Paying bills is never fun, and it’s even more painful when the costs are rising.
“Right now, we are spoilt by low electricity prices,” says Poyan Rajamand, Co-founder and CEO of Barghest Building Performance (BBP), a startup which uses analytics to cut energy consumption.
Singapore, where BBP is based, will introduce a carbon tax on power generators from 2019, and this will lead to higher electricity prices, economists predict. “Sooner or later you will see the true price of electricity, which includes also the environmental impact,” he says.
GovInsider sat down with Rajamand to discuss how data can help cut energy costs and the new business models disrupting the energy industry.
‘Do more with less’
With the rising costs of electricity, “what we suggest is to do more with less”, Rajamand says. BBP uses sensors, data and algorithms to improve the efficiency of existing energy systems in large commercial and industrial buildings. It focuses particularly on air-conditioning, which is responsible for 60% of electricity consumption in these commercial buildings.
“What we suggest is to do more with less.”
Singapore has set targets on carbon emissions and energy consumption of buildings. The government has set standards to rate buildings on their energy efficiency through a scheme called GreenMark. It aims to have “at least 80% of the buildings in Singapore to be green by 2030”, according to a masterplan.
However, the challenge here lies in buildings with older infrastructure, he says. “Making new buildings green and sustainable is somewhat less of a challenge than getting this massive stock of existing buildings to become more green,” Rajamand says.
BBP fits buildings with sensors and uses its data to optimise the way existing cooling systems run. “Each piece of equipment is continuously balancing, reacting to what is happening inside the building or production line, as well as the outside weather,” he explains.
For instance, BBP helped Philips save $500,000 in annual energy costs on a 14-year-old cooling system in a Singapore factory, and improved its efficiency by 27%. The traditional option would have been to replace the whole system at a much higher cost, estimated to be $8-10 million.
A changing industry
As companies with new services begin work on real estate, they face what has traditionally been a “conservative” industry. “People or companies with heavy analytics capabilities are moving into a market where the players were fixed for many decades,” Rajamand says. For instance, large software companies like Microsoft are entering this space with their analytics.
“Companies with heavy analytics capabilities are moving into a market where the players were fixed for many decades.”
At the same time, startups are disrupting with new business models. BBP, for instance, does not charge its clients upfront. Instead, “we take a portion of the savings that we achieve,” he says. The company tracks how much energy has been saved; an independent third party calculates the savings; and BBP gets paid a percentage of this. This ensures that customers are not penalised for trying out a new product – if it doesn’t work, they simply do not pay.
This year, BBP has helped cut costs for Resorts World Sentosa, an integrated resort that includes a theme park, hotels, a casino and exhibition venues. The company has just been awarded by the government’s National Environment Agency for this project, which led to 10% improvement in energy efficiency. In general, commercial buildings can annually save “hundreds of thousands” and industrial ones can save “millions of dollars”, he adds.
The public sector can play a crucial role here by helping the building industry keep up with new models, without favouring one particular company. Where there are new entrants in the market, governments can “communicate and help users understand the new products available”, he says.
The Singapore government’s Accreditation@SGD programme is one example of this. It highlights startups with unique technologies and proven models in the tender process. BBP is one among three energy management startups accredited by this programme.
As countries come together to tackle the impact of climate change, we can only expect the costs of energy to rise in the future, Rajamand believes. But companies can take a long-term view by using analytics to prepare themselves.
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