If energy was included as an ingredient in frozen food, it would be one of the first items listed. That is because it takes a lot of energy to produce, store, and ship frozen food. Low-temperature cold storage has the highest energy demand of any industrial category per cubic foot. Today, the electricity landscape continues to change, and these changes are leading to new opportunities for food processors and distributors with high energy demands. Opportunities include not only reducing energy costs but also generating multiple revenue streams utilizing new assets such as energy storage and efficiency technologies designed specifically for frozen food applications.
There are several factors in the market that are creating these opportunities. First, retail energy is not the monopoly it has been in the past. Many markets are now deregulated allowing more competition and more energy purchasing choices. In the US and Canada over 32 states or provinces have natural gas supplier choices and 17 have electricity supplier options. Second, energy demand is growing rapidly across our aging infrastructure causing capacity constraints. Third, daily energy demand patterns are shifting more frequently and more dramatically from month to month and season to season than they have in the past. This is due to more frequent extreme-weather events, the growing adoption of electric vehicles, and the rapid addition of intermittent renewable energy sources (wind and solar) to the electrical grid. All these factors result in expensive challenges for power providers and an increased value for every kilowatt produced (or reduced).
To avoid building costly generation units, utilities have responded by increasing demand charges (peak power costs - $/kW), increasing time-of-use rates ($/kWh during specified hours), and incentivizing adoption of new technologies that help them reduce energy usage during peak periods (e.g. energy efficiency and energy storage technologies). One technology that has been tested, approved and incentivized by numerous utilities is Viking Cold’s Thermal Energy Storage (TES). These TES systems are designed specifically for the needs of frozen food processors and distributors and provide both energy storage (to avoid demand and time-of-use charges) and efficiency (to reduce total energy consumed). Facilities with TES systems are able to maintain temperature requirements while cycling off refrigeration systems for up to 13 hours per day without risking food quality or shelf life.
A recent utility-sponsored project in Massachusetts installed eight TES systems in frozen food storage freezers owned by the world’s largest third-party logistics provider, the world’s largest foodservice distributor, multiple food processors and the local food bank ranging in size from 2,000 square feet up to 157,000 square feet. This utility program was focused on reducing energy demand during a targeted four-hour demand window. TES was able to meet the program’s energy reduction goals while maintaining temperature requirements in all participating freezers.
Many other utilities and power providers also have technology incentive programs, and it is possible to participate in multiple programs that simultaneously pay incentives. Programs types include permanent load shed, targeted load shed, demand response, energy efficiency, solar plus storage, capacity programs, among others. Viking Cold’s TES technology is flexible enough to deliver multiple solutions that qualify for participation in all of these program types.
With enabling technologies like TES, food companies can think more broadly about how they purchase power across the organization. The flexibility TES brings to the freezers means the broader corporate-wide energy strategy can include new tactics such as aggregating load across multiple facilities, lowering the risk of index pricing, participating in retail energy supply exchanges, joining multiple utility-sponsored demand management programs, and more.
Listen to an International Foodservice Distributors Association (IFDA) sponsored webinar discussing technologies that can transform energy costs into revenue. Hear in greater detail how utility funding and participation in technology-enabled demand management programs can be part of your corporate energy strategy to generate revenue and avoid costs from one of frozen food’s most expensive ingredients.