The Institution of Engineers, Singapore (IES) kicked off the World Engineers Summit (WES) 2019 on ‘Engineering Future Cities – Harnessing and Managing Technologies to Improve Quality of Life’ today at the Suntec Singapore Convention and Exhibition Centre. Dr Vivian Balakrishnan, Minister for Foreign Affairs, graced the Opening Ceremony as the guest-of-honour.
The world is at a critical turning point of urbanisation, with about 68 per cent of its population expected to be living in urban areas by 2050. In the face of such unprecedented growth, WES 2019 placed the spotlight on critical and escalating issues such as climate change, pollution and traffic congestion. More than 800 international engineers from around the world have gathered to exchange knowledge, expertise and ideas in using and managing of technologies to build greater sustainability, liveability, economic security and climate resilience for cities.
WES 2019 will feature six topical discussion tracks namely climate change: mitigation & adaptation, connectivity & mobility, sustainable energy, Industry 4.0 & beyond, water and sustainable environment and smart infrastructure.
In addition, for the first time, IES and The Institution of Professional Engineers, Japan, (IEPJ) have joined hands to organise a seventh track that will cover building smart energy and sustainable cities in Asia. His Excellency, Mr Jun Yamazaki, Ambassador of Japan to Singapore, also gave a speech as a guest speaker at the Opening Ceremony.
“WES 2019 will cover a multitude of interests and perspectives with the aim of creating greater momentum and spawning new collaborations amongst engineering communities around the world to engineer sustainable and liveable cities of tomorrow,” said Er. Prof Lim Kok Hwa, WES 2019 Conference Chair.
Cleantech Solar, a provider of renewable energy to corporations in Asia, recently celebrated the launch of an on-site solar PV system for Chip Mong Insee Cement Corporation (CMIC), which owns and operates the most advanced cement factory in Cambodia. The whole system includes a 2.8 MW floating solar power plant deployment on CMIC’s reservoir, and the remaining 7 MW installed across multiple rooftops of the facility.
Through a long-term partnership agreement, the project is expected to generate 297 GWh of clean energy, avoiding 197,000 tonnes of CO2 emissions across the system’s lifetime. The system will contribute to CMIC’s sustainability efforts by substituting a portion of the large plant’s electricity consumption with solar PV.
This will also help CMIC reduce operating costs without having to make the capital investment, nor having to take the performance risk of the solar system. In addition, the deployment of the floating solar system will shield the reservoir from wind and the direct hot midday sun which is expected to reduce water loss through evaporation, contributing to CMIC’s water conservation efforts.
Mr. Meng Leang, chairman of Chip Mong Insee Cement Corporation said, “Here at Chip Mong Insee Cement, we are committed to be a trusted company that is both environmentally and socially responsible. Producing cement in Cambodia to substitute imports creates jobs and opportunities for Cambodians and adopting solar is an additional important step for us to help meet our energy requirements whilst at the same time reduce our CO2 emissions. We have selected Cleantech Solar based on their extensive track record, strong technical as well as financial capabilities. This, together with our shared values on safety and quality, has delivered a very successful solar project and solidified our partnership with Cleantech Solar.”
Mr. Raju Shukla, Cleantech Solar founder and executive chairman said, “It is very satisfying to see the state-of-the-art Chip Mong Insee Cement production plant now benefitting from our high-quality solar PV solution that combines rooftop and floating elements. In addition to environmental and social benefits, such as cutting emissions and promoting corporate social responsibility, the economic benefits of sourcing renewables will also include cost savings, long-term price stability and security of supply. We will like to extend our hearty congratulations to Chip Mong Insee Cement on achieving another milestone in their sustainability journey.”
Global pump manufacturer Grundfos showcased its sustainable water and wastewater solutions at the Ninth Regional 3R Forum in Asia and the Pacific, a platform for broad cooperation on promoting the 3Rs – reduce, reuse, and recycle – in Asia.
The forum, which took place from March 4 to 6 2019 in Bangkok, Thailand, was co-organised by the Ministry of Natural Resources and Environment (MoNRE), the kingdom of Thailand, the Ministry of the Environment of the Government of Japan (MoEJ), and the United Nations Centre for Regional Development (UNCRD) of Division for Sustainable Development Goals (SDGs).
