By Chris Gunn
HVAC system upgrades and equipment replacements are among the most complex and expensive projects in commercial facilities.
The systems provide essential cooling and heating that is designed to keep occupants and visitors comfortable during their time indoors.
For facility managers, planning, scheduling and overseeing HVAC system upgrades, success more than ever depends on their ability to gather, analyse and use past data effectively. Technology advances in HVAC system monitoring, control and operation gives managers an extra pair of hands. HVAC upgrades give them the opportunity to put it to work.
Historical data
Understanding the condition and performance of an HVAC system has always been essential when planning upgrades, but facility managers have never had so much past data so readily available to them to aid their efforts. In fact, historical data is a vital stage in the upgrade planning process.
History is key. Historical data on system operation and condition enables managers to provide the project team with vital resources to make informed decisions. That part is absolutely key.
Having documented past operating logs and documented preventive maintenance records and having it ready for the people that are going to be implementing upgrades is really important.
Whether you do an energy assessment, or whether you’re constantly recording the running amps of your units, among the earliest decisions managers must make in planning HVAC upgrades involves the scope, objectives and target of the project.
The process requires owners, managers and others involved in the process to understand the condition and performance of system components.
The data needed for project planning includes information at the component level.
Where can owners and managers look for critical system and component data?
If the site(s) have BMS systems and job management systems, those are a good start. If there is no BMS, then IoT devices can be fitted to key items of HVAC equipment to monitor energy consumption and occupant usage.
Both building automation and IoT systems also can provide critical HVAC data.
In the most basic case for an HVAC system, that could be monitoring space comfort or temperature and humidity of all the spaces served. You can go all the way up to the major equipment level with data related to air side, changes in temperature and changes in pressures.
It’s not often that facility managers can substantially reduce electricity expenses without compromising comfort or safety. Strategically developing and implementing solutions based on a professional-grade energy assessment provides this unique opportunity.
The role of energy audits in enhancing facility performance
A professional-grade energy audit can help facility managers reduce electricity expenses without compromising comfort or safety.
Most commercial buildings use more power than they need, driving up operating expenses. An energy audit is ideal because it assesses how, when, where and why gas and electricity is consumed. How can facility managers use it to their advantage?
Many commercial facilities use too much energy
Over time, utility bills tend to creep up. Systems do not always operate at 100% efficiency and begin drawing more power to compensate. The change is gradual, happening over many months/years, so building owners often do not realise the issue’s extent until it becomes impossible to ignore.
In a 2018 survey of commercial buildings, the country had 2 million commercial buildings, with a combined total of 7.35 billion square feet of floor space. In total, they consumed around 6,755,530.00 Kw of electricity.
Around 32% was used for space heating, 11% for ventilation and 10% for lighting. Water heating, computing, refrigeration and office equipment each contributed a fraction of the total. The bulk of those costs came from heating, ventilation and air conditioning (HVAC) processes.
The role of a commercial energy audit
During a commercial energy audit, an auditor assesses how, where and why a facility consumes energy. They aim to address inefficiencies and identify areas of opportunity, enabling a substantial energy consumption reduction.
An audit can be a straightforward walk-through or an in-depth, data-driven analysis covering all premises systems.
Depending on the area’s size and the scope of the problem, professionals may seek help from computer simulations, digital twin technology, or building monitoring systems. Visualisation and notification to anomalies can be a powerful tool, especially for the less technologically savvy.
What happens upon completion of a commercial audit
Whatever the audit’s results, the project management team will receive a baseline on the property’s energy consumption, waste and reuse effectiveness rating. They can use this data to identify pain points, explore areas of opportunity or prioritise equipment upgrades or replacement.
Electricity consumption is central to utility costs, facility health and occupant well-being. For example, improving just the HVAC unit can lower utility expenses, reduce wear on adjacent systems and improve the air quality.
AI technology
Unsurprisingly, AI has evolved quickly in monitoring HVAC equipment usage and alerting users to energy exceptions. Users in large quantity, such as the retail and hospitality sectors, are already seeing substantial energy savings. This valuable insight into how and where electricity is utilised, wasted and reused can help maintenance professionals develop proactive upkeep and repair strategies. Also, it informs the urgency of future investments, enabling them to coordinate better with decision-makers regarding equipment upgrades and component replacement.
How energy audits enhance facility performance
Inefficient systems and compromised building envelopes are unnecessarily resource intensive. According to the U.S. Department of Energy (DOE), approximately 30% of the money used to power buildings – around $400 billion annually – is wasted yearly.
The equipment performance is dependent on system efficiency. Older buildings suffer most. Whether the external temperature infiltrates the building through the building fabric or windows, the equipment has to work harder and expend more power to achieve the same results.
Pinpointing the source of an issue like this is typically challenging because multiple variables are at play.
