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Dec 19, 2012

Military Malls: Bringing Energy Efficiency to our Troops’ Holiday Shopping

 

Exchange LogoIt’s the holiday season, which means that millions of Americans are shopping for gifts for loved ones, probably at a mall (if they’re not doing all their shopping online). Did you know that there are more than 107,000 shopping centers in the United States, according to the International Council of Shopping Centers? Most are open-air, anchored by supermarkets or a large retailer, but as of May 2011, more than 1,400 were enclosed malls.

But have you ever thought about where our service men and women do their holiday shopping? For many, the answer is the same as for the rest of us: at the mall.

While you may not associate shopping centers with military campuses, many domestic and international Army and Air Force installations include malls. They’re much like other malls, complete with small shops and kiosks, a food court, and a major anchor store (think Macy’s or Target, but tax-free for authorized shoppers). Most are operated by the Exchange. With more than 3,100 facilities and some 12.2 million authorized shoppers worldwide, it is the Department of Defense’s oldest and largest retailer.

This holiday season, something different is happening at the Exchange (other than Black Friday and end-of-year sales). The Exchange and RMI are partnering to dramatically improve energy efficiency across their main stores and food courts. We’re taking a deliberate portfolio approach to identify energy efficiency opportunities that can be applied across multiple facilities. This will save significant energy and thus help the Exchange to align with Executive Order 13423, which requires the military to reduce its base energy use by 3 percent annually through the end of fiscal year 2015 or 30 percent by the end of fiscal year 2015, relative to the baseline of the agency's energy use in fiscal year 2003.

The Portfolio Approach

Military Christmas TreeOur portfolio approach is based on a number of guiding principles:

1. Doing nothing is expensive.

Operating malls under business-as-usual conditions without pursuing energy efficiency has a cost. That cost is more than energy. It includes long-term operations and maintenance costs, costs to replace inefficient components, and potential interruptions to business and services as incumbent building systems fail to function or meet the needs of occupants. Understanding the full, long-term costs (and risks) of “doing nothing” is critical for making an accurate comparison to investing in efficiency.

2. Know what’s possible before deciding what’s feasible.

Based on the best of today’s existing technology, what’s the lowest amount of energy the Exchange would need to run its malls? Understanding this technical potential tells us what’s possible, before time, budget and other constraints layer additional factors onto the energy efficiency retrofit. Otherwise, saying “no” too early in the design process can prevent innovative ideas from evolving into cost-effective, implementable solutions.

3. Bundle efficiency measures.

Grouping efficiency measures together for analysis—rather than studying them in isolation—allows the Exchange to capture synergies between measures. For instance, an efficient lighting design can provide retail spaces the desired visibility without the undesired heat byproduct, which in turn, can reduce the load on the facility cooling system and enable more efficient cooling operation approaches.

4. Eliminate something.

Sometimes we can group measures together so effectively that we hit a breakpoint. If we can get to a high enough level of efficiency we can downsize or eliminate a component, further saving money through potential avoided capital costs and more operational simplicity.

5. Time it right.

A deep retrofit makes the most financial sense when a store or food court already has a planned expenditure such as a roof replacement, a major equipment replacement (for example, a cooling tower or chiller), or a major non-energy related renovation such as a branding overhaul or facelift. Taking such timing into account—including how far along a store is in its life cycle and capital planning schedule—can help determine whether incremental interventions or a deep retrofit would be more appropriate.

In Action at the Exchange

Our portfolio effort with the Exchange is applying these guiding principles to create an energy management strategy for large numbers of buildings.

The first step is to segment the Exchange’s mall portfolio into groups of similar buildings—based on building characteristics, size, climate location, and other sorting criteria—to create subsets of malls that are likely to benefit from similar energy efficiency measures. One subset is selected for deeper analysis. In that subset, we identify a representative building to be audited and modeled, to test potential efficiency measures that can be applied across the entire sub-group.

With the Exchange, we are focusing on a subset of 24 malls that represent 35 percent of the Exchange’s total domestic mall square footage, and approximately 38 percent of the company’s domestic mall energy consumption. To date, two representative buildings—one at Buckley Air Force Base in Colorado, the other at Fort Campbell in Kentucky—have been audited to be used as templates for the remaining buildings. Sub-metering at Fort Campbell, as well as analysis of both facilities, will commence in the New Year.

The Road Ahead

Ultimately, our expectation is that these two pilots will build a strong case for the Exchange to invest in energy efficiency across its malls portfolio, in the most strategic and cost-effective way possible. The path going forward will not be a single solution, but rather parallel paths of programs to achieve deepest efficiencies.

The benefits of such a portfolio approach can potentially extend far beyond straightforward energy savings and reduced operating costs. Well-designed efficiency measures can improve building functionality and aesthetics. Investing in efficiency measures for the Exchange facilities can make retail, office, and dining spaces more pleasant, comfortable, and inviting to shoppers, potentially garnering longer customer stays and increased sales.

And because the Exchange returns about two-thirds of its net earnings to Army Installation Management Command and Air Force Services programs, financial savings through energy efficiency measures will go directly to community programs for service men, women, and their families, such as youth services, recreation centers, arts and crafts programs, and fitness and sport facilities. In the past ten years alone, the Exchange has contributed over $2.4 billion to community quality-of-life improvements. Imagine how that number might grow thanks to portfolio-wide energy savings.

Consider that one more reason for some joy and cheer this holiday season.

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Highlighted Resources


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Indiana Jones and the Great Portfolio Challenge



RMI and AT&T: Working Together on a Portfolio Approach to Building Efficiency

 


Retrofit Image


New Tool Helps Portfolio Owners Prospect for Profitable Retrofits

 

Some images courtesy of Shutterstock.com

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