Energy is undergoing a one-in-a-lifetime transition as power generation decentralizes and demand for electricity grows. Fueled by the global trends of digitization and decarbonization, optimizing energy usage has become essential, both for consumers and businesses. Buildings presently account for approximately 40% of the world’s energy consumption, and that figure is on the rise. The commercial and industrial sector is responsible for two-thirds of the world’s electricity demand. Where and how companies source their electricity will be key to the world’s pursuit of a more sustainable future.
In the United Arab Emirates, there are clearly specified targets that support sustainable development. These include Dubai’s goal of reducing energy and water consumption by 30% and increasing solar energy’s overall contribution to energy generation to 25% – both by 2030. Dubai also has an ambitious Clean Energy Strategy which includes a 75% target for clean energy generation by 2050. On a national level, the picture is similar – the UAE’s green targets include 50% clean energy in the total energy mix by 2050.
Given the financial and ethical incentives to reduce and optimize energy usage in our buildings, the first question businesses need to ask themselves is where do they start when it comes to making their buildings more energy efficient?
Replacing Brown Energy with Green
While the sustainability benefits are undeniable, and the financial returns positive over the long term, enterprises are challenged to find technologies that will deliver a higher return on investment, a task complicated by the fact that there is no one-size-fits-all solution. In the building industry, there’s an enormous opportunity to save both money and reduce environmental impact — with the right mix of renewable sources and forward-thinking policies and technologies.
Today’s energy and sustainability managers need innovative ways to add renewables to their energy portfolio that work with a mix of owned and leased buildings. The maturing renewable market has yielded new strategies that offer cost savings and long-term benefits. These strategies require a complex blend of technology, financing options, vendors and partners.
Since many facilities are not suited for on-site generation (it’s not possible to put solar panels on every office and building, especially if they are leased spaces), sustainability managers can still access the potential savings of switching to renewables by sourcing renewables indirectly through a passive approach. A company can purchase attribute certificates of renewable energy, such as renewable energy certificates (RECs), that are “unbundled” from its electricity provider. The other option that companies are turning to is Power Purchase Agreements (PPAs), which enables them to enter into a contract with an independent power producer, a utility or a financial services provider which commits the company to purchasing a specific amount of renewable electricity at a pre-determined price for a set period of time.
These types of agreements are becoming commonplace across many markets, and they’re gaining traction in the Gulf. Last year, the Dubai Electricity and Water Authority (DEWA) signed an agreement with Unilever to sell International Renewable Energy Certificates to the company. The agreement, which is part of Unilever Middle East's strategy to be carbon-neutral in all its operations by 2030, was widely reported at the time as one of the first by a global corporation in the UAE. Such deals are going to become increasingly common.
The Role of Retrofitting in Energy Management
Organizations can also take an active approach to reducing and optimizing their energy usage. Given that half of the world’s current buildings will still be in use in 2050, the most sensible route for many firms to take to reduce power usage is retrofitting their existing offices. Studies have shown that up to 75% of the cost of a building over its lifetime is operating expenses, with energy consumption a big chunk of that. A retrofit can help companies enhance the experience and save money – many can see a return on investment in just two to three years while the benefits continue long after breaking even.
A retrofit doesn’t need to be complex. Facilities management teams can start with the basics: step one is to get visibility by installing meters and sensors, and step two the control devices, valves and actuators. Control devices can be small and operate behind the scenes, but delivering the needed impact and are key to the success of a building’s retrofit. Without them, you would have good visibility on where you have inefficiencies, but lack the ability to do anything with that information.
One simple example of this is power meters, which can be at a breaker by breaker level. In a small office environment, you would typically have 10 to 20 breakers, and by monitoring the consumption of each, or at least the critical ones such as the HVAC (Heating, Ventilation, and Air Conditioning), Server Room, etc. you would have great visibility on where your spend is going. You can then best control energy usage effectively. Power meters are the first step to finding problem areas and fixing them to reduce energy consumption and overall costs. The more you know about what is using power and when it is using power, the easier it is to take action that will help you save energy and money.
Increasingly, these devices come in small form factors and transit data wirelessly, which allow for installation in existing electrical panels with minimal disruption, saving both expense and time. New technologies allow for devices to support a number of different communication protocols, meaning that a single power meter can be used for several retrofit scenarios. This cuts down on inventory and labor costs and adds to the savings. Today’s technology can magnify the benefits of any retrofit, making upgrades less costly and easier.
If we are serious about helping create a greener future for all, we have to start with our buildings. Firms will not only be able to save on costs, they’ll also be able to up their building’s operational efficiency. Most importantly for all of us, businesses be able to play their part in fighting climate change and co-creating a sustainable future.
About the author: Marwan Zeidan is the Real Estate and Healthcare Segment Director, Middle East and Africa at Schneider Electric.