The New York Times recently ran an article on efforts by retailers to incorporate environmentally friendly designs into their stores.
- Pizza Fusion has store in Florida that reuses draft from ovens to heat water
- McDonalds renovated a restaurant on the South Side of Chicago “crammed with energy- and water-saving gadgets,” including pavement that filters rainwater; tables and chairs made out of recycled material; and a garden on the roof.
- Subway opened 5 “ecostores”
But are these initiatives anything more than stunts intended to color the companies green?
The article quoted an e-mail from a nutritionist who was unimpressed with these initiatives. “Takes your mind off the calories, doesn’t it?” she wrote. But nutrition is a separate question, isn’t it? As long as there are fast food restaurants, shouldn’t they at least be energy efficient?
Other retailers mentioned in the article were:
- Target, Office Depot, Staples, which have opened “green” stores
- Kohl’s, which opened 45 stores built using recycled materials, water-saving plumbing, on-site recycling
- Best Buy, which has announced plans to green their stores
Wal-Mart has committed to spend $500 million annually to increase its own energy efficiency. According to the article, Wal-Mart’s high-efficiency stores save 20-45% in energy costs compared with traditional stores, savings that will have a big impact on Wal-Mart’s bottom line: energy is the company’s second biggest operating expense after personnel.
Electricity is a significant expense for all retailers. According to a 1995 EIA study, retailers used 149 billion kWh of electricity annually, an energy intensity of 11.8 kWh per square foot. (Food service establishments, like the fast-food places cited above, have an energy intensity up to three times greater than retailers. Figures from 2003 available here.)
Burrito Chain’s High-Profile Green Move
One highly visible initiative was recently undertaken by Chipotle, the burrito chain, which installed a 6 KW wind turbine outside a new store in the Chicago suburbs of Gurnee. The company says the turbine should generate about 10 percent of the restaurant’s electricity, or about 8 hours of lighting a day.
Skeptics say the wind turbine is more about PR than renewable energy. An article in Treehugger typified this point of view
“Gurnee being several miles from the Lake Michigan shore, capacity factor for the turbine is likely to be sub-optimal. But, the novelty factor will certainly draw customer attention. Americans, after all, are new to the sight of a wind turbine in a retail or commercial setting.”
A representative of Industrial Wind Action Group, an opponent of wind energy, was quoted last year as saying, “If the intent was to lessen electricity use, they’d almost certainly do better by changing some of the light bulbs or decreasing their air conditioning use.”
Indeed, the area doesn’t seem to be that windy, with speeds averaging below 10mph throughout the year, but with some gusts between 10-20 and as high as 30. (Some sources (here and here) I consulted says an average wind speeds of at least 9-10 miles per hour are required for economical wind power generation.)
And The New York Times article reported that a Wal-Mart official said that the company has found that “large wind turbines did not make sense at its stores.”
Wind Project Works for Energy, Money, and PR
A back of the envelope calculation indicates that Chipotle can probably save some money with the Gurnee wind turbine.
Wind Turbines of that capacity are said to cost between $3,000 and $5,000 per kilowatt of capacity. At the midpoint, then, the Gurnee turbine would cost $24,000. At a 5% cost of capital, that’s $104 per month.
The local power company, ComEd, lists a price of $116.16 per 1000 KWH.
A turbine generating 6KW continuously 24 hours a day for 30 days generates 4320 KWH, worth about $500 per month at current prices. Even if the turbine’s efficiency were one quarter the rated maximum, at current prices, it would be a break-even to slightly profitable project.
It seems likely that Chipotle will spare some fossil fuels and save some money with its restaurant wind turbines. But the biggest return on investment for Chipotle will probably be the PR spin generated by those turbines.