Energy efficiency – global powerhouse, local challenge

By Steve Harrison, President of the Building Controls Industry Association (BCIA)

In October, the International Energy Agency (IEA) identified energy efficiency as the ‘invisible powerhouse’ that is improving energy security, lowering bills and helping to reach climate goals in many of the world’s most developed countries.

For those involved in building services and building controls, the report is significant because it shows that energy efficiency is an achievable goal that our sector’s customers should be taking seriously, if they are not already doing so.

The investment in R&D required to develop energy efficient products has meant that they came at a premium in terms of capital outlay, but there is now a clear message that the investment is worthwhile – something that manufacturers, specifiers and installers should be glad to hear.

This is the IEA’s second report on the market for energy efficiency, and it estimates that the global energy efficiency market is now worth $310 billion per year. What’s more, the financial products, which are always needed to support the development of markets, are now helping companies in the energy efficiency sector overcome risks and develop new products.

The IEA shows that energy efficiency has been the main driver of lower total fuel consumption (TFC) in 18 IEA-member countries, having even more impact than the economic downturn. Without improving energy efficiency across homes, buildings, transport and industry over the past decade, energy use would have been 8% higher in 2012.

Indentifying a trend

These numbers are important because the IEA has identified a definite trend that shows energy efficiency is being taken seriously by those with the money to truly influence the market. In the past, efficiency has been described by some as the ‘fifth fuel’. In its latest report, the IEA describes it as the ‘first fuel’.

The IEA executive director, Maria van der Hoeven, commented: “Energy efficiency is moving from a niche interest to an established market segment with increasing interest from institutional lenders and investors.”

However, here at the sharp end where buildings are designed and constructed, or refurbished, things are moving a little more slowly. In spite of government legislation and incentives, the barriers to energy efficient buildings still seem to be in place. Even though today’s building controls are more than equal to the task of monitoring, measuring and managing energy use in buildings, it is still challenging to get this message across.

Good data is very important to lowering these barriers. If we can prove that a strategic approach to energy efficiency in buildings works, then it becomes far easier to persuade end-users and contractors alike to use technologies that can deliver savings.

Holistic approach

Many of these barriers are ‘man-made’ in the sense that they are caused by traditional relationships in the commercial contracting market. For example, controls are often specified under the mechanical services contract, separate from integral integration partners such as lighting control, for example, under the electrical contract. This dictates against a more effective, holistic approach to the building efficiency. There is also the thorny issue of how landlords and tenants can both be incentivised to be energy efficient.

The Carbon Trust is demonstrating that new approaches can be found, with its campaign of ‘better buildings, better used’. The Carbon Trust Low Carbon Workplace Standard includes agreements by tenants that they will act in a ‘carbon efficient’ way, which keeps their energy costs low too.

The energy efficiency challenge has to be tackled at all levels, from international to individual buildings. As energy efficiency is increasing, so is the cost of energy. Between 2001 and 2011 energy prices increased between 11% and 52% in the Agency’s member states – rises that have only been mitigated by energy efficiency.

The IEA was founded in the 1970s, in response to the oil crisis of that decade. Its original key objective was releasing emergency oil stocks to the markets to keep the lights on. Now the organisation is shifting focus from energy supply to demand. It is a change of emphasis that we all need to follow, and as experts in our respective sectors of building services, controls and construction, we are best qualified to help clients find the way forward.

Steve Harrison is President of the BCIA and Belimo Global Product manager.

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