Energy and water, our two most precious sources of life and prosperity, are highly interdependent. Large amounts of water are necessary to produce energy, and large amounts of energy are necessary to produce clean water. This inter-relationship has become even more important as the world’s demand for energy and water surges and as our livelihoods depends increasingly upon them. In today’s world there is a lot of imbalance in these natural resources. Global figures show that in many regions of the world, and particularly so in the Middle East, energy consumption is growing faster than energy production. This means that at some stage the demand will overgrow the production capacity with huge environmental, financial and social impacts. And by applying various methods it is possible to control and conserve the resources.
The need to conserve water and energy is growing at an alarming rate. With ‘sustainability’ being one of the sub-themes at the Dubai Expo 2020 it only goes to show that the market is now slowly opening up to change in order to make that difference by conserving water and energy. ‘FM Today’ takes a closer look at the energy and water conservation sector and the importance given to sustainable development in the Middle East.
Energy Conservation Executive,
“Electricity and water conservation are critical to present and future generations of the world. We’re talking about resources that are at the foundation of modern civilization. We must use them wisely to ensure we sustain a world worth living in. Electricity and water conservation are especially important in the Middle East, a region that must balance abundant fossil fuel, scarce water and an escalating population and standard of living,” says Adam Weber, Energy Conservation Executive, Smart4Power, an energy management company oriented to provide and implement energy saving solutions to clients.
While many recognize the importance of conservation in today’s world, they also agree that it is a long term plan which requires immense dedication to reach desired goals. At first it is important to understand the average consumption of water and electricity in the private and public sector.
Because of its climate and high standard of living, the UAE has one of the highest per capita rates of energy and water consumption in the world. And according to Dubai Municipality, buildings are responsible for 70 per cent of the energy consumed in Dubai. Of this, 70 per cent goes to air conditioning.
Tamara Withers, Project Manager, Corporate Sustainability, Emirates Wildlife Society-WWF, says that it is important to realize that energy and water conservation is going to require effort in terms of importance in government regulations and policies as well as action from the private sector itself. “The private sector really plays an important role here; they contribute 30 per cent to the UAE’s Ecological Footprints. They also have the opportunity to influence their own employees in terms of how they use energy and water in the workplace, and also at home. Furthermore, businesses can influence their customers as well as other business partners. So the role of private sector is quite significant not only in the immediate conservation but the opportunity to influence others to reduce theirs,” she adds.
Energy and water conservation is therefore a priority in many regions, not only because solutions are more accessible, but also because it makes more sense to first reduce the need then size renewable energy solutions for this reduced need rather than doing it the other way round and risk oversizing them.
Many energy saving companies have been working on various means and ways to control and conserve water and energy in buildings. MAF Dalkia, a regional leader in providing Facilities and Energy Management solutions, was the first company to be accredited the ESCO – Energy Savings Company – certification earlier this year by Dubai’s Regulatory and Supervisory Bureau for Electricity and Water. “Since the beginning our approach has been to audit the building or at least the technical facilities, identify roadmaps for improvement, implement them and take a commitment on the result, achieved through the operation and maintenance of the facilities. What has changed today is that with more accessible information technologies we are able to get much more energy data from the sites, analyse them in real time and have our site-based technicians take the right actions to permanently improve the energy efficiency of the building. Also, our almost 80 years of experience in managing energy in the buildings have helped us build specific algorithms to very quickly detect any drift and make sure we always remain on track with our energy savings commitments,”
Francisco Silverio Marques,
Director – Business Development
and Marketing, MAF Dalkia
explains Francisco Silverio Marques, Director – Business Development and Marketing, MAF Dalkia. And using their experience Francisco reveals that in 2013 Dalkia has been able to save 14.2 TWh for their customers worldwide, which he says, “represents the average annual electricity consumption of nearly 1.3 million UAE inhabitants.”
