Dubai is one of the leading cities in the world implementing a city–wide strategic buildings energy efficiency program with tangible Social, environmental and economic benefits. Etihad ESCO’s purpose is to serve the strategic goal of the United Arab Emirates pursuing a green economy for sustainable development by making Dubai a global model of green economy transition through leadership, partnership and adoption of energy efficiency technologies.Etihad ESCO’s vision is to make Dubai one of the most sustainable cities in the world.
Stephane le Gentil, the Chief Executive Officer at Etihad Energy Services Company or Etihad ESCO, addresses exclusively to AsiaGreenBuilding the target of future Dubai sustainable cities, how they attempt to reach not just the governmental building, but also the private sectors, and the UAE retrofit market with the major challenges in the segment.
How optimistic is it to target Dubai as one of the most sustainable cities in the world in the next 5 – 15 years?
The Dubai Supreme Council of Energy is working to make the Emirate one of the most sustainable cities in the world. The Dubai Government is taking no half measures to ensure the Emirate will be model to the rest of the world, and the inclusion of a mandate in the Dubai Plan 2021 resonates that perfectly.
We also would like to think of ourselves as one of the enablers in Dubai Integrated Energy Strategy 2030. After all, Etihad ESCO’s purpose of existence is solely to ensure the fruition of the mandate.
At this moment, Etihad ESCO mainly focuses on governmental buildings. Do you also plan to expand your reach to private sectors?
The potential is massive for ESCO projects and we (Etihad ESCO) are in a nascent stage of establishment. Given our limited resources, we had to prioritise our target, and not disperse the efforts.
Etihad ESCO prioritized Government-related projects the UAE government bodies are leading the green brigade by example. Additionally, the government departments own the buildings they occupy, which makes planning and execution straightforward.
The process of retrofitting does not need to involve the developers because the focus is on buildings that exist already, in turn it is the building owners that we closely work with.
How big is the retrofit market we are seeing in the UAE and what are the main challenges you observe in the segment?
The scope for retrofits is massive; following careful research and analysis we have identified an estimated 30,000 buildings deemed potential sites.
The major challenge we receive is when tenants are renting properties because owners do not see the point to invest into a retrofit project given they do not pay for the energy costs and will therefore not benefit from the savings generated. To counter this, a labeling scheme is being worked out by the Dubai Regulatory and Supervisory Bureau (RSB) so that good performing buildings will be officially recognized and valued in the market.
Some owners may be more interested to invest their available budgets into new properties rather than into improving the existing ones. We are addressing that by proposing funding for the projects that is paid-out from the energy savings generated making it a cash-flow neutral operation for the owner. A financial fund for energy efficiency is currently being worked out.
Moreover, there is currently, no such financial benefit scheme as part of Government supports that exists in Dubai or UAE. However, there are investment funds being prepared to finance the projects. It is important to note that the retrofits installed begin to pay dividends from the day they have been installed, and it is not long before the entire investment is recovered, directly through savings.
About Etihad ESCO
Etihad ESCO is a DEWA venture that was recently established in 2013 to make Dubai built environment a leading example of energy efficiency for the region and the world. As a Super ESCO (Energy Service Company), it enables the energy performance contracting market in Dubai by developing energy efficiency projects targeting more than 30,000 buildings. Etihad ESCO aims to jumpstart the creation of viable performance contracting market for energy service companies by executing building retrofits, increasing penetration of district cooling, building capacity of local ESCOs for private sector and facilitating access to project finance. The Dubai ESCOs market will provide new business opportunities for joint ventures, international partnerships as well as engage UAE national entrepreneurs through a diversified supply chain from financial institutions, technology providers and equipment manufacturers to service providers across the project development, management and reporting stages.
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