The Grundfos team at the Ninth Regional 3R Forum in Asia and the Pacific
This year, the forum’s theme was ‘3R As a Way for Moving Towards Sufficiency Economy – Implications for SDGs’. In line with this theme, Grundfos is showcasing its range of sustainable and energy-efficient products and solutions that have helped customers and communities reduce their impact on the environment, and subsequently addressing global challenges aligned to UN SDGs.
Pia Yasuko Rask, Senior Engagement & Responsibility Manager, Grundfos, said, “The UN has set 17 very ambitious goals, many of which relate directly or indirectly to water and energy. Our resources are limited but demand continues to grow. How do we live large with a smaller impact? How can we use less but gain more?”
“This forum is an incredible platform for key leaders and decision-makers to come together and discuss these issues, and we were excited to take this opportunity to show how technology can make a real difference to the world in this area. Sustainability is in Grundfos’ DNA, and we will continue to build our strategy on the SDGs through our portfolio of sustainable products and solutions.”
Mr. Tsukasa Akimoto, State Minister of the Environment, Japan and H.E. General Surasak Karnjanarat, Minister of Natural Resources and Environment, Thailand visit the Grundfos exhibit at the Ninth Regional 3R Forum in Asia and the Pacific
Forum delegates also learnt about Grundfos’ work, specifically around renewable energy. One key initiative is the Grundfos Lifelink water solutions, which aims to strengthen the quality, reliability and sustainability of drinking water supply in rural and urban communities in developing countries, particularly across Southeast Asia and Africa. Lifelink solutions combine renewable energy, proven pump technology, water treatment and intelligent water ATMs with online water management and a professional service network.
Notably in 2015, to improve access to clean water in rural Thailand, Grundfos Lifelink water solutions worked with the King Mongkut’s Institute of Technology Ladkrabang (KMITL) to test its fully automated AQpure water treatment system, with an aim to turn river water and surface water into drinking water for the residents in 15 Thai villages, meeting the needs of around 30,000 residents.
Grundfos also showcased solar solutions such as SQFlex submersible pumping system, which utilises abundant solar energy to power water supply. The pump system offers the perfect water supply solution in remote areas where the power supply is non-existent or unreliable.
The Red Sea Development Company (TRSDC), wholly owned by the Public Investment Fund (PIF) of Saudi Arabia and creator of The Red Sea Project, announced in September its international Advisory Board of twelve world-leaders in business, tourism, environmental sustainability and conservation.
The Advisory Board will help set The Red Sea Project’s agenda to develop and implement a new international standard in environmental protection and restoration, sustainable development, innovation and luxury tourism. Located along the west coast of Saudi Arabia at the crossroads of the Middle East, Europe, Asia, and Africa, the project is envisioned as an ultra-luxury tourism destination for nature, adventure, wellness, and culture. It is part of Vision 2030, Saudi Arabia’s ambitious blueprint for the future.
“Utilising this group of advisors to guide The Red Sea Development Company is crucial to creating a world-class project of this scale,” said John Pagano, Chief Executive Officer of TRSDC. “The collective expertise of this impressive group will help us to exceed the inspirational goals set for the tourism sector in Vision 2030.”
The members of the Advisory Board will serve multi-functional roles when working with TRSDC’s Board of Directors and Executive Team. They will also advise the Board of Directors of TRSDC, led by His Royal Highness Crown Prince Mohammad bin Salman. Collectively the Advisory Board members will call on their broad experiences to suggest best practices across an array of disciplines; connect potential investors and partners to the opportunities offered by the luxury travel industry—one of the fastest growing global economic segments; and serve as ambassadors of the project to raise its profile globally.
Advisory Board members first met in New York City in March 2018 to provide initial feedback on the project’s direction. They met again in Saudi Arabia in July 2018 to visit The Red Sea Project’s unique marine and land ecosystems, and to provide further input on development and sustainability strategies.
“TRSDC’s Advisory Board is playing a fundamental role in the development of the project,” Pagano said. “The insights and advice that we gather from the Board are extremely valuable in assessing and tailoring the effectiveness of our current plan. This will enable us create something truly unique for our guests and for the people of Saudi Arabia, as we set new international standards for protecting, preserving, restoring and providing access to a unique experience at this site for generations to come.”
