Siemens: Cut energy costs without compromising experience

It’s a challenging time for commercial real estate managers. Soaring energy costs, rising interest rates and uncertain markets are increasing financial pressures. Property taxes, insurance, and management fees are all rising. Supply chain breakdowns and a labor shortage are making it harder to maintain operations. At the same time, lower occupancy, increasing competition and new working models are making it harder to find and retain tenants. There is an urgent need to reduce costs, while maintaining and improving the experience of tenants and users of commercial buildings.

Building operators and management have the potential to make a big contribution to cost-cutting programs. With 80% of a building’s total lifecycle costs occurring in the operation phase, issues of efficiency, maintenance and cost control are all obvious targets. The challenge is to reduce these costs while maintaining the experience and wellbeing of people. A decade ago, that would have been a near impossible task, but advancements in technology and increasing digitalisation have created new opportunities, not only to control costs, increase transparency and enable data-driven decision making, but also to potentially create new sources of income and improve the user experience. 

Digitalisation makes the most of the data that is being produced by a building. It centralises key information and creates transparency around it; for example, the volume, origin and cost of resources consumed. Digital solutions (including IoT and cloud) can be integrated into just about anything – security, HVAC, electrical grid, maintenance and more. The beauty of starting a digital transformation is that it doesn’t necessarily need much in the beginning. It can begin with small changes, updating legacy systems step by step.

Energy intelligence

Energy accounts for some 30% of a building’s lifecycle costs during the operational phase. Making a building energy intelligent is therefore critical to reducing these costs.

At the point where buildings connect to energy grid infrastructures – the grid edge – there is huge potential for buildings to play a more active role in the way they consume and manage their energy. Operators can use data-driven analysis to purchase energy at a fair price, trade excesses and continuously improve the performance of their building assets. This can include seamlessly integrating renewables into the energy mix and even generating and storing energy on site. It also provides the potential to participate in local flexibility markets, generating financial returns for adapted energy use. 

This is an approach successfully taken by Finland’s biggest shopping centre — Sello. Working with Siemens, Sello employs a microgrid, a 750 kilowatt peak solar panel system, intelligent LED lighting, and about 2 megawatts of electricity storage capacity. The system helps the shopping centre to automatically optimise both energy consumption, but also energy purchasing. This approach also helped Sello to become the first shopping centre — and one of only nine such buildings in Europe – to achieve the LEED EB Platinum certification in 2015. 

Smart Building Control

Energy use can also be reduced through smart control of a building’s infrastructure. Digital monitoring and control systems can ensure that lighting, heating, ventilation and air conditioning are optimised. By responding to changing external conditions, user needs and levels of occupation, unnecessary use can be reduced and the amount of energy wasted can be minimised. This constant monitoring and adjustment has the knock-on effect of ensuring that occupants are more comfortable and that health, productivity, motivation and happiness are maintained, and a sustainable business environment is created for tenants. Rather than just saving energy, smart environmental controls add value to the staff, tenants and the building itself.

Efficient maintenance with remote and digital services

Digitalisation also creates opportunities for more efficient maintenance. Building performance can be continuously monitored, issues anticipated and regular servicing scheduled. An asset which isn’t performing or is working inefficiently can be detected early and repaired or replaced before it becomes a major problem. Engineers can remain off-site until needed, avoiding urgent requests and costly call-out fees. In a world where engineers are in often short supply, remote services help to keep property management costs down and system performance up. In commercial real estate such as malls or hotels, this ability to use digital tools to ensure facility staff can work efficiently, while avoiding unnecessary interruption caused by physical troubleshooting, is invaluable. 

Investing in savings

Investing in smart infrastructure to reduce expenses might seem counterintuitive at first; yet numbers prove that it pays for itself very quickly. For example Enlighted, a Siemens company, estimates that a 90% reduction in lighting energy use is possible by using a smart, occupancy-based system. Smarter infrastructure and actionable data analytics maintain or add value to a property, attract market demand, create additional market opportunities and ultimately increase cash flow. Digital implementation can increase net operating income (NOI) by 10% or more - a dramatic improvement on traditional levers.

In employing digitalisation to bring about efficiencies and cost reduction, building owners and operators should not be put off by the investment required, or be concerned about negatively affecting the occupant experience. At a simple level it brings an opportunity to rationalise and minimise the use of resources. And when employed more extensively, it not only helps to significantly reduce expenditure, but it creates opportunities to improve the experience for building occupants and the business case for tenants, reduce the environmental impact of properties and increase the value of real estate, while offering the potential for new revenue streams. That certainly makes the efforts worthwhile.

Disclosure: This article is an advertorial and monetary payment was received from Siemens. It has gone through editorial control and passed the assessment for being informative.

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