Learning from Overseas Approaches to Energy

01/25/2013 |

See what FMs are doing in Australia

Can you give examples of successful approaches to energy management outside the U.S.?
Of all the approaches I’ve seen, some of the most outstanding results have been in Australia, where a rating scheme for existing commercial buildings based on actual performance, not merely design, has found widespread acceptance. Called NABERS (National Australian Built Environment Rating System), the program has delivered the holy grail of building energy management, namely an increase in the asset value for office buildings with high ratings.

Australia also has a trailblazing carbon pricing mechanism, introduced in mid-2012. Although commonly referred to as a tax, the arrangement will allow the true environmental cost of carbon emissions to be reflected in higher energy prices for those facilities with higher emissions. So it’s much fairer for everyone – a very Australian trait.

Do you see a significant increase in efficiency when energy prices are high?
It’s too early to tell. But consider some other examples of energy price disparity as an indicator. Contrary to what might be expected, electricity and other energy costs have not been proven to drive energy efficiency in buildings, new or existing.

In Vietnam, for example, the price of electricity is about the same as in New York City – quite high by world standards. Other costs in Vietnam, however, are far lower than in New York City. Labor cost averages only about $200 a month, less than one-tenth that in New York City. You might imagine that the emphasis on eliminating energy waste should be ten times more aggressive in Vietnam, and that buildings there would be highly energy efficient, even if not by a factor of ten. But that is not the case. Their efficiency is merely average.

Of course, this is also true in the U.S. Buildings in Hawaii, where electricity costs around 30 cents a kilowatt hour, are not four times more efficient than those in North Dakota, where electricity is a quarter the price.

What other countries have made ground-breaking moves?
Another stunning example of energy management at the next level can be seen in Singapore. Admittedly, Singapore has some unique advantages. As a compact city-state with virtually one-party rule, setting the bar high is easier than in other places. Still, the comprehensive Green Mark program (www.bca.gov.sg/greenmark/green_mark_buildings.html) is enviable. It includes carrots, sticks, design stage, operations stage, recognition, operator training, and professional certification all in one neat package.

On that subject of continuous improvement, ISO 50001 is making good progress in the U.S. What’s the story in the rest of the world?
Many countries, particularly in Europe, got a big head start on the benefits of a formal standard for the systematic management of energy use. Individual countries developed their standards, and then a Europe-wide standard was published in 2009. The continuous improvement required by these standards has embedded an energy management mindset in portions of the industrial sector, although perhaps to a lesser extent in the buildings sector. I’m sure the Europeans consider this a competitive advantage and intend to keep it that way.

You’re based on the edge of China. Any observations about energy practices there?
It’s worth remembering that there are two dimensions to energy efficiency – the efficiency of existing buildings vs. that of new ones. In most developed countries, new buildings amount to about 1% of existing stock. But China is adding 4% every year – 20 billion square feet. So you could say that energy efficiency in new buildings is four times more important.

There’s another wrinkle. Older buildings in China are poorly insulated and have poor window systems but occupants have put up with uncomfortable conditions. Wearing coats and hats indoors in winter is common, as is making do with a fan in summer. However, this tolerance of discomfort is changing, with the result that new buildings are consuming more energy than older buildings despite their greater efficiency. That’s a real challenge for China’s energy management professionals.


Robert Allender, an advisor with Hong Kong-based Energy Resources Management, has been guiding clients since 1992 on ways to avoid unnecessary energy expenditure. He can be reached at www.energy-rm.com.hk.


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