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May 09, 2022
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1 big thing: Automation increases warehouse power use

Data: Newmark; Chart: Thomas Oide/Axios

The energy transition is already off and running when it comes to commercial warehouses, according to a report from real estate company Newmark, Megan writes.

Why it matters: Automation and smart devices are contributing to warehouses' increased power use, just as many sites are transitioning away from electricity from fossil fuels.

State of play: Commercial warehouses are both labor- and capital-intensive, pushing major e-commerce and logistics companies like Amazon to adopt robots, smart meters and other technologies in the name of efficiency and improved margins.

Zoom in: The Newmark report found warehouse energy consumption is forecast to grow more than twice as fast as any other end-use sector from 2020 to 2050.

  • Renewable energy consumption in commercial industrial spaces is forecast to nearly double by 2050.
  • EVs for delivery and in-unit use will also require more power as adoption accelerates. Charging a single electric truck on-site requires at least an additional 20 kilowatts of power, the report estimates.
  • Newmark also reports that one-third of all industrial inventory is more than 50 years old, and 70% was constructed before 2000, meaning many existing warehouses are unable to support the increased power demands from new technology.
  • Texas is the most attractively priced state for heavy power users due to its developer-friendly environment for new warehouse construction and reliable power generation.

Yes, but: Though Texas ranks high in the report, recent power grid failures due to extreme weather leave its overall reliability an open question as those weather events become more common due to human-caused climate change.

  • Company stakeholders may have to diversify energy producers to ensure continuous energy delivery meets the increased demand.

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