Energy efficiency is on everyone’s agenda these days, for sustainability goals and economic reasons alike. The recently concluded Conference of Parties 21 (COP21) Paris Summit did help raise awareness on the importance of adopting energy efficiency methods. Even in the Middle East, there has been a significant increase in the number of developers and building owners seeking energy-efficient property management solutions. Many in the market believe that there has been a transition in the way companies are viewing energy efficiency in the Middle East. In the UAE, a target to reduce energy costs by 30 percent by the year 2030 was agreed upon by the Government. In line with this strategic goal to make the Jebel Ali Free Zone (Jafza) the most energy efficient business hub, Economic Zones World (EZW) has signed a MoU with DEWA’s Etihad ESCO to retrofit its existing buildings and facilities to make them more energy efficient. Jafza has always been in the forefront of implementing the Government’s green initiatives to promote and preserve the sustainable ecosystem.
Regional Director, Urbanise
This sort of heightened awareness about the global carbon footprint and lowering emissions means that companies are actively looking to reduce their use of carbon-based energy products. “With energy demand continuing to grow, Governments across the globe also have to review energy security and infrastructure. It’s well recognized that good energy management is simply good business. Rather than building new and expensive infrastructure, it’s far smarter to manage consumption,” says Richard Jowsey, Regional Director, Urbanise.
Managing Director, EEG
While Ronald Diab, Managing Director, EEG, agrees with the fact that awareness has increased in the Middle East, he feels that it is still not on par with the international levels. “Awareness of climate change, green initiatives and energy efficiency is at a peak globally – and here in the Middle East, awareness is certainly generally increasing, but is still not at international levels. Clearly UAE has been leading the way with initiatives such as Estidama and Masdar in Abu Dhabi, the Emirates Green Building Council with all its initiatives, and MEFMA and the ESCOs’ retrofitting schemes through the Etihad ESCO in Dubai,” adds Diab.
Mohammed E. Bundakji,
Group MD, Initial Saudi
Group, Al-Bundakji Holdings
The situation is a little different in few other parts of the Middle East. Giving an insight into the Kingdom of Saudi Arabia, Mohammed E. Bundakji, Group Managing Director, Initial Saudi Group, Al-Bundakji Holdings, says that while it might be viewed that the ME is witnessing a transition in the way companies view energy efficiency, it can also be argued that it is marginal comparing with other western markets. “Additionally, Saudi Arabia, in particular, could be said to experience the least transition in this regard as a result of low public energy costs, government subsidies and oil, even while oil prices are at its lowest that places the Kingdom in a unique position. Moreover, most energy efficiency initiatives undertaken by companies in Saudi are driven by a handful of projects that require smart facilities, LEED certifications...etc,” adds Bundakji.
Everyone knows that energy efficiency results in saving energy, but evidence points to an array of wider benefits. The term “multiple benefits” has emerged to describe the additional value that emerges with any energy performance improvement. The benefits that occur onsite can be especially meaningful to manufacturing, commercial, and institutional facilities. Energy efficiency’s positive ripple effects include - increased productivity and product quality, system reliability, and more. The key factor that has helped push forward the need for reduction in energy use is the financial impact it has had on companies. “Generally, companies will push forward their energy usage through an energy management programme primarily if it helps improve their bottom line. The financial impact is, therefore, the leading factor, followed by the sustainability or the ‘do good’ factor,” says Diab. But there are more benefits than just the financial and environmental impact. Removal of Government subsidies thereby targeting money towards alternative needs, reduction in pollution, reduction in greenhouse gases, the increase in rentable/leasing revenue of office space are just some of the multiple benefits of energy conservation.
Technology too has contributed to a large extent. Says Jowsey, “With a better understanding of how buildings are used, solutions can now be designed to ensure it operates in what we refer to ‘the sweet zone’ – i.e. the most advantageous loads to optimize the plant. This not only prolongs the life of equipment but also minimizes waste using VFD’s (Variable Frequency Drives) and smaller units. So rather than running one large piece of plant, we can stage it based on the load required at that point in time. This can typically offer a 30% benefit in energy savings. In addition, a better understanding of air flows - typically known as the ‘Bauer Optimisation’ - can be used to easily add a further 20% to 30% cost saving.”
Investing in Energy
The question is if companies are now more open towards investing in energy conservation? And the answer is yes. A recent report in a leading daily stated that Dubai has one of the region’s more ambitious plans, with the Dubai Supreme Council of Energy expecting nearly one quarter - 30,000 of Dubai’s 130,000 buildings - to be energy-efficient by 2030, at a cost of $820 million. Jowsey says that investing in energy has now become the norm, both commercially and morally. “In this region, there is a leadership emphasis to reduce consumption. Having visibility around energy consumption, planning a ‘spend to save’ campaign supported by education plus the use of new technologies will significantly reduce energy consumption. Business owners are recognizing that energy conservation is critical and that it is not only the smart thing to do (increasing profits), but also the right thing to do (limiting environmental impact),” he adds.
