbury’s, in terms of rising energy and water costs coupled with rising carbon taxes. If we had chosen to do nothing moving forward from 2011, there was a real possibility that our energy costs could triple over the next 10 years, and that’s a scary scenario for a company with an energy bill the size of Sainsbury’s.”

Not that Crewe has a blank cheque to invest in just any low-carbon technology or project. The board has set challenging “hurdle rates” – that is the minimum return expected from an investment. “Graphite has to stand on its own two feet,” Crewe says. “There has to be a compelling business case to invest in a particular technology and payback needs to be within the hurdle rate agreed. Everything we do has to make a return on investment. This is not about ‘greenwash’.

“An investment also has to benefit the group as a whole and is not about building just a few super energy-efficient or ‘green’ stores. We can learn much from installing a technology at a new site, but we also want something that we can roll out across the Sainsbury’s estate.” Crewe’s focus therefore is mainly on the retailer’s existing outlets, which number more than 1,200 and range from small convenience stores to large supermarkets plus logistics depots and its store support centre head office sites too.

Chilling effects

Sainsbury’s use of electricity accounts for about 53% of its carbon footprint, which in 2012/13 amounted to
1.44 million tonnes (scope 1 and 2). At 40%, refrigeration consumes the largest proportion of the annual energy used across Sainsbury’s operations. Heating accounts for 20%, along with 20% for lighting and 20% combined between in-store bakeries and counters.

As the largest single source of energy consumption, refrigeration has been key to lowering the company’s carbon footprint. The retailer is aiming to switch all of its stores to natural refrigeration by 2030. Crewe reports that 193 stores have already been converted, reducing carbon emissions by 33% and supporting energy efficiency aims. Its depots all converted from hydrofluorocarbon to natural refrigerants, including
CO2 and ammonia, in 2011.

The Sainsbury’s Local in Haslucks Green, Solihull, which Crewe describes as the UK’s greenest convenience store, was the first of its kind in the firm’s estate to install a small-scale CO2 refrigeration system. Sainsbury’s is also piloting the use of fridge doors at some of its convenience stores to understand the impact on both the customer journey and energy.

Separately, the food retailer has installed ground source heat pump technologies (GSHP) in about
20 stores so far. It enables heat produced by chillers to warm the store. A refrigeration system in retail is similar to domestic refrigerators. Inside it is cool and at the back there is a condenser that dispels the heat from the refrigeration process and is warm to the touch. The GSHP stores this heat in boreholes drilled around
200 metres into the ground and it is pumped back into the store when needed.

Sainsbury’s is partnering with several specialist companies to implement the largest GSHP programme in the UK, with aspirations to roll out significant numbers across its estate. Crewe says the technology reduces energy consumption by more than 30%.

Power to the store

Solar photovoltaic (PV) arrays are an increasingly common sight at stores and depots operated by Sainsbury’s. The retailer is the largest operator of rooftop solar PVs in Europe and is aiming to have installed more than 170,000 panels on its premises by spring 2015. “We’ve installed 150,000 solar PV panels so far and over the next few months that number will rise to generate 4MW of power,” says Crewe. “Supermarkets are ideal for PVs, as many have the equivalent of several football pitches on their roofs.”

The sales areas in more than 200 stores have been converted wholly to LEDs. “They are one of the most important technologies we’ve invested in,” Crewe says. Installing its first LED system at the outlet in Leek, Staffordshire, for example, has reduced the cost of energy for lighting by 59%. Crewe explains that Sainsbury’s has used various LED light types, such as flat panels, linear, high bay and blade lighting, across its stores and depots and has worked with manufacturers to identify the right solutions for different properties.

Sainsbury’s is also keen on power from anaerobic digestion (AD). Among UK retailers, it is the largest user of energy from the technology, purchasing enough AD energy to power 2,500 homes each year.

In 2011, Sainsbury’s signed a rolling contract with waste company Biffa for the retailer’s food waste to be sent to AD plants. One outcome is that, in 2014, Sainsbury’s announced that its store in Cannock would be the first to run entirely on energy produced from food waste. The store is supplied with power via a unique private 1.5km cable from Biffa’s Poplars site, which is the largest operational AD plant in the UK dealing with source segregated food waste. To Crewe, the Cannock site is an exemplar of the circular economy in action.

In addition, Sainsbury’s invested in renewable enrgy company Tamar Energy in 2012, supporting its plans to develop a UK network of AD plants.

Sainsbury’s has also installed biomass boilers in 94 of its stores, generating 54.8MW of thermal heat. Crewe concedes that, although biomass boilers have been a vital contributor to the organisation’s carbon reduction plans, he is now focusing more on other technologies for renewable heat, including combined heat and power (CHP) and GSHP technologies.

The retailer has two triple-zero stores in its network, at Leicester and Weymouth. Both earn that tag because they emit zero carbon from all operational energy used, send zero waste to landfill and have zero impact on the water usage of the local catchment area. The 8,100 m2 Leicester outlet relies on an onsite CHP system. In this case, the store uses natural gas from the grid and the equivalent biogas is imported into the national network each year from AD facilities across the UK.

The triple zero stores are being monitored closely with expectations that the use of this technology will be repeated across the estate as Sainsbury’s secures more supplies of gas from operators of AD facilities.

Sainsbury’s has also pioneered the purchase of energy directly from renewable suppliers. In 2008, it became the first company in the UK to agree such an arrangement, signing a 10-year deal to take all of the power generated by a 6MW wind farm near Glasgow. Now more than 15% of all power consumed in Sainsbury’s is contracted through such sustainable power purchase agreements.

New thinking

Some of the technologies being rolled out at Sainsbury’s have come as a result of the retailer’s desire to embrace innovation. The GSHP system installed in 20 outlets is regarded by Sainsbury’s as groundbreaking and Crewe hopes other retailers will install similar processes soon.

Other technologies are still being piloted. In 2013, Sainsbury’s, in partnership with the logistics company Carrier Transcold, started a two-year trial of what the retailer described as the “world’s first naturally refrigerated truck”. The refrigeration trailer is free of HFCs and, if the trial is successful, Sainsbury’s entire fleet of refrigeration lorries could be switched to the system, which would cut its annual carbon footprint by 10,000 tonnes. Also in 2013, the retailer trialled a solar PV canopy over the forecourt of a number of its stores, including the refuelling station at its Leicester outlet. It is expected to provide a quarter of the station’s total annual energy requirements. Again, the technology may be rolled out across the estate if it proves successful.

Crewe is keen that suppliers of energy-efficiency equipment continue to innovate, energy storage technology being in his sights. “I’m looking for a way
to generate energy from existing assets that enables us to store energy when it is cheapest and at cleanest to use later,” says Crewe. He also wants mini GSHP systems to come to the market. “GSHP systems are only viable in stores with at least 4,650m2 of space, so we need mini-versions for our smaller stores.”

Crewe has this message for suppliers: “We need more new ideas and innovative technologies to enable us to continue to reduce our energy and carbon consumption. We’re always willing to try new commercially viable technologies to see if they can help us achieve our stretching 20X20 targets.”


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