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Corporate Spending on Green Energy
Reducing Dependency on Foreign Oil, Current Energy costs, and Tax Incentives
Drive Adoption of Renewables and Energy Efficiency Products
By Ann-Marie Fleming,
www.RenewableEnergyStocks.com
February 2006
The incorporation of energy savings systems, environmentally friendly
processes and renewable energy technology has found its way into many
business models for corporations and government agencies.
Whole Foods Market® (NASDAQ:
WFMI), the
world’s leading natural and organic foods supermarket, made history this
month with its purchase of renewable energy credits that completely offset
the Company’s total electricity use. This move represents the largest
purchase of wind energy credits in Canada and the United States. Michael
Besancon, Whole Foods Market Southern Pacific Regional President and Green
Mission task force leader recently stated, “Whole Foods Market is a leader
in the natural and organic foods movement, and that involves caring about
our communities and respecting our environment. This purchase of wind energy
credits is a natural extension of that leadership and is integral to our
core values. Offsetting 100% of our electricity use with renewable, clean
energy strengthens our commitment to be a leader in environmental
stewardship by helping to clean the air and reducing our dependence on
fossil fuels."
This move by Whole Foods Market places renewable energy and in particular
wind technology into mainstream business. Further evidence of mainstream
acceptance of ‘green’ technology for energy efficiency and cost savings is
seen in Wal-Mart’s actions in this arena. With a philosophy that entails
corporate and environmental responsibility as one of the largest companies
in the world, Wal-Mart (NYSE: WMT)
has made a commitment towards ‘green’ solutions. Wal-Mart identified three
key goals in a corporate presentation; to be supplied 100 percent by
renewable energy, to create zero waste, and to sell products that sustain
our resources and environment.
Helping Wal-Mart reach these goals is a focus on specific areas within the
company such as improving fleet efficiency. As the largest trucking fleet in
the U.S., Wal-Mart feels that moves towards increasing efficiency means
corporate savings, environmental protection and the beginning of a new
‘green’ conscious trend in business. “By being the leader, we will not only
change OUR fleet, but eventually change trucks everywhere in the world. We
will do ourselves a big favor, clean the air for our children, create new
jobs, improve U.S. productivity, positively impact our country’s energy
security, and more,” stated Wal-Mart’s CEO Lee Scott, in his Twenty First
Century Leadership speech.
Wal-Mart is also focusing on improving efficiencies within its stores
through innovative technology in energy, heating, cooling, compressors,
lighting, refrigeration etc. with a goal in mind of eliminating 30 percent
of the energy used by their stores.
“Increasing our efficiency in energy not only reduces dependence on oil and
saves money; it also avoids greenhouse gas emissions,” described Scott.
To help meet their corporate goals, Wal-Mart has turned to Rocky Mountain
Institute (RMI), a non-profit organization dedicated to helping businesses,
civil society, and government to design integrative solutions that create
true wealth. As described by Cory Lowe, RMI Outreach Coordinator, “The
Walmart project is twofold. One half entails helping Walmart to increase the
efficiency of their trucking fleet, which is one of the biggest in the
country, through various technologies and techniques; while the other half
of the project is focused on the ‘green’ design of their stores. RMI is
going to help design more efficient stores including increasing the amount
of daylight that gets into stores so that customers feel more comfortable.
We are also aimed at reducing the amount energy needed for heating and
cooling through more passive heating and cooling systems. Walmart is looking
to ‘green’ their image and improve the efficiency of their operations, which
they realize will help them cut costs and increase profits over time.”
Federal Agencies:
Corporations are not the only entities turning to renewables and energy
efficiency products to cut costs, protect the environment and improve the
bottom line; federal agencies are also pursuing this path. Helping to
facilitate the process are companies like Honeywell International (NYSE:
HON), who
continues to contribute to this movement.
According to Steve Craig, Honeywell’s Director, Federal Business Unit,
National Energy Solutions, “Organizationally, we are staffed with trusted
energy experts with a wide range of technology experience as well as having
the engineering, design, and project management experience to create and
implement comprehensive integrated energy solutions. Financially, Honeywell
is investing every day in people and assets to continue our goal of being a
leader in turn-key energy conservation programs.”
