Comment: The power of digital retrofits

Prabhu Ramachandran, founder and CEO of Facilio Inc, opines whether digital retrofits can be part of Dubai's solution to its billion-dollar energy savings plan

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Prabhu Ramachandran.
Prabhu Ramachandran.

Pick a point on the globe and ask the average person what first comes to mind at the mention of Dubai. Chances are that the Emirati city’s skyline and one-of-a-kind real estate developments will be their answer. Dubai is justifiably well-regarded for its iconic landmarks and urban infrastructure. As with any modern metropolis, these same buildings are also responsible for a significant chunk of the city’s energy consumption. Making them more energy efficient is, therefore, key to meeting the Dubai Supreme Council of Energy’s stated goal of reducing energy consumption by 30%, by 2030. One doesn’t even need to make back-of-the-envelope calculations to realise that this constitutes billions of dollars in lowered operating costs and resource consumption.

A prolific expansion, in the capabilities recent technologies have enabled, is leading real estate into a future of unprecedented energy efficiencies and enhanced user experiences. Solutions that will reset the capabilities of built spaces, meet rising occupant expectations, and make the commercial real estate industry dramatically more profitable have arrived, and their impact will usher in a tectonic shift. Dubai, with its penchant for embracing innovation is, of course, already moving towards becoming an enthusiastic early adopter.

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Fortunately, the benefits of this positive disruption are also available to locations with highly developed existing infrastructure. The strategy that is best positioned to assist CRE owners and facilities management (FM) businesses transition existing building stock to future-ready, service-led and smart buildings is Digital Retrofits.

Digital optimisation is not for manufacturing alone
To be relevant in the coming age of AI and IoT optimised environments, buildings need to embrace the same resource, energy and cost efficient approach that is redefining the manufacturing industry.  Effectively, FM now needs to aspire to far more than a siloed approach to maintenance, occupant comfort and sustainability. A new iteration that delivers simultaneous and synergistic optimisation of the three aspects, through an integrated solution, is the new standard to shoot for.

A digital retrofit enables centrally unified automation systems, that leverage an IoT, AI and Machine Learning enabled edge. The resulting enterprise-wide predictive operations, can completely redefine the performance capabilities of existing infrastructure, at much lower costs than pure hardware retrofits. From an automation perspective, a digital retrofit quickens the modernisation process by enhancing, rather than replacing, existing infrastructure. With a fraction of the cost involved in alternative models, the solution will generate billions in additional profits, for the CRE and FM industry.

The software-driven approach, that a digital retrofit enables, brings the same process and functional advantages to the building industry, which Industry 4.0 is enabling in the manufacturing sector. What makes the solution even more compelling is that it deploys full spectrum digital enhancements for existing in situ equipment, at a relatively low investment in capital costs, time and manpower.

The significant financial benefits to ‘smarter’, more efficient buildings
Exorbitant operating costs and underperforming assets are quite typical concerns that plague many buildings, due to automation and related systems reaching the end of their lifespan. Enhancing the efficiency of day-to-day operations, maintenance, and consumption translates into an immediate impact on the profitability of the business. Digital retrofits are far more compatible with the more demanding energy and emission norms the industry is increasingly operating within. The clinching argument, however, is the boost in perceived value of built assets, as well as the inflated bottomline of the business model.

Previous, hardware oriented, retrofits involved large capital investments and time and resource intensive processes. A digital retrofit, on the other hand, delivers an effective and accessible strategy that is rapid in deployment, low in capital outlay, and gamechanging in impact. Etihad ESCO’s seven year retrofit project to make Dubai International Airport more energy efficient, for instance, will lower energy consumption by 23% and enable savings of $ 57.1 million a year(2). While some physical hardware retrofits may be inevitable in certain instances, the FM sector is responding with enthusiasm towards the digital retrofit approach, and the prospect of leveraging data and real-time analysis driven continuous efficiency, in daily operations.

At the 4th Annual Retrofit Tech Summit & Awards, in April 2018, Etihad ESCO CEO Ali Al-Jassim articulated a vision of retrofitting 30,000 buildings in Dubai, by 2030(3). Clearly the opportunities are massive and so is the projected response. Unlike several other instances in which sustainability goals involve ROI over a long time period, digital retrofits combine low initial costs with nearly immediate positive influence on returns.

Preparing buildings for the cities of tomorrow
In an increasingly digitised world, future-ready buildings and enhanced environments are inevitable. Fundamentally, the huge leap forward is in collecting data effectively and optimising building automation on a continual real-time basis. In this context, CRE owners and Facilities Managers need enterprise-wide data platforms for operations and maintenance (O&M), designed specifically for the real estate and FM industry’s needs and infused with AI & Machine Learning, to empower insights-based decision-making. Representing a huge improvement on siloed and reactive legacy systems, digital retrofits enable portfolio-wide visibility and the ability to scale real-time efficiencies across all assets simultaneously. By collating data at that integrated scale, and adding machine intelligence to empower decision-making, CRE owners can finally evolve their operations to the specific analogue of Industry 4.0 that suits their needs.

With the firm political will of the government, the progressive Smart Buildings & Smart City objectives, and nearly $8bn earmarked for upgrading building infrastructure, Dubai is a prime candidate for the commonsensical and financially compelling argument that digital retrofits represent. The city’s concerted push towards – and established precedent of - embracing technology as an agent of change, has already created the context for digital retrofit technology to be the solution of choice. The very compelling economic benefits are the proverbial icing on the confectionary.

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