TESCO BEGINS BROAD ENERGY-EFFICIENCY PROGRAM

SARAH MULHOLLAND

LONDON -- Tesco here is launching an energy-efficiency program at 585 of the chain's 700 stores in the United Kingdom. The project has the potential to cut energy consumption by as much as 10%, according to John Ashford, head of engineering for the chain.

The chain has signed an agreement with Emerson Climate Technologies, Atlanta. The retail services arm of Emerson will be providing Tesco with Internet-based, energy- and equipment-monitoring technology to profile the stores' refrigeration; heating, ventilation and air conditioning; lighting; and building-control systems. Two trial stores were fitted in recent weeks, Ashford said. A large-scale implementation will begin within the week.

Of the 585 stores using the service, 275 will undergo Emerson's "E-commissioning" program, a comprehensive energy audit that determines and sets the most energy-efficient settings for a store's equipment.

"Based on the success of the program after the first year, we will look to expand the program to the remainder of the stores," Ashford said.

Ashford declined to discuss the financial details with SN. However, Paul Wickberg, president of the retail services group at Emerson, said that the cost of E-commissioning generally falls between $8,000 to $12,000 per store as a onetime charge. Ashford anticipates seeing a return on investment within three years.

According to Wickberg, energy consumption tends to be a cyclical concern, becoming a higher priority when the business climate is rough. The crisis in the Mideast and uncertainties due to the deregulation debacle in California are adding to the pressure of the economic downturn.

"Anytime there is discomfort surrounding the future availability of energy resources, awareness is heightened," Wickberg said.

Tesco's decision to look into an energy-efficiency program stemmed from a benchmarking partnership with a major U.S. chain, Ashford said. He declined to mention the chain.

"We looked at the benefits that U.S. supermarket operators were achieving through such a scheme, which drove us to the conclusion that the scheme was transferable and would significantly reduce our revenue costs."

Tesco employs its own energy- and maintenance-monitoring team to watch the controls once they are in place. Of primary goal is measuring the sustainability of the E-commission, Ashford said.

"The ongoing sustainability of the energy savings is the big prize," he said. "This is why the installation in all of our stores of the monitoring and targeting system is essential to the success of the program."

Problems may arise given the complexity of supermarket refrigeration systems, and the possibility that somebody may tamper with the settings, he explained. Maintenance personnel may come in to fix an immediate problem, and would not likely take E-commissioned targets into consideration.

Emerson's energy services are in use at several U.S. chains, including Kroger, H-E-B and Marsh Supermarkets, Wickberg said.