Woolies is energy efficient

Yesterday BusinessDay posted this article titled Woolies energy down 38% since 2004. Here is an extract which summarises the crux of the matter.


"WOOLWORTHS has saved R270m during the past four years by installing energy-saving measures in its stores and reducing carbon emissions. An update on the group's savings since it started its green initiatives four years ago showed cost recovery for water and electricity was R16.5m over the past two years alone. Woolworths had saved R222m over the past four years by making its buildings energy-efficient, and R2m had been saved through water efficiency programmes."


What is even more impressive is that over that period, since 2004, Woolworths have increased their sales volume 4 fold. From R10 billion to R40 billion. That is a whole lot more products to keep cool and fresh, transport and manufacture. Not to mention the new stores opened in that period.


The purpose of this article is not to blow the Woolies horn. It's certainly great to know this as a shareholder but for me it just shows you that there are alternatives out there and with the right incentives those alternatives will be pursued. Especially in light of the potential 13% electricity increases we could be experiencing.


Since 2003 we have seen well above inflation tariff increases from Eskom. Yes, comparatively South Africa has experienced cheap electricity in the past but one cannot help but feel that a large reason for these hefty increases is government/management inefficiency. We have over paid and under delivered. We have seen it first hand with Medupi.


So what has business done? They have found alternatives which of course benefits the consumer (cheaper prices), the environment and the electricity consumer (less pressure on electricity supply.)


Michael referred me to an interesting piece titled Solar and Wind Plunging Below Fossil Fuel Prices. Basically because of technological innovations, renewables are becoming more and more viable. Companies, with profit incentives, are making the world a better place. Michael also alluded to a piece a few days ago which said that the US are using less energy today then they were in 2007.


This is capitalism at its best. Even if Elon Musk says he is now doing what he is doing for the environment. I believe him but it's easy to say so if you are worth billions of Dollars. The profit driven incentives for the businesses he runs also allow for the capital to make them so great.


I have harped on this topic before. I dug deep into my archives and found a piece written in 2011 when the global population had just hit 7 billion. I referred to one of my favourite pieces from a blog titled The Rational Optimist. It is titled: Room for all. Here is my favourite extract:


"Not only is such a huge population going to prove indefinitely "sustainable"; it is actually likely that the ecological impact of nine billion in 2050 will be lighter, not heavier: there will be less pollution and more space left over for nature than there is today.


Consider three startling facts. The world population quadrupled in the 20th century, but the calories available per person went up, not down. The world population doubled in the second half of the century, but the total forest area on the planet went up slightly, not down. The world population increased by a billion in the last 13 years, but the number living in absolute poverty (less than a dollar a day, adjusted for inflation) fell by around a third."


I do not know where we will be in the next 500 years, but what I do firmly believe is that in my lifetime (I am 27) and the next, our lives will get exceptionally better as we become more efficient and the knock on effect of improving technologies goes from strength to strength.