The retail sector is one of the more energy-intensive industries in Australia. It accounts for around 50% of energy use in the commercial property sector and 5% of Australia’s greenhouse gas emissions.
Taking action to improve energy efficiency and sustainability can boost profit performance and business resilience, while reducing environmental impacts.
‘Green’ retail buildings with good natural lighting, ventilation and high-performance building management systems are cheaper to operate and vastly improve the customer experience. Globally, green retail building projects can deliver both substantial increases in asset value and up to a 10% increase in return on investment.
Energy management, measurement and modelling
Energy audits are a good first step for many retail businesses to improve energy-efficiency. They can identify which investment options would give the best return.
Installing or upgrading sub-metering and energy data monitoring systems can optimise energy management processes. For larger shopping centres, energy simulation modelling of the building and equipment can inform the best strategies for equipment selection and passive design upgrades.
Energy benchmarking is the ongoing review of an organisation’s energy consumption to assess energy performance in comparison to past consumption and to other buildings. Benchmarking allows organisations to identify energy inefficiencies and establish a baseline for measuring improvements across all of their assets.
National Australian Built Environment Rating System (NABERS) rating tools can help building owners and managers compare energy performance with their peers and understand the potential for improvement. Shopping centres can also be rated using the Green Star system which, in addition to energy and greenhouse gas assessment, includes consideration of broader sustainability criteria.
Energy tariff selection
Where a retailer has control over selecting their own energy provider, it pays to identify the tariff that is best suited to its energy demand profile.
The Energy Made Easy website can help to quickly identify the best available deals by comparing all retailers. Victorian businesses can use the Victorian Government’s Victorian Energy Compare website and NSW businesses can use the NSW Government’s Energy Switch service.
Alternatively, retailers may seek the advice of energy service providers to assist with tariff selection. The Energy Efficiency Council has a list of service providers on its website.
There are often split incentives between retail shop owners and their landlords. Smaller retailers have less capacity to pursue energy-efficiency upgrades, due to factors such as uncertainty about their medium-term future. Direct engagement between owners and tenants on the issue of energy management can help break down barriers and develop solutions of mutual benefit.
See the NSW Government’s fact sheet on Overcoming split incentives for more information on mechanisms to address this issue.
Passive design refers to construction that makes the most of nature’s free services, thereby reducing the need for constant equipment operation and high energy consumption. Examples include the use of insulation, reflective roofs, low-emissivity glass and natural ventilation, all of which can reduce heating and cooling costs.
Electric lighting accounts for a large percentage of retail energy consumption and is often the best place to begin when looking to reduce energy costs. Lighting improvement can deliver energy savings of up to 80%, with a typical payback period of 1 to 4 years.
Modern LED bulbs are usually the most efficient option and last much longer than other types of lighting.
See the Lighting guide for more information.
Retailers often need large spaces to display products, which must be maintained at a constant temperature for customer comfort and product quality. Conducting regular HVAC maintenance such as filter replacement and system tuning brings significant energy savings cheaply and easily. Installing air locks or a ‘draught lobby’ at main doors can reduce the load on HVAC.
Installing a programmable thermostat and other control upgrades can allow HVAC to be adjusted more regularly. Sealing and insulating air ducts can improve HVAC efficiency by 20% or more.
For larger systems, proper equipment selection, commissioning and tuning is important to ensure energy savings.
See the HVAC guide for more information.
Shopping centres have large central appliances as standard fixtures, such as hot water systems. Individual stores will vary widely in their appliance use. For example, supermarkets have very high refrigeration energy costs, while electrical goods stores use energy in powering the goods they are selling.
Although water heating accounts for a small percentage of energy use in most retail businesses, there remains scope to reduce costs. Ensuring pipes and valves are insulated, installing low flow fittings and setting the thermostat to the lowest safe level can save as much as 50% on hot water costs. Retrofitting energy-efficient hot water sources, such as instant gas, heat pump or solar, can repay investment in under 7 years.
Optimising the way electrical appliances are used and selecting the most energy-efficient models when upgrading can significantly reduce appliance running costs. For example, the difference between standard and best-in-class espresso machines can be as much as 50%. Ensuring displays, back office computers, signage and EFTPOS are switched off after closing will also save substantial energy.
Energy ratings are an important tool for comparing the energy efficiency of appliances. Search the Energy Rating website or download the free energy rating app to compare efficiency and running costs of different models including the estimated real cost of a product over its lifetime.
Elevators and escalators
Lifts and escalators can consume more than 10% of site energy in multi-level shopping centres. Hydraulic elevators are limited in their potential for energy savings, though improved controls can make the most of existing hardware.
Traction elevators are a more efficient lift option as the counterweight and system components share some of the load. Modern traction lifts also use a regenerative drive which captures the downward energy and transforms it into electrical power.
Upgrading lift motors, lighting, fans, doors, starters and landing systems can often produce energy and maintenance cost savings.
Undercover carparks can consume a surprising amount of energy in lighting and ventilation power. By upgrading lighting, and adding a motion sensor system, lighting energy be can be cut by up to 80%. By installing an oxygen sensor, fans can operate only when more fresh air is needed.
The use of both onsite and offsite solar PV to power retail outlets is increasingly common. Solar PV is particularly viable for businesses with high amounts of daytime electricity usage and large areas of exposed roof. The Clean Energy Council accredits solar PV system designers who can assist businesses to understand their options. Shopping centre owners can consider entering into a Power Purchase Agreement (PPA) to purchase renewable energy at wholesale rates.
See the Renewables guide for more information.
Solar generating clear façade
Solar PV glass collects infra-red light and deflects it to the surface edge where it’s converted to electricity. The glass is transparent and may have broad application in shopping centres where space for natural light and renewable energy generation is limited.
Solar PV carpark
Solar PV carparks are becoming increasingly popular due to limits in rooftop space. A 440kw solar array covering three double-parking bays at Dunsborough Centrepoint Shopping Centre in Western Australia provides shade for shoppers while almost completely meeting the site’s daytime energy needs.
Electric vehicle (EV) charging
Many innovative shopping centres are beginning to offer EV charging infrastructure allowing for customers’ vehicles to recharge while shopping. In the long term, EVs are expected to make up a sizeable proportion of the passenger vehicle stock and infrastructure can be gradually scaled to meet demand.
New business models
The trend in digitalisation is changing the way retailers operate with opportunities to explore new business models and reduce unnecessary business overheads and energy costs. The trend towards more online shopping could mean asset and stock-based retail outlets favour a more customer-centric approach. At the same time, online retail services still require energy use, especially within the transport, storage and logistics sectors.
Digitalisation offers new opportunities for product development, collaboration with other businesses, improving supply chain logistics, and better financial and energy-cost management.
See the Industry 4.0 guide for more information.
Energy in Buildings: 50 Best Practice Initiatives (PDF 4168KB) Clean Energy Finance Corporation
Green Star Retail Ratings Green Building Council of Australia
Retail sector energy efficiency guide UK Carbon Trust
Shopping Centre ratings NABERS