How IKEA plans to go 100% renewables in Australia by 2020, and save money

In the global market it has almost become de riguer for the big public brand names. Google, Facebook, Apple, Amazon, and others have all committed to have their facilities powered 100 per cent by renewable energy.

In Australia, despite the deep penetration of rooftop solar into households and small businesses, including wineries, such targets are unheard of in big business.
Only one major corporate has made the same undertaking – the Swedish retail giant IKEA. It is part of its global strategy, but IKEA is unique in working to ensure that all its operations in Australia go by the same credo. And they may just be a pathfinder for other Australian corporates to follow suit.
And why not! After all, Australia boasts some of the best solar resources in the world and the highest electricity prices. As Richard Wilson, the head of sustainability for IKEA Australia points out, it is not just a matter of corporate responsibility, it is also about saving money.
“Rooftop solar will lower our costs,” Wilson tells One Step Off the Grid in an interview. His brief was to ensure the plan delivered a payback of no more than 10 years. It will likely deliver a pay back within 5 to 8 years. “Then we will get free energy and that will definitely lower our costs,” he says.
IKEA’s strategy is not – as the nation’s premier financial daily claimed – to go off-grid. But it is to produce the equivalent amount of energy it uses, and to use renewables as its source.
Wilson says IKEA’s strategy is pretty simple – go for the low hanging fruit first. That means retrofitting the stores with energy efficient lighting, and using LEDs in particular.

And, of course, it means installing rooftop solar on its massive retail complexes. By the time the solar installations are complete, IKEA will have 6.2MW of solar installed on its stories in the eastern states. (That includes the 990kW array at Tempe pictured right).
To put that into some perspective, it is more rooftop solar than Australia’s biggest energy retailer and generator, AGL Energy, had installed at the start of this year.
The retro-fitting process is taking around 12 months, and has resulted in a lot of research into the different sort of lighting options.
The newest operating stores, at Marsden Park (pictured below), has 98 per cent LEDs, and this has resulted in energy savings of 30 to 40 per cent. The 651kW of rooftop solar accounts for around 40 per cent of the energy needs.
“This is phenomenal,” says Wilson. “We don’t have a full year of operations yet, and the summer months might get busier (in terms of customer numbers)”. It will likely produce more solar too.
The Canberra store, currently under construction, will go even further. It will have 100% LEDs and its solar array of more than 2,000 panels of solar (500kW) will produce the equivalent of its demand needs when completed later this year.
The last store to install rooftop solar will be at Rhodes, also in Sydney. This has has had the added complication of using the car park on the top level of the store, and the adjoining shopping centre, where the 432kW of solar will also provide shading for cars.
Once this round of installations is completed, IKEA Australia will then look to see what it needs to do to meet that 100 per cent renewable energy goal by 2020.
That could include battery storage. It could include concepts such as virtual net metering, and it could include investment in remote installations.
IKEA, which is spending nearly $2 billion on renewables world-wide, operates more than 300 wind turbines across the globe and that is contributing to targets in other countries. In the US, the two wind farms along with solar on all the roofs and stores where viable (which turns out to be all but four stores) the company is generating 165% of its demand requirements with renewable energy.
Battery storage is potentially attractive because it will allow the company to better align its production with its consumption. “We are trying to smooth out line of power generated and energy use in each store,” Wilson says.
“We are feeding back to grid, but there is no financial incentive to do that. The challenge for us is to use all the energy from the solar arrays. “
But that is a work in progress, he says, because each store has its own characteristics, such as location and orientiation, along with visitation, school holidays and the time of the year. All these factors can make a big difference.
Already, Wilson says IKEA is changing the building management system, and peak demand is now being shifted to different times of the day.
Battery storage is being explored so that solar power can be drawn on in the evenings if not used during the day. “Some stores operate till 9pm, and in the morning battery storage is a real opportunity for us to explore.”
Virtual net metering – where the output of solar on one store might be credited to another store – is also being explored, although the issue of network charges could be an impediment.
Indeed, the issue of electricity charges in general is being looked at closely. Wilson notes that the quotation process with retailers is now becoming an annual event rather than a bi-annual one.
“The questions we are starting to ask is how solar will reshape way we buy our energy.” This could include the ability for retailers to become “energy service providers” rather than just a seller of electricity, particularly if battery storage and virtual net metering are serious options.
Overall, though, Wilson has no doubt about the benefits.
“We want to be fit for business in 21^st century. We see it as opportunity to be planet positive and manage our cost as well. It is about energy security. So we not hit by cost rises from fossil fuel resources.
Do customers care? “It is up to us to care, Wilson says. “We have a long term vision for the business. That helps us develop a long term vision around renewable energy.”