Depending on what decision-makers upgrade, fix, or improve, they can also optimise airflow patterns, reduce electricity usage based on hybrid occupancy, improve sustainability and enhance occupant satisfaction.
What facility managers can do with that data
While facility managers do not have the benefit of designing a new and improved building from the ground up, their design changes can still significantly impact if they factor in the correct variables.
Ultimately, building specific improvements are best since factors like building envelope integrity, location, occupancy level, altitude, equipment efficiency and seasonality influence outcomes.
A commercial audit can unlock valuable insights
There is not a one-size-fits-all solution for decarbonisation, as different solutions work for different building types, and climates, but three key priorities stand out for creating a zero-carbon dioxide emissions buildings sector:
1. Electrification replacing fossil fuels: Decarbonising heating is essential. Currently, gas and oil heating accounts for 8% of global emissions, or 3 GtCO2. Switching from fossil-based heating to cost-effective electric and efficient technologies, such as heat pumps, is crucial and must be accompanied by the continued decarbonisation of electricity generation. By 2050, 80% of the energy used in buildings could be electricity; this would bring annual emissions from building use close to zero if electricity supply is decarbonised by then.
2. Dramatically improving energy efficiency: Rising use of air conditioners and the electrification of heating would result in electricity demand for buildings almost tripling, from 12,800 TWh to around 35,000 TWh by 2050 if energy efficiency is not simultaneously increased. But this could be reduced to around 18,500 TWh via a combination of:
• Improvements in the technical efficiency of heat pumps, air conditioners and other appliances.
• Improvements in the energy efficiency of both new and existing buildings, considering a range of so-called “passive heating and cooling” building design techniques, such as insulation and green roofs.
• Smart building management systems and choices which avoid wasteful use of heating or cooling. These improvements, together with the deployment of building-level batteries and other energy storage, smart building control systems and rooftop solar generation are particularly important for reducing the growth of peak electricity demand, which is a crucial driver of electricity system costs.
3. Constructing efficient and low-carbon buildings: Constructing new buildings accounts for 7% of global emissions a year, or 2.5 GtCO2. If the average carbon intensity of construction remains unchanged, this expansion would result in a global cumulative 75 GtCO2 emissions between now and 2050.2 These cumulative emissions could be reduced to around 30 GtCO2 via a combination of:
• Decarbonising the production of steel, cement, concrete and other building materials.
• Using fewer materials in building construction via lightweight design and modular construction or using less carbon-intensive materials such as timber.
• Better utilising existing buildings via extended building lifetimes and shared working spaces.
“Decarbonising the buildings sector is a story of many transitions,” said Adair Turner, Chair of the Energy Transitions Commission. Turner continues. “It’s vital for our climate goals and it’s an opportunity to improve living standards and reduce energy costs. Electric heating technologies will significantly improve air quality and have lower running costs than gas heating and traditional use of biomass.”
Complex Building Decarbonisation Challenges
Implementing some of the decarbonisation options for buildings poses more complex challenges than faced in other sectors of the economy. For example:
• For existing buildings, commercial building owners can choose from many different low-carbon technologies and options to improve the energy efficiency, some of which can be disruptive and involve high upfront costs (e.g., roof or wall insulation, new windows, higher-efficiency heating and ventilation systems). The availability and cost of finance vary greatly.
• For new construction, specific optimal solutions vary by building type and there are sometimes trade-offs between designing to minimise construction emissions versus in-use operational emissions. In addition, the construction sector often entails complex value chains of subcontracting and a large role for SME’s. Careful design and implementation of building design and construction codes, but tailored to specific circumstances is therefore vital.
Despite an increased push for sustainable building practices, over 37% of industry leaders currently exclude HVAC systems from their efficiency or carbon reduction plans, according to a new study. The survey of building developers, owners, operators, and general contractors reveals a critical gap in strategies aimed at lowering energy costs and environmental impact and provides insights into the complex dynamics influencing HVAC decisions and the potential benefits of adopting smart building technologies.
Here are some key findings from the survey:
• 37% of building professionals do not include HVAC systems in their current plans for improving efficiency or reducing carbon impact.
• Top challenges in HVAC implementation: Installation, cost and maintenance were identified as the most significant hurdles in HVAC adoption.
• Interest in smart technology: 61% of respondents expressed interest in AI-driven solutions to boost energy efficiency in their projects.
• Impact on property value: Over 82% of participants agreed that investing in energy-efficient upgrades could increase property value.
This research comes as commercial property owners face rising utility costs and growing demand for sustainable building practices. In light of these challenges, many industry professionals recognise the value of smart technology and AI as pivotal tools for enhancing operational efficiency, cutting costs and improving occupant comfort.
Financing – who pays?
Commercial real estate, which includes offices, retail and hospitality, is proving to be a stumbling block for decarbonisation. There is limited clarity as to who has the responsibility and means to decarbonise.
