To provide 10 megawatts of demand response (DR) as per the terms of Loblaw Companies Limited’s successful bid on the Ontario government’s 2,500 MW request for proposal.
Currently Loblaw has more than 100 corporate grocery stores in Ontario operating within the requirements of the DR contract, representing retail space of approximately eight million square feet. The DR program is administered by the Ontario Power Authority and executed and managed at the store level by Loblaw.
The Ontario Power Authority approached Loblaw – Ontario’s largest retailer and consumer of one percent of the province’s electricity demand – to assist in reducing electricity consumption during peak provincial demand periods at its Ontario grocery stores.
Loblaw set out to determine the right balance between air conditioning levels and store lighting reductions to satisfy the DR requirement without affecting store product or customer experience. Lighting represents about 27 percent of electricity consumption in grocery stores, air conditioning and heating 11 percent, refrigeration 51 percent and other 11 percent.
The project began as a pilot with 60 Zehrs grocery stores in Ontario participating by reducing lighting between 9 a.m. and 5 p.m. Monday to Friday – the province’s peak demand periods. In addition, during times of increased provincial demand, the stores would “dig deeper,” reducing additional lighting by 30 to 60 percent and cycling down air conditioning systems by more than half. These reductions are centrally operated through the company’s intranet system.
Zehrs customers noticed reduced lighting, but when store staff explained the electricity-saving pilot, customer feedback was overwhelmingly positive. Consumer understanding was further aided by the fact that at the same time, Ontario consumers were also learning the relationship between electricity production and air pollution due to high media coverage covering smog days.
To ensure increased consumer understanding of what was taking place in store, Loblaw developed in-store signage and a public address message that is automatically operated when electricity levels are reduced.
The positive customer support for the pilot led to Loblaw contracting under the OPA’s Demand Response Program for additional reductions and expansion to 70 corporate stores. In 2007, the number of stores participating increased to 115.
In addition to the contracted load reduction, Loblaw is the first retailer in Ontario to institute a “voluntary” reduction program. In summer, high bay lighting is reduced by half during the week whether provincial demand is at peak or not. Loblaw now maintains a 10-percent load reduction in the summer with a further 10-percent reduction when the power grid requires it.
Loblaw benefits from incorporating the DR system in many ways. A financial contribution for meeting the DR contract requirements from the OPA helps to offset the capital investment the retailer has spent to install the system. Further, there is a financial benefit of reduced consumption during periods when the cost of electricity is at a premium.
No staff changes were required to incorporate the DR program. Employees were trained to explain the reasons behind Loblaws’ involvement in the OPA’s DR program and its benefits to the province’s electricity grid. Customers have been supportive of the initiative, viewing it as an environmentally positive undertaking.
Enhancements will be made to the stores’ public address system to improve in-store communications with customers. The centrally operated control system will be enhanced to provide additional methods of reducing power.
The success of the program has encouraged Loblaw to expand DR in 2008 to the balance of its 30 Ontario corporate stores. Plans are also underway to offer the program to its 200-plus Ontario franchise stores. The company is also considering expanding outside of Ontario to other regions of Canada.
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