Building Energy Management

As government’s get together in Denmark to talk about the latest regulation on climate change, globally business is coming to terms with the need to become more energy efficient. The buildings we occupy use significant amounts of energy - up to 40% of all US energy consumption - so it makes sense for organisations to invest in improvements. Trin Napatsakorn discovers how to make the changes.

Regulatory Evolution: 1992 - 2007

In March 1992, the Ministry of Energy issued ‘The Energy Conservation Promotion Act, BE 2535’ or the 2535 Act (1992), “directed at ‘controlled factories and commercial buildings’ that have installed electricity meters greater than 1,000 KW, or consume more than 1,200 KVA, or 20 million megajoules of energy per year,” explains Danai Egkamol, director of the Bureau of Energy Regulation and Conservation, Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy.

However, the Act had two problems, analyses Komgrit Chukiatman, architect and expert on building and energy codes at architectural firm A49. “Firstly, it only pertains to existing structures that have breached energy consumption thresholds, as a result, owners constructing new buildings rarely bother with energy conservation measures. Secondly, buildings like high energy consuming condominiums were excluded because they were assessed on the basis of individual electricity meters. Structures that ought to be excluded, like army barracks, became ‘controlled’ buildings because they were registered under one electricity meter.”

Moreover, compliance was expensive. The Act stipulated that ‘controlled’ organisations hire government authorised third-party registered consultants to conduct extensive technical and analytical assessments, and certify reports.
 
In 1995 and 1997, “minor amendments to the Act, to commercial buildings and factories respectively, were issued because the Ministry was unable to monitor 2,000 commercial buildings and 3,000 factories,” Danai says. “Paperwork was streamlined; registered consultants, and certification were abolished. Instead, ‘controlled’ organisations submitted annual energy management policies, plans and targets.”

In response to feedback, drastic amendments to the framework of the 2535 Act (1992) were made in 2007 with the ‘Energy Conservation Promotion Act (No. 2), BE 2550’ or the 2550 Act (2007). “Adjusting machinery is a one-off change. Investors always ask when they will break-even; or worse, their sales are affected. We needed to issue guidelines to manage projects systematically at international standards,” Danai explains. “Changes were based on the principles of ‘Plan Do Check Act’ (PDCA) used in environmental conservation.”

2009 Building Energy Code

Two Ministerial regulations were released in June 2009, effective immediately:

1. The ‘Prescription of type or size of building and standard, criteria and procedure in designing building for energy management BE 2552’, more commonly referred to as the 2009 Building Energy Code.
2. ‘Prescribing Standard, Criteria, and Energy Management Procedures in Designated Factories and Buildings B.E. 2552’ was called the 2009 Energy Management Regulation and is more procedure based.

The Building Energy Code indicated that new and retrofitted commercial buildings in nine categories - health-care centres, educational institutions, office buildings, condominiums, buildings with large numbers of users, entertainment venues, hotels, service stations, and department stores or retail centres, with an area greater than 2,000 sq m - become ‘controlled’ buildings and are automatically required to curb energy consumption by at least 10%. The Ministry includes an overall building consumption threshold, which provides some leeway for retrofitted buildings.

Structural and Design Requirements of the 2009 Building Energy Code
 

“The 2550 Act (2007) still applies to existing buildings and factories. However, if existing structures undergo renovations that increases energy consumption over 2,000 KW, they will be monitored by the 2009 Building Energy Code,” Danai clarifies.

“This Code complements the 2535 Act (1992) by adding building types that should be governed but were formerly excluded, and by setting parameters for building design and consumption limits before construction,” adds Komgrit. 

“The Ministry issued new regulations of eight modules on energy management according to international standards in the 2550 Act (2007). The previous documentation and assessment we wanted organisations to conduct in the 2535 Act (1992) are absorbed into steps four and five of the eight steps,” says Danai. “Organisations are given a handbook filled with general guidelines on key areas to evaluate, technical assessment and analysis methods, and solutions to general problems.

“Although people say that it resembles energy ISO standards, which have yet to come to Thailand, we have made it simpler with less paperwork, because the law is immediately applicable. We want all parties to get accustomed to energy management at international standards before making the regulations more stringent over time. Eventually, organisations should evaluate their production life cycle and raw materials to operate more systematically.

“To keep up with rapid technological innovations, every two to three years, the Minister of Energy, rather than the Cabinet, is now authorised to make detailed operational and technical changes pertaining to efficiency standards and measurements.” This move was a solution to “numerous requests being stymied by frequent government change.”

At this point, “DEDE cannot demand the 2009 Building Energy Code be implemented by the Ministry of Interior, but the 2550 Act (2007) has been subsumed under Article 8 of the Building Control Act, making it a legal building requirement,” Danai adds.