The members of the Advisory Board are:
Sir Richard Branson Founder, Virgin Group – Sir Richard is a serial entrepreneur known for his ambitious forays with the Virgin Group, creating eight different billion-dollar companies in eight different sectors. Sir Richard’s experiences building Virgin Hotels, Virgin Holidays, Virgin Limited Edition, and Virgin Airways will inform the strategic implementation of many aspects of The Red Sea Project.
Steve Case Chairman and CEO, Revolution – As the CEO of Revolution, an investment firm dedicated to building “built to last” businesses, Case has established a legacy for creating some of the strongest businesses in history. He revolutionized the Internet through AOL, and negotiated the largest merger in business history. Case will work with The Red Sea Project’s executive team to bring transformative business management to the project.
Philippe Cousteau Jr. Co-Founder and President, EarthEcho International – Cousteau Jr. is a multi Emmy-nominated TV host, author, speaker and social entrepreneur. He advises on best practices for social and environmental sustainable development and through his non-profit, EarthEcho International, prepares the next generation to solve the environmental challenges the world faces.
Carlos Duarte Professor, Red Sea Research Center – Duarte’s leadership in biological oceanography and marine ecology will serve to inform conservation at utmost scientific level. His Red Sea expertise, and versatility as a world-leading marine ecologist, makes him a core part of the environmental protection initiative behind The Red Sea Project.
J. Carl Ganter CEO, Vector Center — Ganter is an expert on water security who focuses on the intersections and impacts of changing water, food, and energy resources globally. His experience with Vector Center’s data analysis, contextualization, and reporting will help guide The Red Sea Project’s leadership on risk identification and mitigation, investment, and environmental and sustainability initiatives.
Paul Holthus Founder, President, and CEO, World Ocean Council – At the World Ocean Council, Holthus is responsible for a global multi-industry leadership alliance blending private sector interests and market forces to develop practical solutions for achieving ocean sustainability. Holthus will advise on best practices in business-led marine environmental management and sustainable development.
Aradhana Khowala CEO & Founder, Aptamind Partners – Khowala’s accomplishments in travel, tourism and hospitality will lend valuable insight into building and scaling the project. Her appreciation for tourism as a force of good will help bring together luxury hospitality and environmental conservation together with community engagement for The Red Sea Project.
Sven-Olof Lindblad CEO, Lindblad Expeditions – Lindblad’s experience in building world-class expeditions, particularly marine-focused trips aboard intimate ships, is an excellent resource for The Red Sea Project. Lindblad’s work with National Geographic and his understanding of cultural nuance in remote regions of the world will help inform the project’s vision, development planning and guest experiences.
William McDonough Founder, William McDonough and Partners – McDonough brings a wealth of experience relating to environmental design and sustainable development. McDonough is a leading environmental thought leader of our time, the co-author of Cradle to Cradle: Remaking the Way We Make Things, and a strategic advisor to many of the world’s largest firms. He brings invaluable perspective to all environmental facets of the project.
Frits Dirk van Paasschen Senior Advisor, TPG Capital – Investment and business expert, van Paaschen has a strong understanding of consumers’ mindset, industry disruption and sustainability. His experience as the former CEO of Starwood Hotels and in the C-suite of various Fortune 500 companies will provide important counsel to The Red Sea Project.
Vijay Poonoosamy Director of International and Public Affairs, QI Group – Poonoosamy is also President of the Hermes Air Transport Organisation. He started his career as an Aviation Lawyer in London, was the Managing Director of Air Mauritius, the Executive Chairman of Airports of Mauritius and the Vice President International and Public Affairs of the Etihad Aviation Group. He has served on the Board of Directors of the US Travel Association, the Board of Governors of the International Aviation Club and as Chairman of IATA’s Industry Affairs Committee. Poonoosamy will be vital for planning transportation to the Red Sea.
Sonu Shivdasani CEO and Joint Creative Director, Soneva – Often referred to as the founder of Six Senses, Shivdasani is an experienced hotelier who has built and prepared some of the most luxurious and environmentally pioneering hotels in the world. Shivdasani’s work in addressing environmental challenges for imaginative projects will provide valuable counsel to The Red Sea Project to steer it in an environmentally conscious direction.
