A Walgreens Distribution Center Case Study
The Walgreen Company is the largest drug retailing chain in the United States. As of January 31, 2014, the company operated 8,678 stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam with sales of $72B in 2013. In support of all these stores and facilities, Walgreens operates 20 Distribution Centers throughout the United States and Puerto Rico.
Burton Energy Group provides a full suite of demand side energy consulting services for Walgreens Corporate Facilities including strategic planning, energy audits, implementation, project management, demand response, energy awareness and ENERGY STAR® program management, Measurement and Verification (M&V) and utility incentive and rebate management for energy conservation projects. Burton completed an energy audit of Walgreens Moreno Valley Distribution Center in 2012, which provided nine (9) actionable recommendations for energy usage reduction projects in the 1,000,000 sq. ft. facility (including mezzanine). These recommendations included:
- Facility-wide lighting re-lamp
- Heating, ventilation and air conditioning system (HVAC) optimization and controls upgrade
- Central plant chiller and chilled water thermal energy storage (TES) re-commissioning
- RTU VFD installation
- Pick mod lighting and fans control repairs
Implementation of these recommendations has yielded a 30 percent reduction in energy usage to date, which translates into over $700,000 in annual cost savings for Walgreens. In addition, Burton applied for/managed and worked with the local electric utility, SCE to obtain over $435,000 in incentives to help reduce the cost of the project. This is a total of over $1,100,000 savings in the first year and $700,000 per year savings in the following years. These changes have also resulted in additional HVAC cooling capacity through retro-commissioning and the improved use of the existing chillers and thermal energy storage systems, hence eliminating the need for an additional $700,000 chiller system investment.
“The team at Burton worked tirelessly to coordinate these projects and secure the SCE incentives and rebates, which effectively reduced our project cost by half and allowed us to pursue all conservation measures. We are realizing annual electric savings of 30% since implementation along with increased employee productivity, improved light levels, temperature control and overall morale in the DC.”
Walgreens approved the energy efficiency projects, selecting Trane for the HVAC scope and GE for the lighting. Burton worked with each manufacturer to attain the requisite product data needed for the Southern California Edison (SCE) rebate applications. After securing the data, savings were calculated and the required Project Feasibility Study (PFS) documentation and application were developed and submitted to the utility. An independent third-party engineering firm along with the Energy Division of the California Public Utility Commission (ED CPUC) then reviewed and approved the application and project. Project cost, savings and rebate information is as follows:
Moreno Valley Distribution Center Energy Efficiency
|Total Cost (Equipment, Commissioning, Installation):||$968,000|
|Annual Usage Savings|
|– Electricity:||5,535,492 kWh/year|
|Annual Demand Savings|
|– Electricity:||271 kW|
|Annual Cost Savings:||$700,000|
Burton worked as strategic planner, auditor, project manager and M&V consultant throughout this entire project, working closely with Walgreens corporate engineering and rebate and tax teams, Walgreens Moreno Valley DC site personnel, Trane, GE, SCE and Nexant. Upon project completion, Walgreens realized significant energy and cost savings, a substantial utility rebate to offset almost half of the total project cost, increased employee productivity, improved light levels, temperature control and overall morale.