“One remaining issue is who certifies these documents?” asks Komgrit. No Ministerial announcements have been made, but Danai surmises that “architects, engineers or consultants can certify the blueprints for new buildings, and an accredited energy consultant will evaluate and certify energy management reports for existing structures.”

“Experienced and independent energy consultancy like McKinnon & Clarke can determine the best, most cost-effective sources of energy and reduce costs by adjusting existing equipment use to better match production cycle requirements,” says Supakij Samuthpongthorn, McKinnon & Clarke’s energy engineer. Another key area of cost savings is “the ability to detect areas that the client could negotiate more favourable terms with non-monopolistic utilities, such as fuel oil and telecommunication, and recommending the best technology available for client needs,” explains McKinnon & Clarke’s senior energy analyst, Wanlapa Charoonthum.

Funding

Government funding is available for energy management measures. Qualified private sector organisations can get up to half of the funds needed, while government agencies are fully supported.

“Energy consultant can play a key role in unlocking outright grants and subsidies as they know what sort of energy conservation programmes are funded by different agencies,” explains Supakij. Wanlapa says that it is important that the employed energy consultant works closely with the clients in order to successfully find tailor-made energy management solutions.

One of the biggest sources of funds from DEDE and the Energy Policy and Planning Office (EPPO) is the Energy Conservation Revolving Fund which has lent THB 6 billion since 2003. More recently, loans have been approved for equipment conversion to alternative domestic energy sources such as biogas.

“The government releases funds to commercial banks to lend to qualified individual projects of not more than THB 50 million at a rate not exceeding 4% for a maximum of seven years. DEDE assesses the technical feasibility and the energy savings of each plan, while banks analyse financial and credit risks.” Danai adds: “Savings from energy conservation can repay most projects within three years. The principal is returned to government coffers with 0.5% interest. Detractors say state support may lead to market distortion, but this internationally acclaimed programme has been adopted by many countries because it reduces carbon emissions and stimulates the economy. To date, Thai banks have lent more than THB 60 billion with their own funds.”

Looking at complementary measures, “Thailand should be much further ahead when it comes to energy management with strong, well thought through policies,” says Simon Northrop, CEO of McKinnon & Clarke, who oversees 18 offices in 14 countries across Europe, America and Asia. “If you look at the deregulation of Singapore’s energy market and the benefits of competition in reducing energy costs, Thailand should think about deregulating electricity and gas as a competitive edge over Malaysia, Vietnam and China. Singapore also offers real benefits to high energy users who reduce their energy consumption and carbon footprint.” Fortunately, as “the Thai education system produces the right calibre and number of energy engineers, we just need the Thai government to provide the right incentives to businesses.”

Ultimately, “it is vital,” Komgrit concludes, “to view Energy Conservation regulations and environment-related laws by understanding their objective, which is to protect consumers and to be energy efficient. Most of these changes will require additional capital outlay, but it is a necessary investment.”

Green Demand

Thais are reluctant to invest in high cost green technology, Komgrit says, because “producing one unit of electricity from a solar cell (photovoltaic) is THB 13 - 15, but purchasing it from the government is just THB 3 a unit! What does this imply? If state generated electricity is available, photovoltaic alternatives are not cost-efficient.”

“If you look beyond the return of investement, to just reducing consumption, the move is justified.” But perceptions differ. “Foreigners think that 30 years to recoup costs is reasonable; for Thais, even 10 years is too long,” Dr. Narongwit Areemit, architect, energy specialist and LEED accredited professional at A49. “But many foreign companies in Thailand have policies to house their offices in green buildings, which will boost demand. Moreover, given the 2009 Energy Code’s overall thermal transfer value (OTTV) requirements, this would result in fewer new glass-fronted buildings.”
 
“Thailand relies heavily on tourism. The growth in eco-tourists is such that a few hotels promoting their eco-credentials will never be enough - tourists want to see governments leading by example and ensuring that energy conservation and carbon reduction is at the top of the political agenda,” Simon says. This may take time; “during times of political instability, energy issues are less important when governments have more pressing issues,” Danai remarks.
 
“Climate change has an impact on Thailand; the wet season is getting longer. Tourists don't want to sit and look out of their hotel rooms staring at the rain, so Thailand needs to act now to keep visitors coming back. There is a cost to being green and tough decisions have to be made. European countries that rely on tourism introduced a green tax for all visitors and this maybe something that could be introduced in Thailand,” Simon suggests.
 

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• Performance enhancement
• Consumption improvement
  
• Utility cost reduction
  
• Financial recovery
  
• Additional funds/ subsidies for possible re-investment
  
• Profitability increase