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A Wicked Problem: Energy Management in the Retail Sector

The retail sector is the largest commercial property sector and a vital part of the UK economy. Valued at over £300 billion, it accounts for one in 12 companies and employs one in nine working people. Businesses in the sector are diverse, ranging from multinational corporations to small independent stores. Hamleys_toy_shop biggerAcross this diversity, the sector as a whole faces a number of challenges, including the global economic slowdown and the growing problem of energy management.

Currently, all firms and organizations pay energy bills, but not all actively “manage” energy. Where energy management does occur, it is usually driven by financial concerns or corporate social responsibility, rather than being treated as a strategic business opportunity (Cooremans 2011). Energy prices have increased significantly in recent years, as have the number and nature of government requirements for understanding, displaying, and reporting energy consumption. Over the past 40 years, the poor uptake of retrofit technologies and management practices has resulted in efficiency and performance “gaps” between how buildings perform in practice and in theory.

WICKED Solutions for the Retail Sector

Working with Infrastructure, Creation of Knowledge, and Energy strategy Development (WICKED) bridges these gaps through scientific research on buildings, energy and organisational behaviour. WICKED’s cooperative research programme uses a mix of partner engagement, big data analytics, and empirical research to investigate the retail sector at multiple scales.  Building on this evidence base, it co-designs market-ready energy strategies for diverse user groups.

  • WICKED engages users of different types and sizes. WICKED project partners include energy suppliers; retail property owners, landlords, and tenants; business support groups; and energy advice companies. Beyond these immediate partners, we will collaborate with other businesses and sector groups in the course of the research, engage with policymakers, and benefit the public.
  • WICKED produces usable products: online energy advisors backed up by large data sets; low-tech“smart-er” retrofits for manual gas and electric meters; new forms of leasing agreements; energy strategies tailored to companies of different shapes and sizes.
  • WICKED investigates five research themes across a spectrum of owners, tenants, SMEs and bigger businesses: three kinds of infrastructure (metering, organizational, and legal), knowledge creation, and energy strategy development.  By integrating these themes, WICKED will provide new solution sets and creative opportunities for retailers.The WICKED academic team combines expertise in energy use, maths, computing, engineering, physics, law, and organisational behaviour.

WICKED Research Themes

  1. Metering Infrastructure: The project develops and implements the concepts of “data rich” and “data poor” to identify and map barriers to and opportunities for better energy management. “Data rich” organizations have automatic meter reading (AMR) and are typically (but not exclusively) larger organizations with energy managers. A Carbon Trust study found there are approximately 2.7 million manually-read meters in UK SMEs, which are read only quarterly or annually.  These organizations are “data poor” and present different energy management challenges than “data rich” organizations do. Although there are plans to replace and upgrade 53 million electricity and gas meters by 2020, an energy data gap between the rich and the poor will persist until then.
  2. Organizational Infrastructure: A recent Major Energy Users Council (MEUC) survey found that 75% of respondents said they have at least one staff member responsible for energy, but the rest have not allocated staff time to manage energy concerns.  62% of respondents had a clearly defined energy reduction strategy for their business, but the remainder did not. These results indicate gaps in organizational capacity to manage energy, even amongst self-defined major energy users. Staffing is an acute problem for many SMEs, typically without an energy manager, who do not have the necessary information to improve energy usage profiles.
  3. Legal Infrastructure: Half of the total UK stock of ‘core’ commercial buildings (shops, offices and industrial premises) is occupied by tenants (Dixon, 2009). Energy management opportunities in leased properties depend on the physical premises, the varying organizational capacities of both landlord and tenant, and the language of the lease itself. Even new “green” leases have been found to vary in the extent to which they allow changes and data sharing (Bright 2014); non-green leases (the current norm) are very unlikely to permit such alterations or promote data sharing.
  4. Creation of Knowledge: WICKED is focused on knowledge creation, rather than the generation of information.  A current assumption in much of the “smart” meter, home, building, and grid research is that more information is always better.  However, it is also well known that more information cannot be utilized without data management and accompanying analysis. Through research across and within market segments, WICKED seeks to uncover how much information is needed and by whom, for what purpose.
  5. Energy Strategies: Better energy management is not a one-off.  Given the dynamic and volatile nature of the energy market, energy management should be an ongoing practice that requires continuous focus on wiser use of resources. This research focuses on appropriate energy strategies that can support both the immediate deployment of energy management practices and longer-term changes to enhance competitiveness.

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