Decarbonization: The Future Green Economy Of The Building Industry

Reducing energy consumption has become a call to arms for governments and energy producers as they scramble to secure alternative fuel sources. But in its wake, the energy crisis is not just leaving disgruntled consumers and households in the dark. It’s forcing large industries and even factories to curtail production or shut down.

We cannot mince our words or drag our feet any longer. It’s time to start implementing the solution we have had on the table for some time now. Decarbonization – the decreased reliance on and eventual avoidance of fossil fuels – combined with digitalization.

Decarbonization needs to happen in every aspect of our lives, driving a material shift in how we produce goods, construct buildings, move from point A to point B, engage our supply chains, and use electricity. How each industry approaches decarbonization may be slightly different, but the premise of striving to be more sustainable will remain the same. For this discussion, let’s focus on the building sector.

Decarbonization and the building sector

The building sector accounts for a staggering 40 percent of global energy usage, and one look at the volume of construction projects globally indicates that demand in this sector is showing no signs of slowing down. And even more staggering is the fact that how we manage and operate buildings causes 27 percent of global carbon emissions. So, when we consider that the worldwide building floor area is expected to double by 2060, the need to transform this into a more sustainable and energy-efficient sector is an immediate one.

In concert with our customers, what we see as one of the most effective means to drive energy efficiency is by using Internet of Things (IoT) and digital solutions to provide the data needed to manage energy consumption better. As the saying goes, you don’t know what you don’t know, which makes the visibility afforded by IoT devices and the data they provide through the digitalization of building management so crucial to ascertaining where inefficiencies exist.

That’s just the start. Digital solutions within the building industry pave the way for improved energy and performance services such as generation and storage, microgrid control and EV charging solutions, and even holistic asset performance management. Using digital twin technologies that offer a way to digitally ascertain an optimal solution before deploying it physically also leads to improved optimization, better lifecycle performance, and immediate energy-saving benefits.

Data is core to all of this. With data, companies can actively (and effectively) use automation and AI technologies – the benefits of which we haven’t scratched the surface of – but which we can already see can aid in improving energy use and cost savings.

Requirements of a digital shift

However, an industry traditionally reluctant to take responsibility or shoulder the costs of digital technologies has been holding us back. In short, many players are still pulling horse-drawn carts in the 21st century.

But technology is coming of age, which means it’s also becoming more affordable. Sensors are cheaper, the cloud is maturing, and X-as-a-Service business models are paving the way for purchasing models that allow businesses to buy what they need and pay for only what they use. This shift positively and directly affects the bottom line as it enables the shift from CAPEX-intensive investments to more flexible OPEX options.

A genuine challenge facing the building sector is that, to date, many of the technologies used by the industry have been proprietary. These systems are already old, sometimes unwieldy, and often – legacy. Therefore, the solutions required to support a digital roadmap must be open, modular, flexible enough to integrate and work with these legacy solutions and of course be secure. The latter, security, is critical, especially as cybercriminals have been able to take down entire networks by simply using poorly secured IoT devices.

There must also be a greater focus on partnerships for the building sector to embrace decarbonization and digitalization. There is no way that any one supplier, vendor, or company can try to be all things to all people. Success in facing the energy crisis requires all industry members to work together. And when it comes to technologies, this means building an ecosystem of products and solutions that “play well with others”, from devices collecting data to the software making sense of it.

No time to wait

Time is of the essence, and that’s not just because of the energy crisis facing us from the Southern tip of Africa to the heart of Europe and across the United States. There is also legislation and agreements that, if not adhered to, will have far-reaching consequences.

For example, the International Energy Agency’s (IEA) “Net Zero by 2050. A Roadmap for the Global Energy Sector” report fleshes out the timeline for decarbonization compatible with the Paris Agreement in the buildings sector. To quote the report’s findings, it stipulates that by 2030, all new buildings should be zero-carbon ready and universal energy access facilitated.

It further says that by 2035 most appliances and cooling systems sold should be best in class to ensure no more energy-guzzling equipment is used. And it outlines 2040 as the deadline to retrofit 50 percent of existing buildings to zero-carbon-ready levels. The bottom line? By 2050 more than 85 percent of the building stock should be zero-carbon-ready.

It’s a big ask. And one that only a few are ready for.

Let’s also not forget the breadth of vertical markets in play, each with their own potential for energy savings and decarbonization. Whether we consider hospitals, municipalities, data centres and so on, it’s essential to apply the right technology for the right outcomes, based on their individual needs. Only then will we bring together the essential building blocks for successful smart cities.

One such example is that of Klinikum Bremerhaven-Reinkenheide. For most of our customers, it’s not just about building sustainable buildings in the long term. Instead, the immediate need is to cut energy costs. For example, our long-standing customer Klinikum Bremerhaven-Reinkenheide, a hospital near Hamburg, Germany, asked us how we could guide it to help cut energy costs while addressing long-term decarbonization goals.

The first step was the creation of a comprehensive decarbonization roadmap where we could demonstrate synergies between optimized energy purchasing, combined with flexible, decentralized energy generation through the enablement of a range of services.

It was Klinikum Bremerhaven-Reinkenheide’s foresight and willingness to change its view on its energy consumption that has put the hospital firmly on the path to decarbonization. With flexibility and energy purchase services, the customer has saved around EUR 320,000 per year in energy costs. It can now take these savings and invest in core operations to continue providing world-class care and treatment to patients.