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Managing Energy Costs in Warehouses

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 (A); space heating is the primary use for natural gas (B).
Warehouse energy consumption by end use
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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.
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