Flowers Foods: Building an Energy Efficiency Project Pipeline Using Tiered Utility Incentives
As one of the largest producers of packaged bakery foods in the United States, Flowers Foods operates 46 bakeries that make a variety of baked goods for well-known brands such as Dave’s Killer Bread, Nature’s Own, and Wonder. To further the company’s ongoing environmental sustainability efforts, the Flowers team developed a process that considers every operational upgrade project as an energy efficiency opportunity.
Starting with the company’s Batesville, AR, plant, Flower Foods partnered with the local utility provider to leverage tiered incentives to incorporate energy-saving practices in a series of capital projects. From 2016 to 2021, the bakery implemented 13 efficiency projects including steam, compressed air, LED lighting upgrades, waste heat recovery, and variable-frequency drives (VFDs) for exhaust fans.
The Flowers Environment, Health, & Safety (EHS) team partnered with the Engineering team to plan and implement multiple energy and cost savings projects. The Engineering team reviewed the operational upgrade plans and suggested additional measures such as compressed air upgrades, VFDs, and heat recovery. Engaging with the local utility company was essential to targeting, tracking, and prioritizing energy savings projects, in addition to obtaining the necessary incentives to support project funding.
The Batesville bakery EHS team worked closely with the Flowers Engineering team to review planned capital projects with energy savings potential. The first project involved increasing lighting levels to improve visibility throughout the bakery. The lighting vendor provided information on utility incentives and recommended additional energy efficiency measures such as compressed air, variable frequency drives (VFDs), and heat recovery. The incentives greatly increased the payback of the projects and helped the team secure additional capital funds to implement more upgrades. The utility also provided free measurement and verification to quantify project savings, which helped Flowers plan current and future energy efficiency projects and take advantage of additional utility incentives. This helped solidify additional energy efficiency funding commitments from leadership for future projects.
The utility incentive programs available at the Batesville bakery included a tiered approach with higher incentive rates for implementing multiple measures. Flowers took advantage of this to scale up incentives and improve the payback of projects over time. For example (see Figure 1), Flowers may have identified two energy efficiency measures to implement, but due to budget constraints and scheduling conflicts, could only implement one the first year. Then, during year two, they implemented the second measure plus two additional measures. Based on this approach, the incentive rates would be:
· $0.14/kWh for year one (first measure).
· $0.18/kWh for the second, third, and fourth measures in year two (based on four qualifying measures overall).
Figure 1: Energy efficiency incentive rates offered by local utilities.
The site ‘energy champion’ is responsible for measuring and tracking metrics from energy efficiency projects. All projects at the Batesville, AR, plant were tracked based on electricity savings (kWh), natural gas savings (therms), incentive rates ($/kWh or $/therm), incentive amounts, and implementation costs. The utility program team provided measurement and verification support to confirm energy savings over time.
From 2016 to 2021, the Batesville bakery implemented 13 projects with a total energy savings of 13,506 MMBtu and $411,695 in utility incentives, translating to verified utility savings of $231,103 per year. In the first year, the lighting retrofit project reduced electricity usage by 671,743 kWh and received a $100,761 incentive from the local provider. LED lighting is now widely adopted across Flowers, with 30 other bakeries completing LED lighting upgrades since the original Batesville lighting project. With these proven energy and cost savings, Flowers leadership has become increasingly supportive of energy efficiency projects and budgeted additional funding each year. Batesville’s success stories have inspired other Flowers bakeries to request capital for energy projects and investigate local incentive opportunities. This has led to more assessments of equipment upgrades and the incorporation of energy-efficiency practices into overall capital project planning.
As one of the largest producers of packaged bakery foods in the United States, Flowers Foods operates 46 bakeries that make a variety of baked goods for well-known brands such as Dave’s Killer Bread, Nature’s Own, and Wonder.
Funding energy efficiency equipment to be installed alongside capital upgrade projects.
Leveraging utility incentives to build a project pipeline and accrue additional savings through tiered incentive rates.
Over five years, the Batesville, AR, bakery implemented 13 efficiency projects with energy savings of 13,506 MMBtu and received over $400,000 in utility incentives to support these projects.