Tuesday, September 21, 2010

Walmarts Greener Plan

PALMDALE, Calif. — The parking lot at the Sam's Club here looks like others in Wal-Mart Stores' empire, except for one thing. Seventeen wind turbines spin atop the parking lot lights, producing up to 5% of the store's energy.

The turbines, installed in March, represent the largest retail installation of its type in the U.S. and a major test of the technology, Wal-Mart (WMT) says.

In a nearby city, Lancaster, a Walmart gets 50% of its energy from a potentially revolutionary fuel-cell technology.

And Monday, Wal-Mart is expected to announce plans to almost double the number of locations to have solar, with a next-generation solar technology planned for many of them.

In 2005, Wal-Mart set the goal of being 100% reliant on renewable energy. It didn't give a time frame and hasn't said how far it's come. But given Wal-Mart's 8,400 locations worldwide, it's barely made a dent in the goal. Nonetheless, the world's biggest retailer is running real-world tests on green-energy technologies. Because of its heft, it could quickly deploy winning technologies and propel them into the mass market while proving to other companies that the economics work, renewable-energy experts say.

"If these technologies can pass the Wal-Mart hurdle, other people will say, 'We ought to look into it. It's not just a novelty,' " says Gwen Ruta, vice president of the Environmental Defense Fund.

Wal-Mart — one of the USA's largest private users of electricity — isn't pursuing renewables just for good PR. It'll turn to green energy, but only if it costs the same as or less than traditional power. So far, more than 90% of Wal-Mart's renewable projects have met that bar, says David Ozment, Wal-Mart's director of energy.

Since 2008, Wal-Mart's solar facilities, now numbering 31 in California and Hawaii, have even cut the retailer's energy costs by $1 million, Ozment says. That's small change for a company with annual revenue of $405 billion. But it's noteworthy because solar is still, on a national basis, more expensive than traditional energy, such as coal.

Some environmental groups have criticized Wal-Mart for not being more green. Advocacy group Wal-Mart Watch also says that Wal-Mart's green efforts divert attention away from the pollution created by the distance that many shoppers drive to get to its stores, which are often on the edges of cities. But other retail and green analysts say Wal-Mart is pursuing renewables with as much pace as possible, given the economics.

"They're trying to figure out how to apply their low-price model to solar, which isn't low-price," says Joel Makower, executive editor of GreenBiz.com. "This is hard stuff."

A big push to go green

Wal-Mart's work on renewables has happened in conjunction with its other major steps to go green. Five years ago, Wal-Mart pledged to eventually send no waste to landfills because everything is re-used, and to sell only products that sustain people and the environment. The company has since opened prototype stores that are 25% more energy-efficient, thanks to such steps as using more skylights and lights that automatically dim. Its U.S. truck fleet has become 60% more efficient, in part because of better route planning. By 2013, Wal-Mart wants its 100,000 suppliers to reduce packaging by 5%.

Creating green energy is a longer-term challenge. Last year, 10% of the USA's electricity was generated by renewables, led by hydropower and biofuels, the Department of Energy says. That's expected to go to 17% by 2035, the department says.

Wal-Mart says that's a realistic goal, but it hopes to move the needle more. This year, it'll expand use of:

•Solar. Wal-Mart first put solar on 20 U.S. sites starting in 2007 and added 11 more the past 18 months. In the next year, it'll put solar on another 20 to 30 facilities in California and Arizona, it'll announce today. The solar installations produce up to 30% of the facilities' energy.

More than half of the new solar stores will get non-traditional solar panels, dubbed thin film. Wal-Mart's use of thin film on rooftops is expected to be one of the largest commercial installations of the technology in the U.S., says Jonathan Bass, spokesman of SolarCity, which is installing the solar at the stores.

Thin-film solar panels usually cost less than traditional solar panels and require less raw material, making them more environmentally friendly, Wal-Mart says. The technology, around for decades, is less efficient than traditional solar. That has limited its deployment.

But the thin film's lower cost and recent advances in efficiency have made the panels more suitable for large rooftops.

"We're trying to pull thin film from the drawing board to the mainstream, and a company like Wal-Mart has more ability than anyone else to do that," Ruta says. The Environmental Defense Fund worked with Wal-Mart to develop its thin-film plans.

•Fuel cells. Late last year, Wal-Mart installed Bloom Energy fuel cells — rectangular boxes each about the size of a parking space — at two stores in Lancaster and Hemet, Calif.

At the Lancaster store, four of them hum like smooth-running air conditioners. They produce energy around the clock. Customers are unaware of them, tucked behind the store where trucks bring in goods.

"Never noticed them," Dannette Griggs, 49, a substitute teacher who lives in Lancaster, says as she shopped the store.

Bloom Energy, a 9-year-old company, unveiled the technology in February and says it could eventually power homes, apartment complexes, cities and even slices of countries that lack modern electrical grids. Bloom's unveiling won global attention, including a segment on CBS' 60 Minutes. With Bloom's fuel cell, air and fuel — such as natural gas, ethanol or biogas — are fed into the cell. The oxygen ions react with the fuel to produce electricity. There's no burning, so the fuel cell is two-thirds cleaner than coal-fired plants, Bloom says.

Wal-Mart has found the fuel cells work so well that it'll add the boxes, which Bloom says cost at least $700,000 each, to eight to 10 more California facilities within a year, it says. Operational issues have been nil, Wal-Mart adds.

Wal-Mart was one of 20 companies to roll out the technology with Bloom. Others included Google, eBay and Coca-Cola. Bloom expects to have about 100 Bloom boxes deployed in California by the end of the year, and one in Tennessee. In February, it had about 20, says Stu Aaron, Bloom vice president of marketing and product management.

Bloom sought out Wal-Mart, in part, because of its "frugal nature," Aaron says.

Wal-Mart is testing renewable energy at other sites, too.

Twelve mini wind turbines help power a Walmart in Worcester, Mass., and at facilities in China and Japan.

In Canada, a Walmart in Burlington, Ontario, is testing a geothermal installation that includes 9 miles of piping 7 to 9 feet deep under the parking lot. In the winter, the relative warmth of the ground heats a liquid. That's piped into the store to produce heat. In the summer, the earth cools the liquid, providing the opposite effect. Wal-Mart has no plans to expand the concept — yet.

"It's still a living laboratory for us," says Andrew Pelletier, vice president of sustainability for Walmart Canada.


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