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News Release

Bangkok

Energy saving in real estate: effort is one thing, results are another

More property owners and occupiers have set a goal to make their real estate sustainable and operate sustainably by focusing on energy efficiency. The question is how to measure if those energy saving efforts are efficient.


In today’s world of climate change and rising fuel tariffs, more property owners and occupiers have set a goal to make their real estate sustainable and operate sustainably by focusing on energy efficiency. Different efforts have been introduced to achieve the goal, including simple measures such as changing to energy saving electrical appliances and more challenging efforts such as energy use behavior change and introducing energy efficient technology in the building or workplace. The question is how to measure if those energy saving efforts are efficient.

There are many motivations for real estate owners and occupiers to improve energy efficiency such as:
  • Saving money. Reducing energy use reduces energy costs. Experience shows that property owners and occupiers can reduce their energy consumption by up to 15 - 20%, with an efficient energy management strategy.
  • Supporting CSR objectives. Reducing energy use is seen as a solution to the problem of reducing carbon dioxide emissions. Many companies have set public carbon footprint reduction goals in their sustainability reports that can only be achieved with the help of common-sense energy measures in the buildings they own and the space they lease. 
  • Preparing and responding to the possibility of legislation. The 20-year Energy Efficiency Development Plan (EEDP) in Thailand was formulated with a target to reduce energy intensity by 25% in 2030, compared with that in 2005. There were two main objectives in the plan and the first of these was to set the energy conservation targets in the short term and in the long term, both at the national level and for energy-intensive economic sectors, i.e. transportation, industry, commercial and residential. With more global focus on controlling emissions and the continuation of Asian markets adopting more stringent building codes it is foreseen as just a matter of time until most office buildings especially new ones will have to follow energy codes in Thailand and ASEAN. The main regulatory instrument used in other developed countries is the building energy code, which is a set of minimum energy performance requirements. The purpose of the energy code is to ensure that a building’s energy performance is considered during the design stage of a building project and then in operations. 
First and foremost, real estate owners and occupiers should set a clear goal of what they want to achieve from energy efficiency improvement and identify an energy management strategy that will help achieve their goal.

Improvement of energy efficiency in buildings or workplaces usually requires the following steps prior to any actual implementation of works: measuring where a building or a workplace stands in terms of energy efficiency, reporting measurement results using a recognized protocol, benchmarking performance against comparable buildings and assets, and setting realistic targets for improvement. Measurement and reporting thus set the cornerstone for all other efforts that lead to the final realization of improved energy efficiency. 

There are many ways to measure if the energy saving goal is met. An energy audit is one. It helps access the amount of electricity currently used and what savings can be identified.
There are various types of energy audits which can be carried out for a building and a workplace which range from a ‘full’ energy assessment that identifies all energy conservation opportunities (ECOs) appropriate for the property being assessed, given its operating parameters. A detailed financial analysis is then performed for each opportunity identified based on the implementation cost estimates; site-specific operating cost savings, and the customer’s investment criteria. This type of audit is recommended for office buildings, condominiums, hospitals and hotels as it will cover many issues and create operating efficiencies and bottom line energy savings.

Another option is a ‘light’ energy assessment which will uncover the major areas of energy wastage. Corrective measures would be described, and estimates of implementation costs, potential operating cost savings, and simple payback periods are then provided. This level of detail, while not sufficient for reaching a final decision on implementing proposed measures, will be adequate to prioritise energy efficiency projects for business owners and landlords and help to assess the need for a more detailed audit.

One question that is often raised is whether or not a client should be recommended to undertake a more structured approach to assessing their portfolio’s energy performance. The benefits in assessing across the entire portfolio can be significant and invariably more cost-effective than implementing a programme of discrete site assessments. 

The purpose of the portfolio energy management program is to maintain the overall quality and improve the energy performance of the client’s facilities across their portfolio and to minimize the total cost of occupancy. This form of energy management program can be catered to suit both investor and corporate owner/occupier clients, who recognise the need to proactively manage the energy costs and carbon emissions of their respective portfolio. A portfolio energy audit is suitable for landlords and business owners that have many different properties such as supermarket chains, mall operators, hotel groups and the food and beverage industry where some brands have many outlets across the country.

In summary the need to save energy is a top agenda item for most businesses across Thailand and there are real options available to these companies and landlords to help achieve their goals.

Author: Dexter Norville, a director of property and asset management at JLL. For expert advice on property management, please email at dexter.norville@ap.jll.com or visit www.joneslanglasalle.co.th