Another method widely used among many is retrofitting of buildings. This not only helps one conserve water and energy but also allows the company to save money as well. One of the main objective of Etihad ESCO’s, Dubai’s official Super ESCO, has been to improve the efficiency in buildings by setting up energy efficiency retrofit projects. And if retrofitted properly the company will see savings in the long run. “As comprehensive energy efficiency projects can be complex to setup, Etihad ESCO acts as a turnkey service to manage all activities involved in the process. In addition, we arrange complete project financing, allowing companies to retain existing capital. As part of our scope of services, Etihad ESCO commences by evaluating existing building performance followed by a competitive selection process, and once the best ESCO contractor has been selected, we manage the project and guarantee savings. Typical savings on energy costs that we can obtain in Dubai buildings range from 20 per cent to 50 per cent. This largely depends on the age of the equipment, state of the buildings and ways the maintenance was performed over the years,” explains Stephane Le Gentil, CEO, Etihad ESCO.
Many often claim that retrofitting can be an expensive affair, Stephane feels otherwise. “Green Financing is a relatively new concept in the region, whereby global banks and major financial institutions prove hesitant about committing to longstanding infrastructural loans due to recent regulatory changes and risk-averse policies. Etihad ESCO operates on a mitigated-risk basis for projects by issuing a long-term performance guarantee to ensure sustainable savings. We work alongside major financial institutions to create tailored payment plans ranging between three and 10 years to further drive the importance of upgrading existing infrastructure for energy-efficient living,” he says.
Stephane Le Gentil, C
EO, Etihad ESCO
Stephane goes on to add, “Retrofit costs are not necessarily a detrimental factor in the decision, as it is part of Etihad ESCO’s mandate to arrange project finance. Our objective is to ensure that end-users will receive payback within three to six years, meaning that the cost of the retrofit project will be recovered in three to six years by the energy savings generated. End-users do not often realize that abstaining from retrofit projects will yield higher costs in the long run, given that the wasted energy is billed and ultimately paid by end-users on a monthly basis.”
On their part, Emirates Wildlife Society-WWF initiated a programme called the ‘Heroes of UAE’. This is a national programme that focuses on energy and water conservation across all sectors of society. The campaign was launched in 2009 in partnership with the Environment Agency-Abu Dhabi to help address the country’s high per capita Ecological Footprints. “There were four areas of programme: energy, water, schools and private sector,” explains Tamara.
It was in 2010 when EWS-WWF launched the private sector portion of the campaign and to inspire organisations in the UAE to reduce energy and water consumption in their offices. “The long term goal here was to actually identify and address the barriers to reducing energy and water consumption in the private sector. In the short term what we did was to have two things. One, we developed a local tool kit for businesses here to use. There’s a free business tool kit available online which includes 12 tools and it’s a mix of awareness and also tools for implementers to help reduce step-by-step in conserving water and energy. For example – to engage the staff we have a lunch and learn so that the staff can understand the issue and how they can participate,” she adds.
Most recently, Dubai Electricity and Water Authority (DEWA) has extended its annual campaign ‘Set your AC to 24°C’ to raise awareness amongst commercial consumers about the importance of rationalising consumption to preserve natural resources. The campaign complements DEWA’s efforts to support environmental sustainability in Dubai.
The ‘Set your AC to 24°C’ campaign encourages consumers to adopt environmentally-friendly lifestyles at their homes and workplaces by setting their air conditioning to 24°C, which is the optimal temperature for the human body. Setting the air conditioning thermostat to 24°C also helps to keep the environment by reducing power consumption and also carbon dioxide emissions, which is also known as the Carbon Footprint.
This move enables commercial consumers to achieve sustainable financial savings, especially as air conditioning consumes a large percentage of energy in commercial properties. The campaign enables users to support DEWA’s efforts to promote environmental awareness and reduce carbon dioxide emissions to protect the environment and support the sustainable development of Dubai.
