Page 55 - Forbes India (December 2015)

wasting less energy isn’t just good on ourselves,” says David Ozment, obvious,” says Ozment, a 66-year-
for the planet, it’s good for business. Wal-Mart’s energy chief, “everything old career electricity executive who
It’s good for the bottomline.” we do has to make business sense.” If has been at Wal-Mart since 2003.
And it’s great PR for a company Ozment were worried about making “Why put up our own capital?”
that has been lambasted for a range the business case for green energy, At a dozen California locations,
of corporate sins, from low wages he could just follow the lead of other SolarCity is even sweetening the
and deplorable working conditions retailers like Kohl’s and Starbucks, setup—installing backup batteries
to accusations of predatory pricing which brag of running their developed by Tesla Motors. They’ll
and monopolistic behaviour (it denies operations 70 percent-plus carbon- help Wal-Mart save even more
these things). But if Wal-Mart’s energy free. But they do so by buying carbon by storing up solar power from
initiative sometimes smells a little credits or “offsets” to balance out the sunniest parts of the day, then
like greenwashing, the Bentonville, their greenhouse-gas emissions. Were dribbling it out in the late afternoon
Arkansas-based giant (2014 sales: Wal-Mart to follow this approach, when demand-driven electricity
$480 billion) is far too savvy to lose it could offset its 20-million-tonnes- prices are highest. Wal-Mart
money on it. Rather, the retailer has per-year carbon dioxide footprint has a similar setup with Bloom
off-loaded the capital investment— for about $200 million. Ozment Energy, whose innovative fuel cells
and all the risk—onto partners, like dismisses that as an accounting called Bloom boxes use a cleaner
SolarCity, that minimise its exposure gimmick. “Buying credits would be electrochemical process to transform
by taking full advantage of the federal natural gas into electricity. Today,
government’s generous subsidies 42 Wal-Marts in California have
for investing in alternative energy. Bloom boxes. They save Wal-Mart 20
Wal-Mart has installed 105 WAL-MART HAS percent compared with grid power
megawatts of solar panels—enough to INSTALLED 105 MW and emit around 35 percent less
power about 20,000 houses—on the carbon than large-scale power plants.
roofs of 327 stores and distribution OF SOLAR PANELS Constellation, a division of power-
centres (about six percent of all ON THE ROOFS OF generation giant Exelon, is putting
their locations). That’s enough to 327 STORES AND up an estimated $200 million to
make Wal-Mart the single biggest install 20 megawatts of Bloom boxes,
commercial solar generator in the DISTRIBUTION enough for roughly a quarter of the
country. And it intends to double CENTRES power needed at around 80 Wal-Mart
its number of arrays by 2020. stores. But this kind of financing
It’s all part of a goal that former arrangement won’t work everywhere.
CEO Lee Scott set in 2005 for Wal- That’s because America’s green
Mart to be powered entirely with an added cost item rather than what energy revolution has been built on a
renewable energy. Wal-Mart uses we do, which is lowering costs,” he foundation of subsidies. There’s the
an incredible amount of electricity. says. Instead, Wal-Mart has reduced federal investment tax credit, which
Worldwide power demand is roughly its energy costs per square foot of allows investors to deduct 30 percent
29,000 gigawatt-hours per year. retail floor space by nine percent. of the cost of building these systems.
The US probably accounts for about Wal-Mart has cut costs by doing And in California, there are hundreds
half of that—enough to power about what it does best—using its heft to of millions of taxpayer dollars
1.5 million average homes. Forbes convince its suppliers to risk their available in green rebates and grants.
estimates Wal-Mart’s US electric own capital to get Wal-Mart what The bad news for Wal-Mart and
bill to be around $1 billion per year. it wants. It gives access to its roof the entire green energy industry
It’s not at all clear it’ll meet that space to SolarCity or other installers, is that the federal green energy
goal, even though subsequent CEOs which pay to put up the panels tax credit is set to expire in 2017.
have reiterated it year after year. (at a cost of about $1.2 million for Ozment isn’t worried. After all,
Wal-Mart now gets 26 percent of its the average array). SolarCity then Wal-Mart is accustomed to putting
worldwide power from green sources, sells the power generated to Wal- the hard squeeze on its suppliers.
including wind, solar, fuel cells and Mart under a long-term deal—at a “It’s an opportunity for utilities
hydropower. That’s barely better than price often cheaper than what the to rethink their business model,”
renewables’ overall 13 percent share local electric utility would charge. he says. “There’s no reason there
of US generation. “To make it harder “The value proposition is really can’t be an adjustment.”

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