Southeast Asia’s future is tied to the fate of its cities. Today the region’s urban areas are home to one-third of its total population but generate more than two-thirds of the region’s GDP. Urbanisation is fueling economic growth, but the breakneck pace has left many cities struggling to provide adequate housing, infrastructure, and services to meet the needs of a surging population.
While the urban challenges across Southeast Asia have been growing in scope, new technologies that could tackle some of these issues have reached maturity. Smart cities in Southeast Asia, a new report from the McKinsey Global Institute (MGI), in collaboration with the Centre for Liveable Cities in Singapore, finds that cities across the region can incorporate data and digital technologies into infrastructure and services—all with an eye to solving specific public problems and making the urban environment more livable, sustainable, and productive.
The research, which studies dozens of current applications, finds that cities in the region could use digital solutions to improve some quality- of-life indicators by 10-30 percent. It expands on global research released last month by MGI on how the current generation of smart city technologies can perform in a variety of urban settings worldwide.
Smart Cities are Poised to Have Significant and Broad-based Impact in Southeast Asia
Cities across Southeast Asia are primed to take advantage on smart solutions. Dozens of smart solutions are available today focusing on every domain of city life: mobility, social infrastructure, the built environment, utilities, security, community, and the economy.
As they begin their smart transformation, each city is setting its own priorities regarding which ones to deploy. MGI finds that smart cities could have a substantial impact across Southeast Asia to deliver a better quality-of-life. Among its findings:
Smart solutions could remove up to some 270,000 kilotons of greenhouse gas emissions annually.
Some 5,000 lives lost each year to traffic accidents, fires, and homicides could be saved through mobility solutions, crime prevention, and better emergency response.
Intelligent traffic and transit solutions could save up to 8 million man-years in annual commuting time.
Deploying smart healthcare solutions for the urban population could reduce the region’s disease burden by 12 million disability-adjusted life years—in other words, not only extending overall life expectancy but adding years of good health.
By creating more efficient and productive environments for business and hiring, Southeast Asia could add almost 1.5 million jobs. Residents could also save as much as $16 billion annually as smart solutions contribute to better housing options and lowering energy bills.
The current generation of smart applications can help cities make significant or moderate progress toward meeting 70 percent of the Sustainable Development Goals.
“Urbanisation can propel Southeast Asia to the level of economic and human development, but only if growth is managed well,” said Jonathan Woetzel, Senior Partner and Leader of McKinsey’s Special Cities Initiative. “Cities need to act now to address growing environmental stresses and particularly to combat climate change and improve their resilience.”
Rooting Digital Solutions in Southeast Asian Realities
There is already a wave of innovation across the region. It includes digital citizen apps, homegrown ride-hailing apps, data-driven transit planning, intelligent traffic systems, data-driven disaster risk assessment, advanced construction techniques, smart energy meters, and much more.
Low-income cities may be able to jumpstart progress by creating open data portals, which make raw information available for private-sector innovation that does not require any public investment.
The report notes that private-sector companies that find ways to contribute to the public good and expand choices for urban residents can find substantial market opportunities across Southeast Asia. MGI estimates that smart mobility applications could create up to $70 billion in value, while opportunities to make the built environment smarter could be worth more than $25 billion.
But the report cautions that companies with aspirations to become urban solution providers need to navigate a dynamic and complex ecosystem. Companies need an intimate understanding of a city’s context so they can anchor their offerings and value proposition to the real needs of residents, and they may need to add new government relations capabilities.
Bold Action Required by Public and Private Sectors
A smart city starts with a smart strategic vision and goals. While it is important for city governments to outline a vision for the future, the rapid pace of technological change means that they have to retain some flexibility to experiment and recalibrate.
Taking a data-driven approach that continually measures progress against clear quality-of-life goals can guide that process. Cities also need to consider how to pair smart technologies with complementary policies and investment in hard infrastructure.
“Cities facing tough budgetary choices will have to prioritise the practical over the flashiest new technologies,” said Mukund Sridhar, Partner and Leader of McKinsey’s Infrastructure Practice in Southeast Asia. “Installing digital systems behind the scenes to manage traffic, coordinate networks of hospitals, or cut down on bureaucratic paperwork may yield more impact than highly visible touchscreens on the street.”