With around 2 million commercial buildings in the UK. What is preventing us from decarbonising them?
One of the biggest challenges is the variety of ownership and leasing structures within the commercial sector. UK commercial leasing provides significantly less tenant-protection than residential leasing. This allows for a larger degree of flexibility in the resultant agreements which define the responsibilities of landlords and tenants when it comes to building improvements and energy supply.
Many of the lease arrangements fall under the ‘Low’ and ‘Medium’ owner control categories. Landlords are therefore struggling to pursue decarbonisation across their property portfolio, with considerable input and cooperation required from tenants.
This means, in many instances, the only option for pursuing decarbonisation is at the point of let (i.e. the end of a tenancy period), as retrofits, heat pumps and onsite renewables can be installed between tenancies, or, if the tenant remains the same, there is logical grounds for building improvements to be made.
However, another legislative obstacle presents itself because leases protected by the provisions of the Landlord and Tenant Act 1954 (“a 1954 Act lease”) give tenants the right to renew the lease on the same terms as the previous lease. This restricts the landlord’s ability to update the lease to incorporate decarbonisation, as the tenant can argue that these measures are not suitably similar to their previous rental agreements. Retrofits, in particular, will be disruptive for tenants, explaining why this is not a straight-forward challenge and why tenants might be hesitant.
Fixing a broken building
There are ongoing government consultations which, if realised, will place obligations on both landlords and tenants to implement decarbonisation measures. These measures focus on energy efficiency, public disclosure and low-carbon heating, but do not go far enough to address the issues of control and responsibility at the heart of commercial leasing.
The government confirmed in the 2020 Energy white paper that minimum energy efficiency standards (MEES) for the commercial rental sector will be EPC B by 2030 (compared to EPC E today). When these regulations came into force, landlords are responsible for ensuring their properties are compliant and can be issued fines by local authorities for non-compliance.
May 2022 saw the launch of the industry-led UK Net Zero Carbon Buildings Standard, which aims to assess and certify buildings in line with science-based net-zero targets. One member of the Standard’s Technical Steering Group, the Better Buildings Partnership (BBP), has separately established a climate commitment which requires commercial property owners to set out 2050 net-zero pathways.
The BBP climate commitment specifically targets property owners. For example, it requires signatories to “disclose the EPC’s of their portfolios” and it is aware that “Members of the BBP have diverse portfolios with different ownership and leasing structures, management arrangements and occupiers – how we implement these commitments within our businesses will differ.”
Because of the complications surrounding different lease types and different levels of ambition among tenants, the Commitment adopts a ‘comply or explain’ approach, accepting that signatories may not be able to measure and reduce GHG emissions for their whole portfolios.
So, on the one hand we have some promising government policy aiming to decarbonise commercial buildings, and on the other hand we have members of the private sector showing real leadership to go beyond what is legislatively required of them.
Building a low-carbon future
Only some landlords and tenants are targeting Net Zero, and decarbonisation has upfront costs. Landlords who pursue Net Zero will likely have to charge tenants more, putting them at a competitive disadvantage over landlords who do not pursue Net Zero.
Tenants are increasingly interested in net-zero properties, but they face financial constraints, put into sharp focus with the current cost-of-living crisis, meaning that the market demand for net-zero rental properties is not there yet to reward ambitious landlords.
Here are four policy recommendations that could bring about the change required. These are:
• To go beyond EPC B and mandate emissions reductions aligned to 1.5°C global warming across the non-domestic private rented sector. Without this clear commitment, ambitious landlords and tenants will continue to be unable to pursue decarbonisation and action will continue to be delayed.
• To define who is responsible for decarbonisation. In most instances, the obligation to decarbonise buildings should fall onto landlords as they are the party with the means to decarbonise. Given that there are fewer landlords than tenants in the commercial sector, this approach also simplifies policy implementation by reducing administrative burden.
However, for leases with low owner control, where landlords do not have the means to decarbonise within net-zero timescales, a different approach will be required. For these properties, it may be that the obligation to decarbonise is passed onto the tenant, or that the tenant is obliged to co-operate with the landlord.
• To determine how costs are distributed between landlords and tenants. In most instances, landlords will need a cost recovery mechanism to pay for decarbonisation and this will either come from increased rent prices or external private/public finance.
• To explore innovative financing mechanisms to ensure access to finance and short-term action. In the short term, the government should explore innovative financing mechanisms, to encourage actions that decarbonise commercial buildings. Blended private and public finance can provide upfront capital in the form of medium – to repayment loans to landlord/tenant collaborations for those tenants on longer-term leases.
• These tenants have a vested interest in the long-term maintenance of the property and will recover some of the cost through decreased future energy bills. Other innovate policy measures should be sought for short-term tenants to ensure decarbonisation is not delayed.
Decarbonising the commercial sector will require people to be willing to change; it will require a shift in mindset to one of action, change and just do it.