Honeywell utilizes a vehicle called ESPC (energy savings performance
contracting). “This is a financial vehicle where end users can upgrade their
energy infrastructures using the guaranteed energy savings generated from
the project as a funding source, not stretched capital dollars. What we are
able to do is spread the costs of doing the project out over a period of
time and have the guaranteed energy savings pay for the project versus
capital dollars,” explains Craig.
Key Drivers:
Green strategies are being supported by a variety of incentives, from tax
credits to corporate image, to overall improvement of the bottom line.
George Burnes, CEO of SmartCool Systems (TSX.V:
SSC;
OTC.PK: SSCFF), a
marketer of advanced energy saving technologies describes, “
As this trend continues and more pressure is placed by governments, the
financial industry, consumers and shareholders of large corporations, new
technology will become a driving focus by energy managers to implement in
their reduction strategies.”
In addition, companies, agencies and ultimately consumers are looking for
alternatives as a means of offsetting the high costs of traditional energy
and rising demand. An extension of this is the country’s quest for reducing
the dependence on foreign sources of oil as a matter of national security.
“Virtually everything we touch, use, or eat has employed the use of
electricity in its manufacture, packaging, marketing, and sale, states Mr.
Tom Djokovich, CEO of XsunX Inc. (OTCBB:
XSNX),
“Due to a combination of rising power costs, and in many regions
insufficient access to even enough power, the international business
community is adopting the use of renewable energy technologies to reduce
operating costs, gain competitive advantages, and improve customer
perception and retention.”
Steve Craig attributes several factors to the growth of corporate and
federal adoption of strategic initiatives in clean energy such as “reducing
our dependency on foreign oil, current commodity costs, emission reduction
mandates and Federal Government Legislation (Epact 2005). In addition,
financial incentives, tax credits, improved technology bringing the cost to
implement down, and flat out common sense are helping to spur this trend,”
states Craig.
Enabling Technology:
Helping corporations and federal agencies pursue the ‘green’ path are
innovative technologies that provide opportunities for energy savings,
independence and an overall protection of the environment. “An innovative
new way to accomplish this is through the use of Building Integrated
Photovoltaics or (“BIPV”) which allow photovoltaic material, in the form of
photoelectric panels, to be incorporated into the design of building
materials; thus, providing a new and smart way to integrate additional
sources of power production into the operation of buildings,” describes
Djokovich. “To address the growing BIPV opportunity XsunX is developing
Power Glass®, a PV thin film that may soon convert ordinary exterior glass
curtain walls into BIPV power producing systems. “We see the use of BIPV
renewable technologies to reduce dependency on utility or grid supplied
electricity as part of an inevitable and growing trend in all building
designs. At XsunX we believe that the BIPV market is in the early stage of
an adoption cycle that may see years of growth and opportunity ahead,”
concluded Mr. Djokovich.
Honeywell’s work with Luke Air Force Base in Glendale, Arizona entailed a
photovoltaic solar-integrated roof that is believed to initially produce
more than 120 kilowatts of power and provide free, zero-emissions energy for
the base for decades. In addition to using BIPV, Honeywell also utilizes
energy-saving water conservation strategies and treatment services, high
efficiency lighting, energy management control systems as well as HVAC
occupancy controls.
Working with companies to help them to realize their goals for energy
efficiency, Smartcool believes they are specifically positioned through
their unique product offerings to help companies reduce energy costs.
“Reducing costs address not only the operating costs that continue to rise
as the pressure on supply and demand face the industry, but as companies
focus on the green energy initiatives and seek to purchase energy credits,
Smartcool provides them a solution that allows them to position themselves
as a Company engaged in a strategy to reduce emissions and become more
energy efficient. The Smartcool energy management system allows managers to
retro fit existing plant or design new construction with a proven solution
used by Fortune 500 companies around the world. Introducing this technology
to the North American market will allow us to impact the political pressures
facing the industry,” explains Burnes.
Ann-Marie Fleming
Ann-Marie Fleming completed her MBA in the United States, where she attended
Webster University. She also holds an Honors B.A from the University of
Toronto. She has over fifteen years of experience within the financial
industry to include retail banking and brokerage, investment banking, and
mortgage brokerage within the United States and Canada, with a firm
background in corporate research.
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