Energy reduction becomes a priority

With growing concerns about climate change and electricity costs soaring, the cold storage and distribution sector faces a challenging future. Francesca Twinn reports on how new research could help to provide the answers

We're all skating on thin ice, it was reported in the film An Inconvenient Truth (2006). Following last month's report from the Intergovernmental Panel on Climate Change showing incontrovertible proof of man's influence on global warming, the subject has moved centre stage. With refrigeration recognised as a major contributor to greenhouse gas emissions, where does that leave the cold storage and distribution sector?

Soaring electricity charges have been hitting companies' pockets for years, taking precedence over environmental issues. Consequently, cost saving has been the industry's main priority, says the Food Refrigeration and Process Engineering Research Centre (FRPERC) at Bristol University.

The FRPERC is currently developing energy-efficient heating and cooling systems for the food industry using air as the refrigerant and heating medium. It says: "Companies are very interested in technology from an environmental aspect, but would only take it up if it proves to be energy efficient as well as environmentally beneficial."

High energy costs were blamed in part for the demise of the UK's second largest cold store operator, last year (Food Manufacture April 2006 p20). The fate of Celsius First has acted as a warning to others to raise their game.

Paul Singh, md of operator TDG Temperature Control Services, says: "The industry is aware of the issues and is making pragmatic choices, although some customers are looking for rate reductions to offset their additional energy cost increases."

John Hutchings, chief executive of the Cold Storage and Distribution Federation (CSDF), claims that the sector saw little improvement in 2006, but is committed to promoting energy efficiency.

The greatest success so far, he says, is the Climate Change Agreement (CCA), which now offers an 80% reduction in the Climate Change Levy on energy bills to companies that achieve a 12% reduction on storage energy consumption during the next five years.

Tough times

Jeff Anderson, md of Wincanton's manufacturing division, says: "Third-party logistics are currently experiencing some of the biggest challenges they have ever faced in the chilled storage market, from the constant demand for innovation to [combat] rising energy costs."

However, he adds: "The market continues to expand and there are opportunities for companies that are willing to embrace change."

As well as investment in new technology, the fact that individual companies and plant vary is not something to be overlooked. It's not always a simple matter of replacing old with new; in many cases it's about optimum use of existing machinery and processes and ensuring companies know how to use equipment in the most energy-efficient ways.

The government has funded a number of research projects focusing on energy efficiency. However, as the FRPERC points out, quality and safety of food has to come first. The FRPERC's own examination of energy use in refrigeration is in its early stages, mainly mapping where energy is actually used. "Surprisingly, there is little good data on this," it reveals. The team is seeking alternative technologies and developing mathematical models to optimise processes.

Elsewhere, cold chain specialist Christian Salvesen is working on a project with the Carbon Trust on the 'defrost cycle' of evaporators. "Like any fridge, the cooling elements in a cold store are prone to icing up, so periodically they are warmed up to melt the ice and remove the water. The less energy we use and the less heat we have to introduce into the cold store, the more efficient the overall process," says Tom Salvesen, the company's marketing communications manager.

With increased awareness, companies are realising that they need to invest in, and make use of, energy efficiency and sustainability initiatives, says Hutchings: "Customers are demanding it and it can lead to cost saving ...Consolidation has become the keynote. The fittest, most efficient and proactive operators will survive and grow. Who these will be is impossible to judge at the moment."

Companies are making use of available resources, such as the Carbon Trust's sponsored surveys and proposed improvements. But they also have their own ideas.

"An area where they could do more is to simplify the whole refrigeration process so that it is easily understood by all managers," suggests Singh. "Initiatives to drive down consumption and explore all alternatives are going to come from general managers and not the engineers. So, the easier the process is understood by everyone, the more chance of it being challenged."

Salvesen adds: "Operations have become more efficient and price increases have remained well below inflation over the past 10 years, so a large proportion of inflationary increases have been borne by the operators. Apart from their use of electricity, cold stores are quite clean operations."

According to Salvesen, reducing electricity costs in cold storage remains a tough problem to resolve with some solutions simply not proving to be worthwhile. "The local generation of electricity from renewables remains an option, but currently does not offer a good return on capital for retrofitting to existing sites. Newer stores are better insulated and, therefore, inherently use less electricity to operate. But with prices in the market at current levels, few operators can justify the investment."

The FRPERC says legislation and agreements, such as the ATP agreement for the transportation of perishable foodstuffs in Europe, can help. But with rising energy costs the main driver behind companies reviewing their energy consumption, "new tough legislation would produce very rapid changes throughout the industry"

However, Salvesen claims: "New legislation regarding the use of CFC [chlorofluorocarbon] gases in refrigeration plant will drive some older stores out of business, but overcapacity will restrict investment in new plant for some years to come." Hutchings agrees: "The burden of legislation continues to increase and this inevitably increases costs. The government needs to recognise this and produce more proactive schemes, such as the CCA, where there are real incentives to conserve energy."

So, is there a vicious circle at work here?

Singh says TDG supports new legislation, such as phasing out CFC gases, in view of the scale of their adverse environmental impact. The company has invested about £1M in improving the energy efficiency of its buildings and plant and has worked closely with the FRPERC, with positive results already. It has also been exploring the use of alternative green sources of electricity generation, such as wind turbines.

Challenging established thinking

The energy efficiency ball is now firmly in the industry's court, however, timing is critical.

"It's up to us to challenge the status quo," says Singh, "Do we need current storage temperatures or could they be raised a degree or two?

"A commonly quoted statistic is that raising the temperature by one degree will reduce energy consumption by three per cent - this will make a real difference to the environment. Whilst in the past, a high degree of tolerance was built into the storage temperature, perhaps now with more efficient supply chains and more reliable temperature monitoring through the chain it is time to review this."

Wincanton is investigating renewable energy sources, currently supplied to two of its sites, including its head office. It has achieved ISO 14001 accreditation across a number of sites. ISO 14001 is an environmental management standard, which focuses in part on reducing energy consumption and increasing recycling. Wincanton is also developing its own in-house energy efficiency experts who can explore areas such as lighting technology, refrigeration equipment, motors and air compressors.

With companies starting to commit themselves to the long journey of energy reduction, despite current problems, there may be a glint of light at the end of the tunnel.

According to the FRPERC: "If energy costs stabilise, changes will be slow; possibly, companies will look at energy efficient solutions when purchasing new equipment, but are unlikely to radically change their systems. If costs continue to rise, companies are more likely to invest and consider alternative refrigeration systems that are completely new - if they are more energy efficient."

However, Singh stresses the importance of broader concerns: "Ultimately, the issue of energy usage affects far more than just the temperature-controlled logistics community. The culture of wasting energy will not go away until everyone realises the consequence and the resulting impact on the environment of their actions.

Demand for energy to cool products will rise as ambient temperatures rise due to global warming, says Singh. "This winter already, due to higher than expected ambient temperatures, we are using more kilowatt hours than planned."

The UK is increasingly vulnerable to fluctuations prices as it relies more and more on imported fuel to supply its needs. This, claims Singh, "makes the future very interesting indeed". FM

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