Viridista - Energy Solutions
 
 

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Energy Retrofit

Unlike much of the Middle East and parts of Asia, the majority of Europe's buildings and facilities were constructed prior to, or immediately after, the war years. As a consequence, much of Europe's legacy real estate exhibits very poor energy performance when compared to newer buildings. This results in higher operating costs and has significant consequences as we work to reduce greenhouse gas emissions by 80% by 2050. Indeed, according to some estimates¹, 87% of the property which exists in the UK today will still be with us in 2050. It is therefore imperative that we tackle the energy performance of these older properties in order to reduce emissions and to remain competitive.

energy management

"for a project that pays back in five years, clients are effectively receiving a low risk 20% return on investment"

Despite a slow start in many parts of Europe and especially the UK, the range and number of building retrofit projects being undertaken is rapidly on the increase. This is principally being driven by fast-rising energy costs, the current low-cost of capital and the rapid advance of technology and innovation. The combination of these three things means that many significant and deep energy retrofits can be fully self financed from the resulting energy savings. Projects typically pay back over 3 to 7 years depending on the technology being deployed and the age of the facility. For a project that pays back in five years, clients are effectively receiving a low risk 20% return on investment, a level of return which is seldom available elsewhere.

Energy retrofit projects typically involve installation of new plant and equipment such as lighting, controls, HVAC plant and building integrated renewable energy. If longer payback periods are acceptable to a client, then many building fabric measures can also be implemented such as re-glazing or building insulation. It is sometimes possible to blend short payback and long payback projects together into a single program which still has an acceptable payback period for clients.

"retrofitting provides benefits for building tenants who will enjoy reduced energy costs, reduced maintenance costs and improved plant reliability"

Through innovative contracting mechanisms it is now possible to self finance energy retrofits, thus bringing rewards for both landlords and tenants. Retrofitting provides benefits for building tenants who will enjoy reduced energy costs, reduced maintenance costs and improved plant reliability. From a landlord's perspective, the energy retrofit of ageing facilities increases the value of real estate and improves the lettable value of a property. Based on a survey of 10,000 office properties, research by the University of Berkeley ² concluded that energy efficient green buildings had effective rents 6% higher than similar buildings and had a sale value 16% higher than non-green buildings.

There has never been a better time to undertake energy retrofits. So, if you own or operate a large real estate portfolio, industrial complex or facility and want to discuss the potential for energy retrofitting, please contact us to find out more.

References
1 : Climate resilience, energy independence and sustainability -The role of the existing built environment, M J Kelly, Chief Scientific Adviser to DCLG (UK Govt) 2008

2: University of Berkeley : Doing well by doing good ? Green office buildings - John M. Quigley et al : 2009

 


 

 

 

How we can help:

If you own or operate a large property portfolio, facility or industrial complex, contact us to find out how you can benefit from energy retrofitting. We can provide support in the following areas:

 
energy management
 

Feasibility Studies
All energy retrofit programs start with a feasibility study. In the first instance, it is generally best to focus such studies on a number of older pilot properties or on suspected areas of opportunity. We commence any feasibility study with a detailed discussion regarding current and future use of the facility and also identify any potential impediments, such as near term lease breaks or restrictions. The next step in the process focuses on data collection, in particular the gathering of information relating to energy consumption, facility occupancy and other variables, such as manufacturing volumes and processes. Armed with this information, we are able to undertake a number of desktop and site-based assessments to identify potential energy retrofit opportunities. These may incorporate a wide range of technologies ranging from mechanical and electrical plant, building fabric and renewable energy retrofits. Once a client identifies which opportunities are likely to be of most interest, we can then undertake further work to determine the likely cost, energy and carbon savings, ROCE and NPV for specific projects.

Retrofit Procurement
Unfortunately, energy retrofit projects can be both technically and commercially complex. This is especially true when employing Performance Contracting models with guarantees. Failure to address these complexities can often result in long procurement lead times, post contract complications or viable contracts simply not being implemented due to procurement resource constraints. The most successful energy retrofit contracts share several common features which should be addressed at the pre-contract stage. These include the timely provision of detailed baseline information by the client, the identification and sensible apportionment of project risks and the installation of a robust Measurement and Verification (M&V) programme. With a little detailed planning and some specialist knowledge, most property owners can benefit from the significant rewards that energy retrofits can deliver.


Retrofit Projects
Depending on the nature of the project, Horizon Power and Energy may be able to directly deliver your energy retrofit project. The first step in this process is the preparation of a clear statement of work which details exactly what will be delivered, by whom and when. Concurrent with this activity, we will assemble and work with relevant technology providers, contractors and financiers. If preferred, we can also work in partnership with your preferred contractors or facilities managers to deliver the project. Once the project has been specified and the delivery team assembled, it is important that we engage and work with key representatives within your organisation to get their input and support. This approach also ensures that business disruption is eliminated or minimised and that any potential impacts on safety or business continuity are thoroughly understood and managed.

Measurement & Verification
Investors in your energy retrofit project will want assurances that the project is delivering the anticipated savings and that their investment is being returned either directly or indirectly. This is true of third party investors and of landlords or tenants investing in their own estate. The practice of measuring project success and returns is called Measurement & Verification (M&V) and it is essential if clients are using self funding Energy Performance Contracts. Every good M&V process starts with establishing project boundaries, key variables and pre-contract baselines. This may include operating hours, weather data or occupancy rates as well as energy consumption. Periodic metering, measurement and analysis of these variables, and the related energy consumption, can then be used to accurately determine savings and contract payments. Horizon Power and Energy can provide independent M&V services in accordance with recognised international protocols, thus ensuring the integrity of your energy retrofit project.
 
Viridista - Energy Solutions