Neither the public nor the private sector can build smart cities alone. City governments will have to continue providing many critical services, but they do not have to fund and operate every type of service and infrastructure system. Smart cities will change the parameters of how cities across Southeast Asia approach public-private partnerships.
Despite their varied starting points, priorities, and capabilities, cities across Southeast Asia can cooperate to deploy smart solutions on a much bigger scale. The most advanced cities may be able to assist others in developing technological capabilities and specific apps, but it will also be valuable for the region’s lower-income cities to share with each other what they are learning about where digital innovation can yield the greatest impact. Green shoots are already visible, and the recently launched ASEAN Smart Cities Network can provide a vehicle for accelerating progress.
McKinsey Global Institute Media release | Page 3 The report will be available for download at www.mckinsey.com/mgi
Pump manufacturer Grundfos has launched its new generation of CR pumps – which exceeds current energy efficiency limits for multi-stage in-line pumps. Grundfos’ renowned range of CR pumps are the world’s first vertical multistage centrifugal inline pumps, which line up pump pressure and pump suction port in a straight pipe.
The centrifugal CR pumps can transport corrosive, hot, and high-pressure liquids used across various applications including water supply, water treatment and almost all industrial solutions.
The new generation of Grundfos CR pumps introduces three new flow sizes (CR95, 125 and 155) and increases the maximum water flow to 220 cubic metre per hour.
Gary Flanagan, Regional Product Manager – Multistage, Grundfos Asia Pacific Region said the pump manufacturer is dedicated to continuous development and innovation to ensure that this new generation of CR pumps is meeting the evolving needs of industries in Asia and globally.
“The world has changed in many ways since the CR was first introduced many years ago. But our drive to set new standards for our customers has always remained the same. That is why we are so proud to announce the launch of this new generation of Grundfos CR pumps.
“Today, our new CR pump design features a full range of sizes and literally millions of customised solutions to suit the specific needs of companies and engineers.”
Based on extensive research, development and testing of new hydraulic designs, the CR pump is engineered using state-of-the-art production methods – including a fully automated and flexible production line.
Gary Flanagan added, “As industries in Asia expand to meet the growing consumption demand of the region, they need to take a smarter manufacturing approach to make sure their industrial processes are able to produce more with less, while reducing energy consumption and limiting their carbon footprint.
“Sustainability is a very important part of Grundfos’ DNA and we aim to create cleaner and more energy efficient technologies to help our customers reduce their carbon emissions, in line with the Paris Agreement commitments.”
Green School Bali students and friends are one step closer to getting their campus off the grid, with the support of Sunseap, one of the largest clean energy solutions providers in Singapore.
Sunseap, a Singapore-based solar developer, generously donated PV solar panels that will power one of the world’s greenest maker spaces: The Green School Community Innovation Hub. The “iHub” is a green, rapid prototyping facility that is changing the face of education, and is where inspiring entrepreneurial problem solving, student ideas are incubated, tested, rethought, refined, and finally brought to life, under the guidance of the community, visiting entrepreneurs, local artisans and teachers.
Mr. Rob Khoo, Vice President of Marketing and Communications at Sunseap Group, said: “Sunseap is delighted to support Green School Bali in its efforts to go green. This donation is part of Sunseap’s corporate social responsibility initiative to help people in the region become more aware of the impact of their daily activities on the environment and how they can switch to renewable energy sources to reduce their carbon footprint.”
Sunseap’s donation puts the power into the hands of young people to be the change makers they want to be. This project represents the entrepreneurial mind-set and collaborative problem solving that are the hallmarks of both Green School and Sunseap.
In combination with micro-hydro turbine on the banks of the local river, this gift of solar panels will expand an existing solar array on campus, adding another exciting element to the student-driven energy sustainability project “Operation Rain or Shine”. The ultimate goal of Operation Rain or Shine is to become a model of renewable energy production and storage for the school and local community—a showcase of resilient and reliable clean energy. The hybrid renewable energy micro-grid will now be expanded through the generous support of Sunseap.
Singapore has, in recent years, been recognised as a highly attractive market in the world for infrastructure investment.
Microsoft Corp. recently announced a new agreement with Sunseap Group that marks Microsoft’s first clean energy deal in Asia and will create the single-largest solar energy portfolio in Singapore to date.
