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Energy conservation and sustainable development continue to be important topics for UAE policymakers. The Dubai Supreme Council of Energy (DSCE), for instance, has set ambitious targets to cut down energy demand by 30 per cent by 2030.
According to experts, while sustainable strategies in earlier years had been focused on new built environments, greening of existing buildings is now gaining momentum in Dubai and being recognised as an equally vital step towards achieving energy conservation.
Saeed Al Abbar, Chairman of the Emirates Green Building Council (Emirates GBC), tells PW that Dubai’s focus on sustainable built environments reflects the vision of a green economy by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
“Ensuring that new buildings are green plays a pivotal role in supporting the government’s vision. However, it is crucial that we exert equal effort on the sustainable retrofitting of the existing building stock.” Commercial and residential buildings in Dubai utilise nearly 70 per cent of the energy produced in the emirate, at a cost to building owners, tenants and eventually the environment.
Green retrofitting is one of the eight programmes introduced under the Demand Side Management strategy of DSCE, which can ensure significant savings in electricity and water across the city.
“According to the International Energy Agency’s estimates, buildings can save on average 28 per cent through energy-efficient retrofitting,” says Al Abbar.
“Energy efficiency is increasingly [being] referred to as the fifth fuel for its financial saving guarantees. Sustainability is a key pillar of the [UAE’s] National Agenda 2021.”
Every building can be potentially retrofitted to a certain extent. “Some basic measures existing buildings can effectively implement include intelligent building controls, lighting retrofits and equipment upgrades,” Al Abbar says.
“Simple low-cost and no-cost measures such as switching off lights and appliances when not in use or replacing inefficient light bulbs and appliances are among many strategies that can bring sufficient savings almost immediately.”
A retrofit project will always start with an audit, which entails inspection, assessment and measurement of various building functions such as its energy and water usage, waste allocation and management and indoor air quality. This is followed by retrofit measures that include methods and technologies designed to address wastage and inefficiency.
“The completion time of a project can typically take from a few months to up to four years, depending on the retrofit intensity,” says Al Abbar. “However, the investment cycle is relatively short and initial investments are paid back within two to five years. After that, the project begins to generate profit for itself.”
What are Escos?
The Dubai Electricity and Water Authority (Dewa) launched Etihad Energy Services Company (Esco) as a super energy service company that will develop the market for executing retrofits. Such companies are commercial or non-profit businesses that provide energy solutions to other companies. Etihad Esco will help Dubai companies identify Escos that meet its requirements as it aims to save around one million tonnes of carbon emissions by 2030. It will manage groups of buildings and take on varied responsibilities, including site audits, financing, project management, commissioning and measurement and verification in accordance with international standards. Escos use Energy Performance Contracting (EPC) for retrofitting.
“The buildings in Dubai that could benefit from a retrofit have been estimated to [be around] 30,000, according to Etihad Esco and RSB [Dubai’s regulatory and supervisory bureau for the electricity and water sector], while the total [number] of buildings goes beyond 100,000, so there is a large potential for change in the emirate,” says Al Abbar.
Stephane Le Gentil, CEO of Etihad Esco, says 80 per cent of the 30,000 buildings selected by Etihad Esco are residential, but the company will initially focus on the government sector.
He adds that some of Etihad Esco’s retrofitting projects are almost complete, including those at Dewa, Jebel Ali Free Zone and Dubai International Financial Centre. Recently signed contracts include Directorate General of Civil Defence — Dubai, Dubai Aviation Engineering Projects — Dubai Airports, Roads and Transport Authority, Dubai World Trade Centre, wasl Properties, Dubai Police and Dubai SME.
Le Gentil says existing buildings that are well maintained can achieve energy cost savings of 10-15 per cent through retrofits, while those that require major work are estimated to save between 25 per cent and 70 per cent.
Types of Esco contracts
Escos use two types of EPC models: shared savings contract and guaranteed savings contract. For the former lowan Esco invests in a project and gets paid based on a share of the energy savings. “If no savings are obtained, the Esco does not get paid,” says Le Gentil. “The sharing rules are decided on a case-by-case basis between the Esco and the client.
“This model works well for small projects, as it becomes difficult for Escos to fully finance large projects.
“Moreover, some Escos do not work with this model because it requires assets [that the Esco will replace like chillers, lights, etc.] to be kept on their balance sheet. The shared savings model is interesting for a client who has nothing to invest, but the Esco is usually not obliged to [deliver] savings. In case of higher savings than expected, the Esco gets a share, which can be detrimental to the client’s interests.”