“DEWA consistently organises awareness campaigns and initiatives to promote a culture of conservation and minimise the excessive use of natural resources. This enables us to sustain our natural resources, for generations to come. These efforts are in line with the Green Economy for Sustainable Development initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and the Dubai Integrated Energy Strategy 2030 to reduce energy demand by 30 per cent in 2030, and in accordance with DEWA’s strategy for sustainable development,” says HE Saeed Mohammed Al Tayer, MD & CEO of DEWA.
“DEWA’s awareness campaigns have achieved remarkable results. Between 2009 and 2013, we managed to reduce electricity consumption to about 1,012 GW/h of electricity, and 4.9 billion gallons of water, eliminating the release of 466,000 tons of carbon dioxide emissions. This helped save about AED 622 million,” adds Al Tayer.
While such methods and initiatives have been successful in conserving energy and water, companies also admit that getting people to make that change towards the greener path is not an easy one. There are many misconceptions and challenges that companies face. One of the effects that tend to be underestimated, on a general level, is the ‘bouncing effect’. “It has been observed in many regions that when deep energy renovation programs are put in place the final energy savings are below the targets, as people after a refurbishment will tend to upgrade their comfort, thus increasing their energy consumption, the way you may drive a car faster when you know the engine is more efficient. In order to avoid this, it is very important during the initial audit to take into account the comfort level in the buildings, and what is expected from the end-users, and then once the actions are implemented to educate them and accompany them to reach the targets,” says Francisco.
Limited awareness is also a huge challenge that leads to misconceptions about conservation of energy and water. This in turn leads to lack of trust in the ESCO model, even if it is technically and financially viable, hindering the growth of UAE ESCO market. “This is why the Super ESCO model is a necessary tool towards accelerating the development of a professional and viable ESCO market, demonstrable through successful existing projects, which, in turn, will ultimately help achieve the demand reduction targets set out in the Dubai Integrated Energy Strategy 2030,” adds Stephane.
Another big misconception has to do with the payback period. “Just a few weeks ago we had a client come to us asking to find ways to save them at least AED 500,000 with a payback period of a year or less. Not even the interest rates of credit cards offer that kind of ROI,” says Adam and adds, “That being said, not many clients are aware that they can diffuse the upfront investment of energy conservation measures with a tool called energy performance contracting (EPC), which we offer at Smart4Power. Through an EPC, we guarantee a certain level of savings for installing specified improvements or we pay the difference to the client. The client can then use this contractual agreement to secure financing for the project. This kind of arrangement is gaining a lot of traction in Dubai, especially since the government created Etihad ESCO, a subsidiary of DEWA, to facilitate a market for EPCs.”
A key player when it comes to conservation is the FM manager. These individuals are the ones who have their finger to the pulse of the health of the building they oversee. They are also in the best position to prioritize energy and water saving improvements. Francisco feels that the rising need for energy efficiency is having a huge impact on the FM market’s evolution. “In the past few years, we have observed in many markets a trend to separate Soft Services from Hard Services, combining Hard Services with Energy Management. We think this is a move in the right direction, as the objectives, the skills, and even the regulation are getting more and more different between hard and soft, and on the other hand we believe it is only possible to guarantee strong energy savings if you are in charge of maintaining and operating the equipment,” he adds.
Many believe that the water and energy scenario in the UAE has changed dramatically over the past few years, with several actions being put in place, such as the Powerwise and Waterwise programs in Abu Dhabi, or the creation of Etihad ESCO in Dubai and launching of energy performance contracts. With the ambitious targets set by the government in terms of energy and water efficiency, a whole new market is being created. Etihad ESCO believes that the region is witnessing a new era which shifts away from energy-consuming infrastructure, to energy-efficient buildings. “This comes in order to achieve long-term, sustainable energy efficiency in line with the objectives of the Dubai Integrated Energy Strategy 2030 of reducing energy demand by 30 per cent in that same year. With regards to conservation, the scenario is set to shift dramatically as the country takes steps towards more effective conservation and energy-efficiency measures,” wraps up Stephane.