This 60 megawatt-peak (MWp) solar portfolio will span hundreds of rooftops across the nation. This is the largest rooftop solar project in Singapore and the first rooftop solar portfolio in the country focused on serving datacenter energy consumption.
“Our cloud services are helping to power Singapore’s digital transformation, and today’s agreement will ensure that transformation is increasingly powered by clean energy,” said Kevin Wo, managing director, Microsoft Singapore. He added: “We’re proud to work with Sunseap, the leading solar provider in Singapore, to support the growth of the local clean energy economy. With the agreement, Microsoft will improve the sustainability of our local operations and make important progress toward our corporate sustainability goals for datacenters.”
The investment in local solar energy builds on decades of Microsoft investment in Singapore and throughout the APAC region. Since it began operations in Singapore in 1990, Microsoft has sought to create local opportunity, growth and impact and supports the government’s efforts to make Singapore a smart, green and liveable city. Singapore is also home to Microsoft datacenter services that deliver Microsoft Azure, Office 365 and numerous other cloud services for customers.
Lawrence Wu, co-founder and president of Sunseap, said, “We see exciting potential in our partnership with Microsoft to raise awareness within the tech industry of the importance of adopting renewable energy solutions. Their investment in Singapore solar indicates a growing momentum for clean energy in the country and will further the positive ripple effect for organizations in Singapore to incorporate sustainability practices in their businesses.”
Through a 20-year agreement, Microsoft will purchase 100 percent of the renewable energy attributes exported to the grid. This landmark agreement also marks progress for Singapore in the renewables sector. The agreement also solidifies Sunseap’s unique position in the energy markets.
“This deal is Microsoft’s first renewable energy deal in Asia, and is our following two wind deals announced in Ireland and The Netherlands in 2017,” said Christian Belady, general manager, Cloud Infrastructure Strategy and Architecture, Microsoft. “We’re on track to exceed our goal of powering 50 percent of our global datacenter load with renewable energy this year. Once operational, the new solar project will bring Microsoft’s total global direct procurement in renewable energy projects to 860 megawatts.”
Hong Kong leads the world for sustainable transport, according to the 2017 Sustainable Cities Mobility Index from Arcadis, a global design and consultancy for natural and built assets. The index was compiled for Arcadis by the Centre for Economic and Business Research (Cebr) and explores mobility through three pillars of sustainability – social (People), environmental (Planet) and economic (Profit) – to develop an indicative ranking of 100 of the world’s cities.
Boosted by its innovative and well-connected metro network and a high share of trips taken by public transport, Hong Kong manages to achieve many of the aims of an effective urban transport system – enabling comprehensive mobility, creating economic opportunity and enriching the lives of citizens, business and tourists alike.
Cities benefiting from ‘money, mass or maturity’, namely high wealth, significant global cities, do not necessarily lead the ranking in sustainable urban mobility. Although these factors can help, we do see wealthy, large and/or older cities not automatically punching their ticket to sustainable urban mobility.
Aside from Hong Kong, two other Asian cities rank highly, taking two of the remaining top ten spots and matching the results of the 2016 Sustainable Cities Mobility Index. Modern metro systems, large airports and low usage of private vehicles help boost the rankings of developed Asian cities such as Seoul (4th) and Singapore (8th). It is however, a tale of two halves in Asia as other cities would score higher were it not for damaging levels of urban pollution and emissions while metropolises such as Hanoi and Kuala Lumpur are some of the world’s least sustainable for mobility.
European cities dominate the top of the overall Index, occupying seven of the leading ten spots. Zurich, Paris and Prague are the highest placed European cities, ranking second, third and fourth respectively, with strong scores in the Planet and Profit sub-indices due to established infrastructure, efficient metro systems and commitment to green technology.
North American cities are spread throughout the overall Index; while citizens of some American cities enjoy well-funded and comprehensive transport systems, many cities in the U.S. and Canada are undermined by a reliance on private vehicles and underdeveloped public transport options.
A revolution in the construction and maintenance of buildings of the future is not being adequately reflected in traditional Return on Investment (ROI) business cases, and according to a new report by global engineering and infrastructure advisory company Aurecon, this is blocking important forward looking design innovations and significantly damaging the future value of major building investments.
