Managing Energy Costs in Warehouses


Nonrefrigerated warehouses in the U.S. use an average of 6.1 kilowatt-hours (kWh) of electricity and 13,400 Btu of natural gas per square foot annually. Lighting and space heating account for approximately 76 percent of total use (Figure 1), making these systems the best targets for energy savings. Refrigerated warehouses are more energy-intensive than their nonrefrigerated counterparts because of the large amount of energy consumed by refrigeration equipment. They consume an average of 24.9 kWh of electricity and 9,200 Btu of natural gas per square foot per year.

Average energy use data

Figure 1: Energy consumption by end use
In non-refrigerated warehouses, lighting is the primary electricity end use; space heating is the primary use for natural gas.
Pie chart showing electricity end uses: Miscellaneous 35%; lighting 34%; cooling 14%; computer 6%; refrigeration 6%; ventilation 5%
Pie chart showing Natural gas end uses: heating 87%; water heating 8%; miscellaneous 5%
Top technology uses

Energy costs typically account for 15 percent of a warehouse’s operating budget. To better manage your building’s energy costs, it helps to understand how you are charged for those costs. Most utilities charge commercial buildings for their natural gas based on the amount of energy delivered. Electricity, on the other hand, can be charged based on two measures: consumption and demand (Figure 2). The consumption component of the bill is based on the amount of electricity in kWh that the building consumes during a month. The demand component is the peak demand in kilowatts (kW) occurring within the month, or, for some utilities, during the previous 12 months. Demand charges can range from a few dollars per kilowatt-month to upwards of $20 per kilowatt-month. Because energy costs can be a considerable percentage of your bill, care should be taken to reduce peak demand whenever possible. As you read the following energy cost management recommendations, keep in mind how each one will affect both your consumption and your demand.

Figure 2: Diagram of a hypothetical daily warehouse load shape
Lighting typically makes the largest contribution to the peak demand in a nonrefrigerated warehouse (A), but during the hot summer days, it’s also important to consider the effect that space cooling has on peak demand. Refrigeration is commonly the primary driver of peak demand in refrigerated warehouses (B). Regardless of warehouse type, though, energy-efficiency measures both reduce consumption and lower monthly peak demand charges.
Quick fixes
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Most warehouses can benefit from low- or no-cost energy-reducing actions.

Turn things off

Turning off equipment when not in use is the first strategy any energy auditor will recommend. For facilities that don’t operate constantly, one method to identify energy-efficiency opportunities is a walk through the facility after hours. Much of the equipment that is left on overnight in an empty building is a good candidate for saving energy by switching it off.

Computers and office equipment. Modern warehouses use an increasing amount of information technology. The typical desktop computer, monitor, and shared printer together draw about 120 watts. If left on overnight and on weekends, a single computer setup could add $30 or more to the annual energy bill. Most of the equipment sold today can go into a low-power sleep mode after a period of inactivity. Unfortunately, most users don’t take advantage of this feature, but desktop computers shipped since 2008 should have these options enabled by default. If a facility has networked computers, an administrator may be able to control power settings at the server level with group policy objects (GPOs). The U.S. Environmental Protection Agency has created a free tool, EZ GPO, to assist network administrators in creating GPOs. In addition, if your system has multiple types of hardware and operating systems on the same network it may be worthwhile to purchase a computer power management software solution.

Lights. Turn off lights when they are not in use. Occupancy sensors and timers can help, but a less expensive alternative would be to educate and motivate employees to turn off lights at the end of the day. In some cases, sections of a facility may have more light than necessary and delamping could be an easy energy-saving option to consider.

Controlling outside-air intake. Many warehouses have rooftop units for heating, ventilation, and sometimes cooling. Some are equipped with exhaust fans that bring in outside air for ventilation. These should be set to only run when the spaces are occupied.

Perform regular maintenance

Keeping the facility and equipment in good working order is important both to save energy and to protect equipment.

Maintenance. Regular maintenance of heating, ventilation, cooling, and refrigeration systems—including changing filters regularly—is important for good operation and to avoid wasting energy.

Seals. One major source of energy loss is air infiltration, through gaps around doors on the loading dock and into refrigerated spaces. Regular checking and repairing of gaps in door seals as well as making sure employees keep the doors closed are quick energy savers.

Longer-term solutions
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Although the actions described in this section require more extensive implementation, they can dramatically increase the efficiency of your warehouse.

Install an enterprise energy management (EEM) system. It is impossible to optimize what you don’t measure, so you might consider an EEM system to track your facility’s use of electricity, water, compressed air, gas, and steam. An EEM system combines data-acquisition hardware and software to enable a broad-based understanding of how energy is used in a facility. The data an EEM system collects allows energy managers to track costs, identify anomalies, and automate demand-response reactions. EEM systems can also be used to benchmark a variety of parameters ranging from outside-air temperature to the quantity of packages processed or stored. These insights on performance can be used to compare one facility to another or to look at how performance varies over time. An EEM system would be useful for determining the actual payback periods of any efficiency measures implemented.

Upgrade to more-efficient lighting. Lighting is typically one of the largest consumers of energy in a warehouse; accordingly, it often can represent the best opportunities for savings. Broadly speaking, lighting savings can be found in two areas: installing the most appropriate lighting technology and controlling it effectively.

