Aiming high to lower building energy consumption
The buildings sector accounts for about 40 per cent of global energy consumption. It is also the largest emitter of carbon dioxide, accounting for around 30 per cent of total emissions. Population growth, higher expectations of comfort and building facilities, along with more time spent inside buildings due to the changing structure of an economy that is increasingly driven by services, have all contributed to the rising energy consumption of buildings.
The demand for more energy-efficient buildings in Southeast Asia is growing on the back of rapidly increasing demand for new buildings, rising energy costs, and mounting regulatory pressures. Over the next decade, the commercial and residential buildings space is expected to grow by 5 per cent, more than double the global average of 2 per cent. Moreover, the region’s energy consumption is forecasted to increase at an annual rate of 4.4 per cent between 2007 and 2030 to reach 1,018 million tonnes of oil equivalent. The expanding buildings market and the pressure to reduce energy intensity has led to the creation of a market for new building management solutions.
Southeast Asia Infrastructure reviews the regulatory landscape for the energy-efficient buildings market and the technology offerings that are attracting customers.
Targeted government policies promote energy efficiency
In this region, the Singapore government has been highly successful in promoting energy-efficient buildings through its policies. It has set forth a national target of “greening” 80 per cent of its buildings by 2030. In a speech delivered at the opening ceremony of Cleantech One, a new green building in Singapore, Lim Hng Kiang, Singapore’s Minister for Trade and Industry, said, “The issue of environmental sustainability is increasingly a key concern of many governments and companies… In addition to the core cleantech sectors of water, environment, clean energy and energy efficiency, sectors such as building materials and construction are developing new businesses to tap into this large market. To propel Singapore forward in this growing industry, we need to create an ecosystem to nurture, anchor and also to commercialise innovation.”
In 2011, the Buildings and Construction Authority of Singapore (BCA) announced the Green Building Model Programme. Under an energy performance contract that specifies the minimum level of energy savings to be achieved, the BCA collaborates with financial institutions to provide loans of up to S$5 million for commercial building companies and energy service companies (ESCOs) to conduct retrofitting activities. As a result of these initiatives, the number of green buildings in the country grew from just 17 in 2005 to over 1,000 in 2012. Twelve per cent of the total gross floor area (which translates into 28 million square metres) in Singapore is now energy efficient.
Moreover, the BCA has established a Green Mark Scheme – a rating system that is used to evaluate the environmental performance of buildings based on internationally accepted best practices. Of the various parameters used to rate the buildings under this scheme is energy efficiency. The others include: water efficiency, environmental protection, indoor environmental quality, and other innovative features that affect the overall performance of a building. The scheme covers both new and existing buildings. All public buildings in Singapore are required to meet the Platinum or Gold Plus standards (the highest and second highest standard), depending on the type of building.
As of May 2012, 16 per cent of the country’s buildings have met the Green Mark standards. According to a survey conducted by the National University of Singapore, participants believe that they will achieve savings of 10 per cent on operational expenses and a 2 per cent appreciation in the value of their properties. Construction companies have generally been very receptive to these standards because they not only increase the value of contracts, but also enhance their brand.
Malaysia and Thailand also provide incentives for energy-efficient buildings. In Malaysia, around 11 per cent of buildings in the service sector are energy efficient, according to the Pusat Tenaga Malaysia (PTM) Building Benchmarking Exercise carried out in 2008. Some successful pilot projects in the country include the Security Commission Building; the Ministry of Energy, Green Technology and Water’s new Low Energy Office building in Putrajaya; an PTM’s Green Energy Office Building in Bangi. These projects have helped demonstrate to industry that the Building Energy Index can be lowered significantly at little additional cost. So far, the focus of these projects has been on lighting systems, daylighting, efficient space utilisation, and energy-efficient equipment.
A showcase project in Kuala Lumpur, Malaysia, which has won the top prize in the 2012 ASEAN Energy Awards organised by the ASEAN Center for Energy, is the eight-storey Diamond Building that houses the Energy Commission in Putrajaya. It has been designed to optimise the usage of natural light. As a result of this design and other features, this building consumes just a third of the energy utilised by most buildings of similar size.
Another exemplary building is the Malaysia Energy Center with a floor space of 4,000 square metres. Its features include effective thermal insulation and double glazing; close to 100 per cent daylighting; energy-efficient ventilation and floor slab cooling; energy-efficient appliances; an energy management system; and rooftop solar panels. As a result, its energy performance index is 0 kWh per square metre per year. Although the cost of constructing this building was 45 per cent higher than an average building of this size, the extra money spent will be recovered in less than 22 years.
