fmME looks into the energy management sector in the UAE
With a recent Middle East Facility Management Association (MEFMA) report prepared by CREDO suggesting that there’s about $3.5bn worth of energy savings to be achieved in commercial and residential towers across the GCC, there seems to be little doubt that the energy management market in the region is poised for major growth in the near future.
After all, it is no secret that the buildings in the region are largely energy inefficient, and the necessity of turning this situation around is being driven by the rise that is expected in energy costs in the future, as well as a greater emphasis on sustainable development in the Middle East.
The UAE has been one country that has been pushing hard on the energy efficiency agenda, with Dubai especially taking steps to enable an energy performance contracting market in the emirate that will develop energy efficiency projects targeting more than 30,000 of its existing buildings.
Keeping this goal in mind, Dubai’s Regulatory and Supervisory Bureau (RSB) launched an accreditation scheme earlier this year for energy services companies (ESCOs) wanting to be a part of this market, which will see tenders being issued for energy performance contracts for various buildings in Dubai.
In April, MAF Dalkia, one of the region’s leading providers of facilities and energy management solutions, set itself apart from other companies in the sector by becoming the first ESCO in Dubai to be certified under the RSB’s accreditation scheme.
The company followed up that milestone by enhancing its Building Energy Efficiency Services (BEES) in the region with the launch of the Dalkia Energy Savings Centre (DESC), a new tool that will help the company guarantee energy savings in buildings by reducing their overall consumption.
With over 70 years of experience in the building energy management sphere, MAF Dalkia is well placed to be a major player in what is, according to Francisco Silverio Marques, the company’s director of business development and marketing, to become an increasingly important business for the region.
“There is an absolute urge in energy efficiency awareness in the region, motivated by a conjunction of public and private reasons,” Marques says. “On one hand, companies are adopting corporate social responsibility programmes, and reducing their environmental footprint is a priority for them.”
“On the other hand, the governments are also pushing for new policies in energy efficiency, as it represents at the same time a way to make growth more sustainable, but also new business opportunities in the green economy,” he says.
But Marques adds that such policies and regulatory mechanisms have a bigger role to play, given that the energy performance market is still rather new, and so, building owners and landlords may be wary of signing up for such initiatives, despite the prospect of guaranteed energy savings.
“It is important to create confidence in what is still an emerging market,” Marques says. “It is important that the companies that guarantee energy savings are really committed to these savings—they should have the technical abilities to deliver them together with the right legal models to make sure that the guarantee is a real one—for instance, by paying for the difference if the savings are not achieved.”
A dedication to proven results is what Smart4Power, a Dubai-headquartered company that specializes in turnkey efficiency solutions for buildings, believes to be a major factor in distinguishing itself as a premier energy management company in the UAE.
The company, which works with clients to identify, prioritize and act upon opportunities to improve their buildings’ performance, offers comprehensive audits that identify cost-effective, high-ROI opportunities for energy management and follows that up with implementation services to help them achieve just that.
According to Jesus Gutierrez, co-managing director and energy conservation executive, Smart4Power, the demand for the services that his company offers is only set to grow, as the case for energy efficiency is becoming clearer by the day for the region’s businesses.
“Energy efficiency is not only good for the environment, it’s also good for the bottom line,” Gutierrez says. “Energy prices will only continue to rise, as global and regional demand increase and smart governments scale back subsidies on energy costs. Thus, efficiency is a matter of sound business strategy.”
But Gutierrez acknowledges that when it comes to working in the energy management sector of the Middle East, the region comes with its own specific set of challenges.
“We operate within a region that largely lacks the wealth of data on efficiency that would be available in more developed areas like the US and Europe,” he says.
“Consequently, we are gradually building our own benchmark data to pinpoint just how much of a difference efficiency can make in the Middle East. Overall, we have found that feasible investments in efficiency can reduce energy costs by 20-30%.”
“Energy efficiency is in a big transition period in the Middle East,” Gutierrez adds. “It is well documented that the UAE and its GCC neighbors have some of the highest per capita energy and water use levels in the world. This trend toward inefficiency simply cannot continue.”
A key factor that has been helping push forward the need for a reduction in energy use and, as a result, costs has been increasing awareness about the same in the region.
“In my opinion, there is now a real understanding within the Middle East region of the energy gap and the predicted rise in the cost of energy,” says Simon Roopchand, general manager, Emrill Energy.
“For instance, the UAE government is now very active in pushing energy reduction and sustainability,” Roopchand explains.
“In the last two years, awareness has risen massively of increased operational costs within the private sector and the need for a strategic approach from the government for demand side management and diversification in energy. If we do not make material changes in the way we manage energy, the region will not be able to sustain its plan for growth.”
For its part, Emrill has been spearheading a change in the way they approach FM services for a building—the pioneering company recently combined its expertise in technical services and energy optimisation to build an energy driven facility management (EDFM) model for its brand of FM services.
“The EDFM model facilitates the integration of building systems design focusing on energy optimisation solutions whilst transforming delivery of maintenance,” Roopchand explains. “The outcome is an increase in the longevity of assets and full system optimisation to reduce energy consumption.”
“On the other hand, the EDFM method provides a commercial model that allows guaranteed savings over a fixed period of time where we invest in the capital to fulfil the project, relieving the client from any upfront costs,” he adds. “We are paid through the energy savings that are delivered, on a shared saving scheme, in order that the client realises the cost savings immediately.”
While Roopchand is emphatic on encouraging such retrofit solutions for buildings that are already existing in the market, he also notes that developers need to be more attuned to the changes that are happening around them—going forward, they need to design their buildings better.
“If energy was a significant focus when designing a building, then the requirement for energy retrofits would reduce dramatically,” Roopchand says. “Historically, there has been a tendency to focus on reduced construction costs without considering the impact on operational running costs.”
But there is cause to be optimistic about the future, as Roopchand notes that the focus on building energy efficient, sustainable buildings in the UAE has increased dramatically in the last 2-3 years.
Gutierrez agrees, saying, “One interesting development we’re seeing in the shift toward efficiency is coming from FM companies. They now recognize that they can enhance their value proposition by adding efficiency to their more traditional services such as cleaning, security, and maintenance.”
In fact, Gutierrez reveals that Smart4Power had partnered with Emrill’s Mplus, which provides FM services for Dubai’s villa communities, to develop the EcoSAVER programme, which helps residents of such localities save at least 15% on their annual DEWA bill.
Regardless of the type of development, Marques says that the MAF Dalkia formula for energy management—a three-step approach that involves audit, implementation and operation—is the way to go for devising the best energy management procedures.
“One interesting thing about the three step approach is that it allows to go through a process that is completely standardized, to reach a tailor made solution,” Marques explains. “The audit allows to identify not only what are the possible solutions, but also to select which of them are the most relevant to achieve the right balance between savings, investment and payback.”
“Then the implementation can be integrated into any specific procedures on the site so that the customer’s process can continue uninterruptedly,” he continues.
“Finally the monitoring and operations phase can also contemplate other technical maintenance operations, so as to simplify the technical management of the building, and the complete reporting can there again be customized to the formats defined by the customer or his shareholders.”
Marques says that now is the time to launch this new market on energy efficiency. “And if we start now, we will put all odds on our side to achieve very ambitious targets,” he concludes.