Subject: GreenTech Media
From: "Merilee:::Kern Communications" <[email-masked]>
To: <[email-masked]>
Date: Tue, 24 Mar 2009 13:05:38 -0700

http://www.greentechmedia.com/articles/harvesting-megawatts-from-mcdonalds-5930.html

 

Today's Date: Tuesday, March 24, 2009 

Harvesting Megawatts From McDonald's? 

Comverge, Advanced Telemetry and others are trying to bring demand response and energy efficiency to fast food restaurants, retail outlets, and the thousands of other small businesses out there. 

by: Michael Kanellos
 March 24, 2009 

The power plant of the future might prepare value meals too.

Advanced Telemetry - which makes software and services for energy management and control - says it has been able to cut the utility bills at the fast food franchises by an average of 12 percent to 15 percent a month, according to CEO Gus Ezcurra, mostly by fine-tuning the air conditioner controls. The average bill for a 3,000 square foot outlet is about $2,500. Some monthly bills have been cut by 30 percent, he added.  

The company also recently conducted a demand response trial with a Southern California utility that managed to take several kilowatts of demand off the grid. Tens of kilowatts harvested from fifty or so small outlets won't prevent a blackout, but if you extrapolate the figure across the number of wheel balancing centers, restaurants, video rental stores and 7-Elevens in this great land of ours it begins to add up.

"Eventually you get volume," he said.

Small and medium-sized businesses are potentially poised to become the next frontier for smart grid companies. Approximately 18 percent of the energy consumed in America goes to operating commercial buildings, according to the Department of Energy, and heating and air conditioning can account for 30 to up to 60 percent of that total. Worse, it's not really deployed efficiency: think for a moment how cold Jack in the Box feels when you walk in on a particularly hot day.

Utilities and energy service companies have already begun to install energy efficiency networks and sell demand response services to large businesses. The large business sees a drop in operating expenses and gets a fee for providing so-called negawatts at peak times. The utility avoids a brownout and the service provider gets a fee.

Meanwhile, consumers in parts of Europe and the U.S. have begun to participate in these sorts of networks because utilities have been willing to foot the bill.

Small business, however, has been stuck in the middle.

"Utilities have a tough time getting to below 250 kilowatts," said Comverge CEO Robert Chiste. Small and medium-sized businesses are "a good sweet spot, but it is difficult to get to."

Comverge, though, says it has already begun to penetrate the market. The retailer Limited Brands is a customer. Comverge provides both energy efficiency services (i.e., installing technology that cuts consumption) as well as demand response (i.e., getting customers to refrain from using power at peak times for money) to this market.

One of the bigger stumbling blocks has been customer acquisition. Simply put, it's prohibitively expensive to have a direct sales force that can reach these customers, says Chiste. He wouldn't say exactly how Comverge is getting to these customers, but the company relies in part on tried-and-true mass marketing techniques.

Energy efficiency is a somewhat straightforward proposition. Customers can cut "at least 10 to 15 percent" from their power demands with improved efficiency, Chiste said.

Demand response is tougher, he said. Customers tend to worry about the experience of customers inside their stores. No one wants sweaty patrons. To get around that Comverge will place somewhat strict parameters around the contract. In a typical contract, the company will agree to only take over the controls of the air conditioning system for 80 or so hours a year. And when it takes control of the air conditioner, it cycles it on and off to maintain temperatures.

"We run on very short bursts," he said.

Economic savings actually don't play as big a role in demand response as you might think. The savings from energy efficiency controls are far higher. As a result, Comverge sends customers bounties for demand response services every quarter.

Another big challenge is that power demands at small outlets vary considerably, according to Ezcurra. At times, the places can be nearly empty. The next thing you know, a busload of old ladies on their way to the Konocti Boat Harbor might come streaming in.

"By controlling temperature you can have a tremendous impact on operations," Ezcurra said. Most of these places also don't have CIOs on site. "The employees are there to make hamburgers and tacos," he added.

Nonetheless, the energy efficiency message is trickling down. Advanced has installed energy management systems in 100 quick service restaurants and has orders to install in 300 more. It also provides consoles to houses and has licensed software to General Electric for its SmartCommand product.

Under the stimulus, customers can get 30 percent off on the first $1,500 of equipment, Ezcurra added.