The cost implications of building green

21 November 2013

The GCC is pushing energy efficiency in construction up the agenda and is putting in place standards and codes to turn future developments green. Progress, however, is still slow

It is hard to miss the campaign to “keep temperatures at 24 degrees Celsius”, from banners across highways to text messages, all signs of an increasing consciousness about energy conservation in the UAE.

Energy efficiency has become a core pillar of economic strategy, not just in the UAE, but also in other GCC countries. It has come to the fore in recent years primarily because of rapidly rising peak power demand. While obvious energy users include industry and transport, GCC governments are also focusing efforts to curb energy use in the region’s third-largest consumer segment – buildings.

Carboun, an advocacy initiative promoting sustainability in Middle East cities, estimates that buildings in the region consume roughly 24 per cent of total power output. Changes to buildings and air conditioning standards, therefore, will be highly rewarding, with energy savings estimated at 70 per cent in new buildings, according to a recent report by UK think-tank Chatham House.

Green building standards

Leading the way is the UAE. Abu Dhabi, through Estidama and the Urban Planning Council, has put together a customised set of standards called the Pearl Rating System. Meanwhile, Dubai Municipality has outlined a green building code, to come into effect by January 2014.

Saudi Arabia lags behind in developing a customised green building code, but there is a concerted effort to get the conversation started through events such as the Saudi Green Building Conference held in Riyadh in November. Despite this, progress has been slow

Green building standards implemented in the region have far-reaching consequences, not just in terms of energy savings. The economic effect extends to demand for a higher quality of products across the board.

While demand for high-end products may remain unchanged, there will be a push from usage of low-end products to a medium or standard quality, in an attempt to meet minimum requirements set out by green building codes.

Contractors will demand better-quality products ranging from heating, ventilation and air-conditioning components, such as grilles and diffusers, to glass and aluminium frames for windows, which could drive up their revenue potential in the sector.

Furthermore, to monitor energy consumption in buildings, installation of building energy management systems becomes imperative, creating demand for solution- and maintenance-driven information technology services.

The impact, therefore, of the green building codes is broad, affecting not only property developers but also manufacturers and traders of a host of building materials and components. In countries such as Saudi Arabia, this trend is likely to be slower, given the lack of a mandatory green building code to date.

The central metric for success is a realisation of actual energy savings, so peak power demand is lowered and resources required in the generation of excess electric power are freed up. It will be a few years before such an assessment can be made, however.

The first step in bringing this to fruition is a blanket implementation for new buildings and an effective strategy to retrofit existing buildings. Even with Estidama, the organisation that has made the most progress so far, implementation in existing buildings is not mandatory.

Price-sensitive market

Further impeding progress is the price-sensitive nature of the market itself. With a generally lower level of education prevalent among contractors in the region, there is less awareness of the long-term cost savings and environmental benefits of going green.

Developers and contractors view building projects from a short-term perspective, specifically off-plan residential properties, where operational costs are the end-user’s responsibility. While some developers may mandate higher quality standards and products at the design phase, these get negotiated down through the tender and construction process often resulting in the procurement of products with the lowest price within a range of specifications.

Modern architectural styles being adopted in the region, predominantly buildings with glass facades, are likely to drive up air-conditioning requirements. It becomes critical, therefore, to put in place efforts to curb air conditioning and energy costs associated with buildings.

The efforts made by Estidama, Dubai Municipality and GSAS represent a step in the right direction. The final outcome, however, will be determined by the quality of the components ultimately utilised in the construction process, a function of two opposing forces – the mandate to meet minimum efficiency standards and preference for products with the lowest price.

Key fact

Buildings in the Middle East consume roughly 24 per cent of total power output

Source: Carboun

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