A momentous transition is unfolding in the real estate industry as it strategically realigns with global Environmental, Social and Governance (ESG) standards. Driven by sustainability objectives, multinational companies are increasingly favouring green leases. For instance, Singapore’s whole-of-nation Green Plan 2030 includes a renewed edition of the Singapore Green Building Masterplan, which aims to raise sustainability standards of urban planning and architecture. With mounting pressure to achieve greater carbon neutrality, the industry is uniquely positioned to positively impact societies and accentuate the value of built environment.
This year, the upward trend in Southeast Asian temperatures saw record-breaking temperatures. As energy demands for cooling needs surge, building owners are beginning to look into sustainable cooling solutions, spurring the rise of Cooling-as-a-Service (CaaS).
Find out what it takes to keep Singapore cool
Innovating Sustainable Cooling
CaaS introduces a pay-as-you-use model that eliminates upfront investment and ownership risk. Service providers, like ENGIE, become wholly responsible for system designs, equipment financing, procurement, installation, operation, maintenance and repair. With no minimum scale requirement, CaaS lowers operational cost, encourages economies of scale and increases capital liquidity.
Across Singapore, Philippines and Malaysia, ENGIE is spearheading development and installation of centralised district cooling systems (DCS) in business districts, tech hubs and industrial parks. Installed systems have demonstrated up to 30% improved energy efficiency compared to traditional, standalone cooling units, resulting in reduced energy consumption and smaller carbon footprints. Systems can be optimised according to usage trends, ensuring efficient energy usage and guaranteeing performance.
Sebastian Walker, Head of Business Development – Mixed-use and Real Estate at ENGIE South East Asia, shares on district cooling in Southeast Asia
Alleviating the ‘Urban Heat Island’ Effect
As urbanisation speeds up, so does the increase in demand for energy. Governments bear the crucial responsibility of mitigating the escalating negative environmental impact of fossil fuel-based energy systems. While existing levels of urbanisation may differ, it is advisable for greenfield projects to implement CaaS from inception.
ENGIE embarked on a milestone Design, Build, Own and Operate (DBOO) project in Singapore. Appointed by JTC Corporation, ENGIE will develop an underground DCS for the Punggol Digital District, an integrated hub comprising a Singapore Institute of Technology (SIT) campus, a business park and community facilities. The system will eventually supply a cooling capacity of nearly 105 MW, equivalent to cooling 8,000 4-room flats.
As governments heighten carbon reduction commitments, developers face evolving regulations and green certifications such as Malaysia’s Green Building Index and the Philippine Green Building Code. These initiatives promote environmentally-friendly building practices and redefine sustainability standards for greenfield and brownfield projects. Green certified buildings are considerably more desirable, especially to environmentally conscious tenants, who are on the lookout for leases that align with their own ESG values and can bring long-term operational cost savings due to energy efficiency and sustainability features.
With tenants ready to pay premiums for green-certified buildings, upgrading existing buildings is becoming imperative. Neglecting this transition will likely result in an overall depreciation: higher operational costs, increased rental turnovers and higher vacancy rates. Rather than a challenge, brownfield developments have the opportunity to refine existing systems, rectify inefficiencies and optimise energy distribution via existing data.
In April 2016, ENGIE Services Philippines and Filinvest Land Inc. commenced a joint venture—supplying cooling to 12 existing buildings in Northgate Alabang’s industrial park. The venture also projected for the addition of 4 buildings to be connected by 2020. By September 2017, Philippines’ first and largest energy efficient cooling system was commissioned, yielding a 35% reduction in electricity consumption, 65% less water consumption, 50% enhanced energy efficiency and a 50% drop in CO2 emissions. This transformation also led to reduced operational costs.
Repurposing Space & Diverting Capital
In brownfield projects, alternative energy systems unlock valuable space for repurposing. For instance, outsourcing utility needs and implementing solar energy systems can prove favourable with lower operational risks and revenue generation.
Conversely, greenfield projects can optimise energy consumption by integrating biophillia and passive cooling measures, such as solar shading and architectural ventilation.
Finally, all real estate, new or existing, can benefit from digital solutions to improve energy efficiency through data-driven insights.
Ensuring the Longevity of CaaS
ENGIE partnered SIT to jointly develop the ENGIE-SIT District Cooling Centre of Excellence. The initiative is aimed at cultivating a district cooling ecosystem in Singapore and the broader region. The Centre will serve as an innovative hotbed for developing cooling solutions and nurturing skilled leaders for the continuously evolving green revolution.
Connect on LinkedIn: Sebastien Walker | LinkedIn