Apart from constructing new energy-efficient buildings, Malaysia has also embarked on a major programme of retrofitting old buildings to make them more energy efficient. In addition, it has introduced a Green Building Index which helps all stakeholders including non-experts to assess the energy efficiency of a building. A labelling programme for electrical appliances that rates appliances based on their energy efficiency is also in place.
Thailand has set a target of reducing energy intensity by 25 per cent by 2030 (compared to 2010). Although the targeted groups for this policy include the industrial and transportation sectors, business and residential buildings are expected to play a large role in achieving the targets. By 2030, the country plans to reduce total energy consumption by at least 38,200 kilo tonnes of oil equivalent and carbon dioxide emissions by at least 130 million tonnes.
The Energy Conservation Promotion Act that covers energy management for designated buildings provides the basic legal framework for Thailand’s endeavour to achieve building efficiency targets. This law is complemented by the Building Energy Codes (BECs) for newly constructed buildings and retrofitted buildings with total areas of over 2,000 square metres, as well as standards for labelling for building materials and equipment.
Since 2006, Thailand has issued more than 2 million labels for energy-efficient products. The government is also spending money on a media campaign to create awareness among the general public and industrialists. In addition, the government provides financial incentives to promote energy efficiency, which include the establishment of a fund for energy service companies (ESCO), tax incentives, direct subsidies, revolving funds, and energy credits.
To date, more than 1,000 million baht has been allocated for the ESCO fund. The government has allocated around 7,000 million baht in soft loans for a revolving fund catering to energy efficiency projects; the subscription rate is 95 per cent. Eleven major banks are participating in the revolving fund. Run in collaboration with the Revenue Department, the tax incentive scheme enables companies that purchase energy-efficient equipment to benefit from a 25 per cent credit. The government also offers tax exemptions on investments in energy efficiency through its collaboration with the Board of Investments. Moreover, a direct subsidy that constitutes 20 per cent of the expenses on energy efficiency (subject to a maximum amount of 3 million baht) is provided for energy efficiency projects. Thailand plans to move its energy efficiency programme forward by introducing energy performance certificates in the future that will incentivise large energy consumers to set their energy conservation targets.
Technology to the rescue
Currently, heating, ventilation, and air conditioning (HVAC) account for the largest share of energy consumption of buildings, followed by lighting and appliances. Among non-domestic buildings, offices and retail spaces are the most energy-intensive segments, with a cumulative 50 per cent share of total energy consumption of all non-domestic buildings, followed by hotels, restaurants, hospitals, and schools. Of course, the actual rate of energy consumption varies in accordance with the architectural designs and operational efficiencies of individual buildings.
Whether a building is being designed with green architectural concepts or retrofitted to improve its performance, technology solutions are available. In both cases, it is the operations of the building where technology plays a major role.
An important tool for building managers is building automation software. It allows managers to see energy consumption data on a single screen in real time so that problems appearing anywhere in the system may be addressed immediately. Using automated lighting in a building alone can reduce energy consumption by up to 10 per cent. The use of smart meters provides feedback to building managers and occupants about their levels of energy consumption, which can lead to more responsible behaviour on the part of users by providing accurate information about energy usage.
Different energy-efficient technologies have levels of demand in the Southeast Asia region. Insulation materials, glazed windows, light emitting diode (LED) lights, and energy-efficient cooling systems have substantial demand. In contrast, more advanced technologies such as rooftop solar panels and adaptive energy management systems are not as popular; thus far, their implementation has been restricted primarily to pilot projects.
Several companies are pushing the envelope in their provision of energy efficiency technology. For instance, market leaders in this space such as Siemens AG and Schneider Electric offer various advanced energy efficiency solutions for buildings. They include building automation systems, HVAC control, lighting control, energy monitoring, home automation, and building management. Other related offerings comprise thermostats, sensors, smart metering, damper actuators, and variable speed drives. Philips, among other companies, is leading the way in LED lighting solutions that alone can reduce the lighting energy load by as much as 50–80 per cent.
Pieces falling in place for building efficiency
Nonetheless, it is important to point out that technology alone does not complete the picture. The other major aspect is the ability of the technology providers to provide reliable metrics of performance to certifiers and financiers, which assess efficiency gains and the quality of products. Ultimately, their assessments will determine the demand for energy efficiency products.
Buildings are among the most energy resource-intensive components in an economic chain; hence, improving their energy consumption is the best way for countries to reduce their energy footprint and boost their competitiveness. Leading Southeast Asian countries that are now focused on enhancing their productivity and raising their competitiveness on a global scale have thus made energy efficiency improvements in buildings a cornerstone of their national energy strategy. Further, the region is home to several multinational corporations that are driven both by competitive pressures in the region and the sustainability mandates of their headquarters or home country governments. All of the aforementioned factors combine to provide a powerful catalyst for the future growth of the market for building efficiency solutions.