The short term focus on start-up and construction costs is denying investors and building owners access to the design innovations that are increasingly key to the construction of digitally smart, ‘intelligent’ buildings which are able to use technology to dramatically improve operational efficiencies, employee productivity and reduce maintenance costs.
In a recent white paper released by Aurecon, titled ‘Buildings of the Future: bottom-line benefits’, a new narrative around the ROI of intelligent buildings is explored to demonstrate the crippling effect that a short-term focus on start-up and construction costs often has on design innovation.
According to Aurecon, the property and construction industry is evolving dramatically as digital disruption, changed building practices and the need to respond to climate change and reduce energy consumption impact the sector. Yet many building owners and investors are locked into relying on more traditional ROI metrics, designing for the short term while ignoring the importance of designing buildings for the longer term.
The company has called for a new ROI model which accounts for financial as well as non-financial benefits such as improving employee productivity and well-being, while maintain design flexibility to plan for a rapidly changing future.
Aurecon’s experience highlights that while Buildings of the Future have marginally higher start-up costs (2 to 6 percent more expensive than traditional buildings) in the short term, they can deliver significant savings, with a good ROI being achieved quickly (six months to two years) if focus is given to heating, ventilation, air conditioning (HVAC), lighting and some types of electrical loads, with a reduction in operating costs against traditional buildings of between 10 and 50 percent.
Their experience also points out reductions in maintenance costs of between 8 and 12 percent, the increases in employee productivity of 10 percent, and the ability of landlords to charge 5 percent more for premium property rentals of these innovative new buildings.
“To provide a more accurate ROI analysis on Buildings of the Future, a three-dimensional approach is needed – one which presents the elements of design as interconnected pieces of a living and dynamic puzzle,” explains James Bennett, Aurecon’s Managing Director – Built Environment.
“Buildings of the Future must be designed to meet future expectations, while avoiding wasted space, inefficient designs and inflexible storeys. The paper explores why and how our thinking around ROI needs to evolve in line with this,” comments Peter Greaves, Aurecon’s Buildings of the Future Leader.
Long-Term Thinking
Aurecon calls for a ROI model that reflects the importance of designing buildings for the long term and looks at both the financial and non-financial benefits of intelligent buildings, such as improving employee productivity and wellbeing, while maintaining design flexibility to plan for a rapidly changing future.
Long-term thinking can help companies avoid potential disruption. The importance of designing for the longer term and for changing space requirements was never better illustrated than when well known architect Norman Foster admitted that he had got it wrong with Apple’s Campus 2 and its massive underground carpark for 11 000 cars by not allowing for retrofitting into habitable spaces as garages become less important and transportation patterns evolved.
Legislation can also present significant disruption for those who don’t invest in the right tools and methodologies from the outset. For example, the European Commission is currently proposing a voluntary scheme for rating the ‘smart readiness’ of buildings. The scheme, which is expected to be adopted by the end of 2019, will include the development of a
Smart Readiness Indicator (SRI), which will measure a building’s capacity to use ICT and electronic systems to optimise operation and interact with the grid.
The Changing Nature Of Construction “The changing nature of construction design and materials also plays an increasingly significant role in ROI. We are seeing an evolution in construction and maintenance with prefabricated construction, automated technology such as robotics to install it and additive printing, which drives down short -and long-term costs,” says Bennett. The ROI on a 3D printed building, for instance, is almost immediate, with its parts integrated into a digital model of the building that makes maintenance very easy. Beyond construction and maintenance, these embedded digital parts also capture and monitor consumption and usage to optimise building performance over the long term.
A Holistic Approach According to Aurecon, based on these non-financial factors, Buildings of the Future demand a more robust evaluation of their ROI.
Intelligent buildings are the quintessence of future-ready architecture, but their true value lies in innovation and a shared vision, which necessitates moving away from old, one-dimensional models of measuring ROI, to synergetic models that encourage and thrive on collaboration throughout the entire lifecycle, starting at the design stage.
“For Buildings of the Future, idealistic future-focused models are necessary to measure value. Instead of spending too much time trying to demonstrate the financial ROI of intelligent buildings”, Greaves says, “We should rather be asking, what will the cost be of not innovating?”