In a guaranteed savings contract, a client invests in a project directly or through a banking facility and pays the Esco. In return, the Esco guarantees financial savings from the retrofit. “If savings are not met, the Esco will reimburse the client,” says Le Gentil.
“The client gets 100 per cent of the savings. This is an interesting model when savings are higher than expected because [it is] the client who benefits. Also, it is a model that works well for large projects, especially when third-party financing is involved.”
Many financial institutions are interested in funding retrofit projects. “Banks usually finance clients in a guaranteed savings model given the Esco guarantee allows them to be sure of a cash flow from the savings,” Le Gentil says. “They less frequently finance Escos directly under a shared savings model because there is no guarantee of a cash flow being generated by the Esco.”
The UAE has made significant strides since 2006 to drive its green building agenda, with numerous groundbreaking programmes implemented, and Al Abbar believes the country is moving in the right direction.
“With increasing support from regulatory bodies such as the DSCE, the market niche for EPC is slated to grow as the industry gets not only market influence but also mandated direction. Local authorities have put in place strategies, measures and schemes, such as Etihad Esco and Green Fund initiative, to facilitate the process.
“Moreover, organisations such as Emirates GBC contribute by engaging stakeholders through networking, programmes and our Technical Guidelines for Retrofitting Existing Buildings [see box], as well as workshops throughout the year.
“In the future, it is expected that energy audits will become a part of regulation for certain building sectors based on their energy usage and square footage.”
Case study: Dubai Chamber building
Dubai Chamber started retrofitting its headquarters along Dubai Creek in 2009, having occupied the building for 15 years. Eight floors have already been renovated and work on another two floors will be done this year. “Retrofitting is an ongoing process,” says Essa Al Zaabi, Senior Vice-President of Institutional Support Sector at Dubai Chamber. “As our building is occupied, we cannot do everything at once. We need to do it in stages, so there is always space available to work.”
Dubai Chamber already had a very energy-efficient building before the retrofit, having reduced energy consumption per person by 47 per cent. “This allowed us to become the first in the Arab world to achieve Leed certification for Existing Buildings Operations and Maintenance [EBOM] and an energy star rating of 76 back in 2009, meaning we were more efficient than 76 per cent of similar buildings in the US,” Al Zaabi says.
“After the retrofit of eight floors our energy star rating increased to 91, so we were more efficient than 91 per cent of all similar buildings in the US. We achieved Leed platinum for EBOM in 2013, the highest possible rating, while enhancing our energy efficiency by a further 20 per cent.
“We began our green building initiatives in 1998 and have decreased energy and potable water consumption per person by 63 per cent and 92 per cent [respectively] saving around $6 million [Dh22 million] in our [headquarters] alone. At the same time, we significantly enhanced productivity per metre and saw staff satisfaction with our premises rise from 59 per cent to 88 per cent.”
The experience of Dubai Chamber shows that retrofitting offers numerous benefits for commercial buildings, including increased efficiency, improved environmental performance, happier occupants, higher productivity and significantly decreased operating costs.
Al Zaabi summarises the learnings from the retrofitting project:
• Making a building more sustainable does not require a major retrofit. We reduced energy and water consumption by 47 per cent and 77 per cent respectively, saving almost $2 million over ten years through simple and low-cost changes without upgrading our building. These included bricks in toilet tanks, switching off the AC and lighting after hours, capturing condensate from the AC systems, etc. So, even if there is no budget for a retrofit, there is still a lot owners can do to enhance the sustainability of their buildings and save money as a result.
• Dubai Chamber had no extra budget to upgrade its building in a sustainable way. We just used the Leed framework in all our decisions, from our tender through to the contract, material reuse and procurement. The benefits have been tremendous.
• Ensure that you set a strong sustainability objective and use a solid sustainable building framework when doing a retrofit. The fact that we decided to aim for at least Leed gold when upgrading our building was crucial in getting everyone (owners, contractors, consultants and building users) on board, focused and working in the same direction. This led to many important improvements that are rarely seen elsewhere such as carbon dioxide monitors, VIP eco parking, segregated printing areas and the use of recycled water in toilets.
• Greener buildings are much healthier places to live and work, helping occupants to become more productive and happy while costing owners much less in direct and indirect costs.
Source: Hina Navin, Special to Property Weekly