Commercial property

Business real estate must “prepare” for the energy transition.

Good intentions can be difficult to translate into practical action, but that’s what the commercial real estate industry needs to do to achieve global net-zero carbon goals.

The building sector represents more than 20% of global energy consumption and is recognized as one of the sectors for which the transition is not so simple, because either they lack technology or their cost remains prohibitive, in a perspective of climate neutrality.

The electrification of buildings is seen as a possible route to climate neutrality. Electrifying processes, systems, technology and equipment in buildings, while simultaneously transitioning the electricity mix to renewable energy sources, can drive the emission reductions needed in this sector.

Taking inspiration from the EU’s Fit-for-55 legislative programme, developers and building owners must soon start complying with new or updated regulations to reduce carbon emissions, which have been put in place by different countries.

Maintaining the value of buildings by preparing them for a fossil-free future can be a great buy for potential tenants with the growing transition to green energy solutions. The government of Kenya, for example, is committed to building housing to Design Excellence for Greater Efficiency (EDGE) standards. This is the globally accepted minimum standard for designing climate-friendly homes. According to Architecture 2030, today’s non-green buildings generate almost 40% of the world’s annual carbon emissions.

Another immediately attractive outcome is the potential for rapid and permanent reductions in energy costs that can be achieved by developing a sustainable commercial power strategy to support on-site renewable energy generation, energy storage, etc.

It is clear why the concept of “energy transition” is gaining ground, with legislation and regulation, both inside and outside the EU.

Develop a fitness strategy

Regulatory timelines are important for both new construction planning and renovation planning. In our experience as energy management experts, regulation raises questions.

Installing electric vehicle charging infrastructure has become a much higher priority. It is no longer a question of installing or not EV chargersit’s more a question of how many chargers will be needed, how fast and where will the power come from?

Currently in Kenya, this is accelerating with EV charging stations in a few malls and is expected to expand further as consumer uptake of EVs increases. With companies like Nopea Ride leading the way in the expansion of electric vehicles in Kenya and BasiGO, having launched Kenya’s first electric public transport buses for the pilot phase.

A strategic approach is essential, and we believe that it is better to start the energy transition now than to wait for the entry into force of new regulations, in particular because there are immediate advantages. A simple start – storing low-cost energy for use when prices peak – is a sure way to save money, and by spreading the load it reduces grid congestion.

Energy storage technology has proven itself and can be installed in most commercial properties, but its value in the energy transition, particularly in helping to reduce grid congestion, is only now being fully realized.

Sector coupling

The root of the equation that makes energy storage so valuable in helping commercial buildings prepare for the energy transition is “mains coupling‘ – make the best use of energy, in particular renewable energies, by coupling consumption and production. The resulting smoothing of peaks and troughs in demand also helps balance the network.

In a commercial building, mains coupling will likely mean combining energy storage with on-site generation and electric vehicle charging infrastructure (which can store energy, as well as consume it, and offer the owner of the building the possibility of charging vehicle charging fees) .

This type of strategy provides buildings with a degree of self-sufficiency, allowing them to reduce the amount of energy purchased from the grid, store energy at low cost for use when prices are higher and, of course, to comply with many regulations that are likely to emanate from the Fit-for-55.

Building owners should always check local regulations to ensure compliance. Legislation and regulation are part of complex policy initiatives, so there will be differences in interpretation in each country or region, but all with the same desire to achieve Net Zero globally.

But above all, there is another reason to opt for an early approach to the energy transition, and it is this: every well-prepared building gets closer to Net Zero carbon.

The author is Parag Mendiratta – Regional Manager for East Africa at Eaton Electric Ltd