Masdar's new ventures highlight the future of building sustainability
Abu Dhabi giant's energy services director explains why Masdar is entering the energy performance contracting sector
In this exclusive piece for Construction Week, Khaled Ballaith, director of energy services at Abu Dhabi sustainability giant, Masdar, explains how retrofitting can boost resource efficiency in the UAE and the wider region – and why Masdar is expanding into the energy performance contracting sector.
The recent report by the UN Intergovernmental Panel on Climate Change (IPCC) on the drastic effects of global warming above 1.5°C has prompted a passionate debate about the far-reaching action needed. While the report’s findings are undoubtedly extremely serious and the challenges involved immense, one important step can be taken relatively easily.
Buildings are hungry consumers of energy and resources. In fact, buildings in the Middle East are estimated to consume up to 80% of all the electricity we generate. And the problem is by no means confined to this region. According to the International Renewable Energy Agency (Irena), building-related power demand is expected to jump 70% worldwide by 2050.
So with the homes and offices we occupy recognised as a major source of carbon emissions, what can be done to improve their environmental performance practically and affordably?
Introducing stricter building codes is one approach. Abu Dhabi has led the way in adopting compulsory standards for new buildings through its Estidama Pearl Building Rating System (PBRS). Dubai has a similar framework known as Al Safat, while green building regulations are one of the nine pillars of Ras Al Khaimah’s recently launched Energy Efficiency and Renewable Energy Strategy 2040.
But what about older building stock? Installing newer and more energy- and water-efficient technology is an obvious way forward. Retrofitting existing public and private buildings is not only good for the environment, it’s also big business. The UAE retrofit market alone is estimated to be worth $1.36bn (AED5bn), and we are only scratching the surface of the commercial opportunities to be had elsewhere in the region.
Energy service companies, or Escos, together with energy performance contracts, are widely utilised overseas. Thanks to the introduction of the Energy Strategy 2050, which aims to increase the efficiency of individual and corporate consumers by as much as 40%, they are now establishing themselves in the UAE.
They take a holistic approach encompassing the design, implementation, operation, and maintenance of energy-saving measures and renewable energy power generation, as well as auditing. By monetising the savings achieved, some Escos are proposing innovative financing mechanisms too.
The Dubai Electricity and Water Authority venture Etihad Esco has pledged to deliver $136m (AED500m) worth of energy savings from retrofitting and solar rooftop deployment by 2030.
Meanwhile at Masdar, we’ve been at the forefront of energy management adoption over the last 12 years, conducting an energy audit of 71 buildings in downtown Abu Dhabi – one of the largest individual energy audits ever attempted in the UAE – and installing some of the first rooftop solar panels on government buildings in the city.
Masdar City also serves as a highly successful template for low-carbon urban development and design, where the energy and water efficiencies of all buildings far surpass international baselines. Now we’re expanding into energy performance contracting, alongside operations and maintenance, to help unlock the commercial potential of energy services beyond the city’s borders.
The emergence of an Esco sector could see the average business in the region slash its energy bill by half. The advent of artificial intelligence and the internet of things promises further dramatic savings. Intelligent, intuitive, and automated buildings that constantly monitor and respond to the needs of their occupants are now a realistic prospect, and the UAE will undoubtedly be at the forefront of their adoption.
Of course, long-term real change – of the sort that will meaningfully address global warming – demands that we also alter consumer attitudes and behaviour – hence the importance of initiatives such as Abu Dhabi Water and Electricity Authority’s Tarsheed programme and the emphasis of the annual Abu Dhabi Sustainability Week on community and youth engagement. But there is no question that technology and business innovation can achieve positive impacts in lockstep with our efforts to change minds.
Much has been achieved in the 12 years since Masdar was created, and I am excited to see what the future holds for energy service companies and the building retrofit sector in the region. Scaling back the insatiable power demand of our homes, offices, and public buildings is an achievable and commercially viable target.