If they act now, retailers can take steps to reduce the impact when winter triad charges arrive

Winter is coming. That means UK retailers are facing the grim prospect of energy surge pricing, which will blow their operating costs through the roof. 

On top of electricity prices soaring to record highs, retailers will be hit particularly hard by the so-called triad charges. These are massive spikes in the cost of electricity. By massive, I mean power costs shooting up to 40x the regular price, reaching £60 per kWh.

Triads only last a few hours but make an enormous dent in the bottom line for any business that can’t afford to shut off the power.

They kick in late in the day on cold, gloomy weekday afternoons – when the National Grid just can’t cope with the combined surge of domestic and business demand for power. Initially introduced to persuade heavy electricity users – like companies operating blast furnaces, for example – to shut down for a few hours to ease demand on the grid, the knock-on effect for retailers is devastating.

Retailers can’t just turn off the power. That’s especially true in the grocery trade, where chillers must stay in operation so perishable goods remain within required temperature ranges – regardless of the cost of electricity.

Refrigeration already makes up 30%-50% of a grocer’s overheads. Surge pricing is a punishing and unwelcome extra cost for retailers already operating in a sector with thin margins.

If they act now, retailers can take steps to reduce the impact and weather the storm when the triads arrive. One short-term measure is to switch off cold cabinets, timed to coincide with the start of triad charging. Done manually, this is a hit-and-miss affair but can easily be automated and regulated.

Power supplies to multiple chillers – even across a nationwide network of stores – can be centrally managed via the Internet of Things. This provides retailers with peace of mind – and, in the light of the enormous burden of surge pricing, a rapid return on investment.

Retailers can also take a more strategic, longer-term approach to reducing their electricity use with simple steps such as overnight switch-offs for cabinets containing non-perishable cold drinks and in-store heating.

At Accruent, we have worked with one of the UK’s biggest supermarket chains to implement power savings that have already reduced power consumption by 1% without affecting the customer experience. This is just the start of a series of planned reductions in power use to help the supermarket become carbon neutral.

Some measures are high-tech, such as centralised monitoring and control of chiller and freezer cabinets to ensure they are always running at optimal temperature.

And some are incredibly low-tech – such as the “last person to leave the building” switch. This turns off lights, and cuts heating and ventilation for unoccupied warehouse, retail and office space.

Every journey begins with small first steps. And with the prospect of the triads looming over UK retailers once again, it’s time to prevent another winter of discontent by acting now to start identifying and implementing power-saving measures – ensuring retailers benefit from longer-term demand control for expensive commodities like electricity.