In a warehouse with old probe-start metal halide lamps, savings can be gained by installing newer, pulse-start lamps, but even more savings can be had with fluorescent lamps or light-emitting diodes (LEDs). High-intensity discharge (HID) lamps (high-pressure sodium and metal halide) were the mainstays of high-bay lighting for many years, but in about the year 2000 advances in the performance and color quality of fluorescent lighting made high-intensity fluorescents (HIF) the most efficient, cost-effective choice in many cases. Compared to HID lighting, fluorescent lighting (predominantly T5 high output and high-performance T8 lamps) offers many pluses, including higher efficiency, longer life, lower lumen depreciation rates, better dimming options, faster start-up and restrike times, better color rendition, and less glare, but they are also more sensitive to temperature variations. On the HID side, higher-wattage ceramic metal halide (CMH) lamps and compatible higher-wattage electronic ballasts have made CMH more competitive in some applications. Induction lamps are also a viable HID option where maintenance costs are especially high, although induction lighting is less efficient. And lamp life ratings for both LEDs and HIFs are approaching those of induction lamps.

Today, LEDs are starting to make inroads into high-bay applications. Compared to fluorescents, LEDs offer similar efficacy (and the technology is still rapidly improving), longer life, similar color quality, more controllability, and better light-distribution patterns. The most promising early applications for LEDs were in cold storage because LEDs perform better in cold conditions than other lamp types. Since then, LED products have become more efficient, and with less heat to dissipate and better techniques for handling the heat LEDs do create, high-bay applications have expanded to more general warehousing applications.

A large warehouse might have the lights on across the whole facility, even if only a small portion is occupied at any given time. In these cases, the ability to just turn lights on when they are needed can have a substantial impact on consumption. Occupancy sensors and timers can capture these savings, but they need to be combined with lighting systems that are effective when controlled. HID light sources have long start-up and restrike times and so can’t be shut off based on occupancy, but they can be dimmed to about 50 percent of initial power. Fluorescent lighting is a better choice for controllability due to its faster startup time, but frequent on-off switching can reduce its life span. LEDs are the most amenable to control—they react instantly and suffer no degradation of life with frequent switching—but they are more costly.

For some warehouses, skylights and daylighting controls can also be a big energy-saver. Lighting control systems can automatically turn interior and exterior building lights on and off based on a preset schedule, rather than relying on personnel to remember to turn lights off.

Optimize refrigeration. Although refrigerated warehouses are generally highly customized, there are a number of technologies that can be considered:

  • Moderately oversized evaporative condensers controlled by variable-frequency drives (VFDs) can be highly effective in refrigeration units.
  • Properly sized evaporator coils cooled with VFD-controlled fans can optimize the energy performance of refrigeration units.
  • Proper insulation and efficient compressor motors are almost always cost-effective efficiency investments.
  • Controllers that initiate defrost cycles based on actual ice buildup are more effective than those that run on timers.

Install a cool roof. In cooling-dominated climates, when it’s time to replace the roof, consider installing a cool roof; these have surface coating that reflects solar radiation, reduces the cooling load, and can reduce temperatures near the ceilings in unconditioned warehouses. A roof renovation could also be a good time to add insulation.

Minimize air infiltration. One major source of energy loss for warehouses can be air infiltration through open loading docks and doors. Similarly, refrigerated areas within warehouses lose a lot of energy when doors are left open to allow forklifts to come and go. This can be minimized by making sure that the doors are closed and sealed whenever possible, but this can be easier said than done. People working on loading docks can find it tedious to open and close doors several times a shift, so they save time by leaving the doors open, which can have a significant energy cost. One solution is to install specially designed doors that open and close quickly (but safely) and encourage employees to use the doors whenever possible. In doorways with so much traffic that even rapidly opening warehouse doors would be too slow, adding strip curtains has proven to be an inexpensive way to reduce energy losses.

Employ radiant heaters. One challenge with efficiently heating a warehouse is the wide range of functions and spaces in the facility. If a large warehouse has a small section used as an office, people working there will expect a reasonable indoor room temperature year-round. The same applies to individuals working on a loading dock on a cold winter day. Maintaining a comfortable temperature throughout the entire large—and mostly unoccupied—space can be costly and inefficient. In these situations, gas or electric radiant heaters (also known as beam radiant heaters) can be mounted above the areas that require heat, keeping workers comfortable even with the building air as low as 40° to 50° Fahrenheit (F) (4° to 10° Celsius [C]). These devices provide thermal comfort to people within line-of-sight, but are not designed to bring the overall air temperature up.

Install big ceiling fans. Improving air circulation with large fans can be an effective way to save a substantial amount of energy. If the space is air-conditioned, ceiling fans save energy by improving air circulation, which can allow the facility to raise the temperature by as much as 4.5°F (2.5°C) while still maintaining occupant comfort. If the facility is heated, warmer air will naturally stagnate near the ceiling where it won’t do much good, but ceiling fans will vertically circulate the air. Several case studies have shown that a few large ceiling fans provide better air circulation and greater energy efficiency compared with multiple smaller, high-velocity fans.

Use electric forklifts. Diesel- or propane-fueled forklifts require extra ventilation in the facility, which adds to the HVAC load in conditioned spaces, making the forklifts less cost-effective. Electric forklifts have higher initial costs (capital plus installation) but lower energy and total operating costs, so the total lifecycle costs are comparable. One often-unexpected cost when deploying electric forklifts is increased demand charges, but these can be avoided by using a timer to only charge the forklift batteries during off-peak hours. An emerging option is the use of fuel cell–powered lift trucks, which are just entering the market.

Install variable-speed drives. Variable-speed drives (VSDs), which adjust motor speed to suit production needs, can cut energy use. They are less likely to be cost-effective on conveyors—where the power requirement is linear—than on pump and fan systems, for which power requirements increase in proportion to the cube of their speed.

Purchase high-efficiency motors. Some warehouses use a number of electric motors, such as for distribution systems, and these can represent a substantial opportunity for efficiency. High-efficiency motors can pay for themselves in electricity savings, and diagnostic systems can identify when motors might need maintenance. Electronic motor starters have built-in programming that can communicate with a facility’s EEM system and notify facility managers if a motor is not operating at its expected levels.

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