HVAC is the whole system of space heating, cooling and ventilation, commonly known as air conditioning. HVAC has conquered the built environment since its invention at the turn of the 20th century. In Asia, space heating and cooling have seen most of its growth in just the past 20 years. Much of this is due to economic growth in the region. Workforces in China and Southeast Asia are becoming more educated and moving toward white-collar office work. These workers expect a certain level of comfort in their working environments, leading towards full-time space cooling in offices.
By the end of this decade, 95% of non-residential building space in China is projected to be cooled. The growing demand for air conditioning is creating enormous costs for businesses and taking a huge toll on the environment through emissions.
HVAC energy impact
Space cooling and heating have a significant carbon footprint, and the numbers are striking. Currently, buildings account for nearly 25% of all primary energy use and emissions in China and ASEAN. That number is projected to reach 35% by 2030. Of those emissions, over 40% are generated by commercial and industrial HVAC.
Historically, electricity costs in Asia have been comparatively low, and there have been fewer regulations regarding emissions. However, that is changing. At the same time, workers are now considering factors such as carbon footprints when they look for employers. In turn, many tenants are looking for more efficiently managed buildings.
Even if building owners weren’t motivated by sustainability (although many now are), there are pressures that they now cannot ignore. Governments in Asia are increasingly rolling out regulations that penalize companies for their carbon impact. For example, China’s recent 2030 and 2060 initiatives to reach peak emissions and carbon neutrality, respectively.
At the same time, building owners are facing a growing amount of pressure from tenants who demand energy and environmental plans. In a recent survey by the Building Owners and Managers Association (BOMA) China, 68% of companies consider energy and environment management as “very important,” while another 31% said it was “somewhat important.”
There is also pressure on businesses and buildings from investors demanding lower carbon operations. ESG investing is growing in popularity in Asia. To continue attracting investment, companies and building managers will need not only to reduce carbon footprints—they will need to do so in a documented and transparent way.
Despite the pressure from cost and growing regulation, many companies are currently struggling to find a path towards energy efficiency. Today, somewhere around 80% of industrial and commercial buildings aren’t doing anything to optimize HVAC usage and pay the price. Industrial and commercial buildings will need to take serious action to remain competitive and compliant in the future.
That is why companies are increasingly turning to technologically driven solutions for efficiency.
What causes HVAC inefficiency?
There are two primary causes of HVAC inefficiency: technical causes and human causes. Technical causes include:
- Delayed response time between thermostats and sensors, which leads to overproduction of chilled air.
- Lack of technical setup to track factors such as room occupancy and external weather conditions.
Human causes can include:
- Lack of understanding of how HVAC systems work and where they are wasteful.
- Inattention – for instance, employees forgetting to turn off the AC after work or meetings, leading to energy wasted cooling an empty space.
- Occupants changing the temperature, which puts added strain on the chillers and boilers.
Optimizing HVAC systems solves both of these problems. It gives building managers a way to maintain comfortable conditions for occupants while reducing both costs and environmental impact. The best part is the first phase only takes as little as one month without interfering with daily operations.
How does HVAC energy efficiency optimization work?
HVAC optimization is a solution that integrates AI, IoT and other technologies with human expertise to create smart and responsive environmental controls. The first step is to work with a team of experts who can audit your current system and set up a baseline by which to measure results. Then, the engineers get to work installing IoT sensors inside and outside the building. The sensors will collect data – such as room occupancy and weather conditions – and send it to a digitalized management platform in real-time. Finally, the platform uses AI logic (or machine learning) to take control of installed HVAC assets such as chillers and fans, automating some or most degree of their functioning, based on real-time IoT data.
One critical point in HVAC optimization is knowing what to look for. Many companies have fallen into the trap of collecting too much data without a well-defined focus, resulting in an unusable data swamp. Knowing what to exclude is probably as important as knowing what to include. This is where it is critical to carefully set parameters and work closely with energy and data experts to ensure your system is properly set up to deliver actionable information.
At this stage, the full power of the smart HVAC system starts to show results. The system becomes even more intelligent through usage, adapting and optimizing from the growing pool of historical data it has collected. The system gathers information from day to day, month to month and across seasons. The electricity used over time is known as the load curve. With this data, the system can do more than just react more quickly; it can predict and preemptively optimize HVAC usage.
After this setup, businesses can expect to see an average of 17% in energy savings. However, companies and building managers looking for even higher savings and efficiency have a further opportunity to do so.
HVAC efficiency upgrades
One advantage of HVAC optimization (or a light retrofit) is that it can be performed quickly on existing equipment. But, after initial optimization, there may come a time when it becomes more cost-effective to upgrade. Using the load curve data generated from the smart HVAC system, engineers can put their expertise to work planning an HVAC upgrade (or a deep retrofit). They can recommend the ideal low carbon assets or equipment, such as chillers, air/ground source heat pumps, cooling storage and beyond.
Furthermore, the precise data gathered from the smart HVAC system removes all guesswork. Engineers use the data to see precisely how performance would change by replacing a piece of equipment. They can even use the data to plan the right moment to go in and replace equipment with minimal interference to building operations.
Businesses that upgrade HVAC systems this way can see extraordinary results. Compounded numbers between the smart system and asset upgrades can easily reach a 40% reduction in energy use from the baseline by integrating super low-carbon equipment.
If HVAC optimization is so great, why don’t more companies do it?
Recent research shows that while the industrial sector takes energy management seriously, buildings only accounted for 18% of energy management contracts (EMC) from 2011-2016. Part of the reason is that there are greater potential energy savings in the industrial sector, while another factor is budget. Many building or site managers may not have the up-front capital to pay for optimization or upgrades, even if it is costing them down the line.
However, that situation is likely to change soon. Recently, there has been higher support for subsidy policies favoring buildings. Secondly, financing methods such as EMCs or financing-plus-operation contracts such as Energy as a Service (EaaS) are becoming more familiar in the market. As China’s building owners become more educated about the value of these solutions, more and more will choose to optimize.
HVAC energy efficiency optimization in summary
Asia’s energy market is changing rapidly as economies develop. Buildings are using more and more energy to cool and heat their space, leading to growing emissions and costs. Simultaneously, there is pressure from the government and stakeholders in reducing carbon footprints and increasing energy efficiency. As heating and cooling account for nearly half of a building’s energy use, HVAC optimization is a great place to start cutting costs and carbon. Today that process can be done without any significant interruption of operations.
More than ever, there are a variety of ways to finance those projects and even include long-term operations inside a single contract. As the market becomes more aware of these solutions, HVAC optimization will only gain in popularity as an answer to growing financial and regulatory pressures.