Director of Operations, Mace Macro
Nigel Davies, Director of Operations, Mace Macro, explains that the private sector is fast becoming involved with many companies and offering to upgrade their existing plant and equipment at no cost, based upon a share of the utility savings over a period of 5-7 years. “This really is a win-win situation as clients pay nothing to get a much-improved system and only share the actual savings amount from their respective utility bills,” adds Davies. According to Diab, the trend of investing in energy is a very positive one. “There are very significant savings that can be made as a result of energy efficiency measures – some with little or no cost – and once companies can see the potential impact on the bottom line, then they become much more open to it,” says Diab, who goes on to add that EEG has seen an increasing number of companies coming to them, looking for energy efficiency audits and implementation programmes -particularly in the hospitality sector globally, where EEG has become a market leader.
In the Kingdom, however, has had a mixed reaction towards energy conservation. “Although most companies in Saudi may not be particularly interested in conservation of energy, the Government of Saudi Arabia has taken its own steps in exploring such matters and has gone so far to establishing King Abdullah University of Science And Technology (KAUST) where programs and research has and is continuously being explored in relation to energy efficiency, conservation and alternate energy sources,” explains Bundakji.
While awareness has increased, there are still many challenges faced in the market. According to Diab, there are three main points to tackle in energy management: regulation, removal of subsidies from electrical tariffs, and financing. Market Regulation, says Diab, is necessary to ensure that the levels of services provided by ESCOs and energy saving companies are following international standards. “With regard to electrical subsidies, companies generally are not willing to invest in energy efficiency unless it impacts significantly on their bottom line and this is a major barrier in a large number of countries in the Middle East. Finally, the financing mechanism is essential as, in many cases, energy management is linked to new investments in upgrades, controls, retrofits etc which would require funding. Banks and financial institutions have the potential to take the lead here, with appropriate specialised financial products tailored for EE and RE projects,” he explains. Jowsey, on the other hand, points out a major challenge is in accepting the fact that the engineering of a building has a major impact on the volume of energy it needs to operate day-to-day. “While a building might be cost efficient to build, it may well then cost a fortune to run and maintain. There are EPC (Energy Performance Contracting) schemes in place and this drives the behaviors of service suppliers. There are also schemes where the engineering (major plant and equipment) say for HVAC can be leased and the delta of the financial benefits shared over time. This engages both EPC suppliers and the building owners - as there are huge benefits to be shared,” says Jowsey.
He goes on to add, “During the design phase, there is also a margin added to cover errors. When this cost is multiplied across all approvals, it can result in the plant being over designed by up to 100 percent to cover the risk. This is expensive in terms of capital outlay, operating and maintenance costs, space and ultimately design.”
Overall the future for this market has been positive and not only in the UAE. Bundakji says that if the Government intervenes and instills standards that require facilities to be more energy efficient, maintain low carbon footprints and penalize those who don’t comply, one can predict a little growth in the Kingdom as well. “It can be safely forecasted that the GCC or ME countries would be expected to experience larger developments in regards to energy management solution integration and adopted by companies in the near future,” he adds. Given that Government bodies are talking about energy targets by the year 2025 and 2030 the outlook for this market sector, says Davies, is extremely buoyant. “And if the oil prices remain low for at least the next two years, there is a need to review the potential for savings at all levels,” he adds.
Diab, on the other hand, feels that the Middle East will see a marked shift of companies considering environmental issues as the norm and adopting as many energy savings measures as possible. “The recent, COP21 Paris summit has helped by increasing the general awareness of issues, and given that energy efficiency is the largest contributor to reducing CO2 emissions, then things for our industry look good,” he concludes on a positive note.
To showcase how by taking just simple measures one can save a lot of energy and save a lot of money, Concordia, an intergrated facilities management in Dubai, shares a case study on the Jumeirah Lake Towers Master Community during the recently concluded International Cleaning and Hygiene Conference.
Jumeirah Lake Towers Master Community
• 24 Clusters have 3 parking levels per Cluster
• + 35,000 Parking Spaces = High DEWA Bills
• Average DEWA Bill: AED 25,495 per month
• Reduce Energy Consumption
• To provide lower DEWA Bills for the Community
• Reduce Carbon Emissions
Phase 1 – Lighting
• Complete Review of the lighting design.
• LUX Level Matrix was established for each parking level.
Aim: To achieve a minimum standby LUX level at any One point of 20 LUX (International Standard for car park lighting)
• Installed motion sensors to trigger additional lighting LUX levels to achieve a minimum level of 50 LUX.
• Implemented simple identification of Lighting Plan.
Phase 2 - HVAC
• All 10 Fans were working 24/7 at low speed.
• Monitored carbon monoxide levels – results showed low levels.
• Began reducing number of fans operating.
• Since 2010 only 4 Fans are working at low speed and strict monitoring of carbon monoxide continues (max reading of 6 ppm / UAE max for UAE is 50 ppm).
• In case of Fire: Modification of Fire Alarm, Control Panel (FACP) has been carried out – for automatic activation of fans at high speed.
• Average DEWA Consumption and Cost Pre-initiative per cluster: AED 25,495
• Savings since 2010 for Energy Consumption: AED 18,500,000 DEWA only
• Average DEWA Consumption and Cost Post-initiative per cluster: AED 11,000
• Savings since 2010 for Carbon Emissions: + 22,900 tonnes CO2 or 22,907, 400Kg
• Minimal maintenance costs on Lighting System
• No spend on Bulbs or Fittings in 6 years
• Extended Life expectancy of HVAC Assets
• Reduced spares and on going maintenance of the HVAC system