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Will Readshaw

Director – Intelligent Buildings

Global energy markets are feeling the strain of mounting geopolitical instability, with industry pressures being passed onto consumers in the form of volatile wholesale utility prices. Rising operating costs, paired with delays to the availability of grid-scale green electricity, are forcing businesses to reconsider decarbonisation strategies aimed at their real estate portfolios. So, are organisations succeeding in their efforts to create an energy efficient, low carbon built environment?

Energy resilience and decarbonisation are now priority topics in boardrooms across all industries, with executives regularly being challenged on their progress against public commitments to reduce the carbon intensity of their business operations. An organisation’s ability to hit targets, while managing costs and mitigating risks surrounding these topics, is pivotal in shaping its future performance and investment decisions.

In 2022, building operations accounted for 30% of final energy consumption globally (IEA CO2 emissions in 2022). For many organisations, improving the energy performance of their facilities is critical for them to successfully accomplish their decarbonisation objectives. Positively however, building systems are inherently inefficient and present many opportunities for owners, operators, and occupiers to drive improvements without significant disruption to their business operations.

To better understand current market sentiment, Arcadis launched a survey asking our clients to shed light on how they are responding to the aforementioned energy challenges. Do clients have confidence in their energy and carbon targets being achieved? Is relevant data readily available to clients so they can make informed decisions? Are clients seeing a return on investment from initiatives implemented to date?

Survey results from over forty of our clients across multiple sectors suggest that although the industry is mobilising initiatives to drive energy improvements and facilitate accelerated change, progress has stalled when it comes to practical implementation. Many organisations admitted to not having the necessary data, tools, and capacity to keep pace with proposed timelines. This has led to an emerging sense of uncertainty about the effectiveness of existing decarbonisation strategies.

Nearly 90% of respondents confirmed that energy consumption and operating costs were now a top three priority for their organisation, but only 45% had the relevant data to allow them to identify the root cause of building systems performance issues. Furthermore, only 30% of clients had seen any success in implementing energy reduction and decarbonisation measures to date, and under half had a robust method to validate return on investment. A Managing Director within the hospitality sector summed up the challenge of translating data into actionable insight by stating that their organisation had lots of data but was finding it “very hard to isolate the root cause of variances” in energy performance across a vast portfolio.

Based on the outcome of this survey exercise and through feedback from regular conversations with our clients, the Arcadis Intelligent Buildings team has formed its top five takeaways to address the challenges being faced. These takeaways aim to prepare clients at any stage of their journey to drive energy efficiency improvements and decarbonisation measures across their real estate portfolios.

 

1. Managed service over software: translating plantroom data into boardroom insights.

Often, those responsible for the energy performance and decarbonisation of real estate portfolios lack the quality of information they need to make informed decisions. Quality over quantity is important; gigabyte after gigabyte of raw data does not guarantee positive results and immediate value for your business.

Make sure you are working with qualified service providers with the necessary skills to give context to your building data and translate it into actionable insight. These skills typically include specialists in energy systems, data integration and decarbonisation.

 

2. Beyond changing loo rolls: maintenance contracts that promote positive change.

Traditional maintenance contracts are predominantly reactive, often designed to fix something when it breaks instead of driving efficiencies and continuous improvement. Organisations are starting to realise the benefits of moving to performance-based agreements that incentivise proactivity around energy performance.

Consider whether your facilities management contracts are fit for purpose and facilitate the continuous optimisation of your real estate. Emerging building standards, such as NABERS UK, demand year on year improvements through real time measurement of actual energy usage data.

 

3. Low hanging fruit: quick wins funding longer-term decarbonisation.

Building owners and occupiers typically consider poor energy performance to be an expensive problem to solve. However, we have seen examples of organisations leveraging no-cost or low-cost measures with short payback periods on initial investment, which in turn can unlock funds for more capital-intensive initiatives.

Do not overlook quick wins to provide you with a self-funded route to achieving your long-term energy efficiency and decarbonisation objectives. Seek out technologies and software that can be implemented to achieve rapid return on investment, unlocking further opportunities.

 

4. The reporting dilemma: paving the way to transparent sustainability.

Meeting ESG and Net Zero Carbon targets has become shortform for businesses’ commitment to ethical responsibility. This has led organisations to rush to software tools in aid of navigating the plethora of reporting frameworks, but technology providers have struggled to meet the growing market need for addressing highly tenuous data pipelines and data integrity challenges.

Commit time to fleshing out the management and alignment of your data pipeline and verify that your technology partner has the ability and agility to solve future challenges and adapt their solution.

 

5. Public policy foresight: preparing for the future regulatory environment.

With the ever-increasing public spotlight on climate change and a rapidly evolving regulatory environment, we have seen many examples of government policies being rushed to market that have had massive implications for the built environment. Legislation continues to be a key trigger for agency and investment by organisations into energy efficiency interventions.

Proactively invest in energy infrastructure and a data architecture that enables you to play in a future landscape of flexible demand response events, providing resilience to both regulatory change and utility market spikes.

 

It is clear that the challenges organisations are currently facing are only going to be exacerbated as energy and carbon deadlines get closer. For our clients, the present volatile state of energy in the built environment is concern enough.

In response, Arcadis is working closely with organisations to guide them through the complex landscape of energy optimisation and decarbonisation, taking ownership over the energy performance of clients’ real estate portfolios. This initiative brings together subject matter expertise from across our global business and has proven energy savings of over 30% within a matter of weeks of teams being mobilised.

Get in touch to find out how Arcadis can help address your energy and decarbonisation challenges by contacting Will Readshaw:  will.readshaw@arcadis.com

AUTHOR

Will Readshaw

Will Readshaw

Director – Intelligent Buildings

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