Retrofit is a natural progression for real estate

06 June 2022
Growing demand for energy efficiency makes retrofitting a welcome opportunity for the UAE's real estate and facilities management players

Retrofits geared at improving energy efficiency can become a natural progression for the UAE’s real estate and facilities management (FM) sectors – if rolled out effectively.

Retrofitting in the built environment is primarily geared at improving the efficiency and sustainability of an existing structure by reducing energy and water consumption. This can be achieved in a number of ways, including lighting and HVAC upgrades, waste management strategies and investments in digital infrastructure.

Retrofitting can bring multiple benefits. For the building owner, the obvious benefit is energy savings. It can also provide a market edge and the chance to charge more premium.

For governments and regulators, it is a way to keep a critical carbon emitter in check.

Estimates from the United Nations (UN) show that the buildings and construction sector account for nearly 38 per cent of global energy-related carbon emissions. The operation of buildings makes up around 28 per cent of total global emissions.

These figures indicate significant scope for targeted abatement, especially as governments in the region seek to achieve net-zero status in the coming decades.

Efforts to make headway are visible in the UAE, as municipalities and building owners are faced with ageing stock and growing pressure from end-users to ‘greenify’.  

Dubai Electricity and Water Authority (Dewa) plans to retrofit more than 30,000 buildings at a cost of $8bn by 2030, while Abu Dhabi is aiming for 3,000 buildings in a similar period. Ras al-Khaimah is meanwhile aiming to retrofit 3,000 buildings by 2040.

 Abu Dhabi gears up for retrofits

Much more needs to be done. At present, there are no mandates that stipulate necessary upgrades of older buildings in the UAE.

Furthermore, progress is disjointed. In Abu Dhabi, several government entities have signed up with ‘Super Esco’ Abu Dhabi Energy Services (Ades) to retrofit their buildings. But no programme at such a scale is active in the private real estate space.

The public sector has typically been the trailblazer for innovation in the UAE, and perhaps this will be the case with retrofitting as well.

Financing such initiatives requires the adoption of more ‘unconventional models’ – such as energy-saving performance contracts, where an energy service company (Esco) designs, finances and implements the retrofit. Such an approach is still relatively nascent in the region, with a lack of awareness among building owners seen as a major impediment.

Next up: Net-zero

Ahead of the UAE hosting Cop 28, it is expected that there will be greater pressure on the industry to take concrete steps to tackle carbon emissions.

Building retrofitting can become a stepping-stone to net-zero built environments. A core part of net-zero structures is being able to accurately track and forecast emissions – a task that cannot be achieved without sensors and other digital monitoring mechanisms.

 UAE climate envoy urges inclusive energy transition

It is also about balancing energy demand with clean energy supplied through renewable sources.

Developers, designers and contractors have the onus to drive net-zero efforts in the stock that is due to be delivered in coming years.

For existing structures, it is the owners, operators and maintenance stakeholders that must take charge. At a recent event in Abu Dhabi, a government representative noted that retrofitting can be seen as ‘step one’ in the journey towards net-zero.

“Net-zero in the built environment is not a concept that emerged yesterday,” said Mohamed al-Hadhrami, Energy & Water Efficiency Accelerators Directorate, Abu Dhabi Department of Energy (DoE). “However, the challenge with reaching net-zero is not regulation, but technology and costs.”

The technical and commercial viability to retrofit large, commercial structures to become net-zero does not exist today, he said.

“There is still resistance from building owners to retrofit even to improve energy efficiency, let alone become net-zero. Activity is ramping up, but we still have some ways to go.”

For now, the retrofitting story in the UAE is in its early days, focused on building awareness, changing mindsets and piloting success stories. In the future, further efforts will be needed in the form of benchmarking criteria and mandating upgrades.

While much work remains to be done, next year's Cop 28 in Abu Dhabi could give the industry the nudge it needs to embrace the option of retrofitting buildings.

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