Sustainability services are offered by facility management (FM) companies to decrease negative environmental impact and improve social and economic benefits like energy efficiency, reduction in utility bills, improved air quality etc. According to Environment & Building Technologies Practice, Frost & Sullivan, in India, sustainability services are still limited to energy management and energy efficiency measures undertaken by FM service providers.
FM companies are increasingly introducing new energy efficient technologies in India. The potential of this market can be measured by the spurring real estate development activity and the dire need to cut energy consumption across commercial, residential and government infrastructure segments. Facility management companies are better placed than any other entity to successfully bridge this need. FM service providers that have historically focused on providing soft services (e.g. washing, janitorial, gardening, landscaping, pest control, etc.) are increasingly looking to add technical services like energy management to their service portfolio.
Indian energy management services (EMS) market is many years behind the developed markets in Europe. The scope of EMS in India is limited to HVAC systems in facilities or IT infrastructure. Advanced energy management actually extends to optimization of waste management, building infrastructure, supply chain networks, product design, transportation networks and plant controls and equipment. It is inevitable for end users to embrace smart grid/meter systems and renewable energy sources to enact more effective cost-management strategies and utility consumption, thereby improving their long-term sustainability.
As the market evolves, new capabilities have to be created for vertical integration along the facilities management hierarchy. It is only a matter of time that large FM companies will enter the performance contracting or energy management market and make the competitive landscape tougher for Energy Service Companies (ESCOs) and for Integrated Building Management System (IBMS) providers. FM companies will have to make energy management a core competency alongside the provision of hard (elevator, HVAC, generator set maintenance etc.) and soft services. Sustainability based offerings such as energy management or performance contracting (PC), energy and environment audits, and LEED certifications are becoming a niche profitable business with minimum competition. Currently at embryonic stages of development, energy management will witness enhanced interest among building owners as they struggle to reduce and keep tabs on the operational costs. Nevertheless, the Indian market offers long term business opportunities for FM companies, IBMS companies and ESCOs. Management of the energy footprint market is in elementary stages of development but has both retrofit opportunities in existing buildings and in new buildings.
As the market witnesses more and more penetration of information and communication technologies (ICT), buildings are expected to become smarter, intelligent, environment-friendly, and energy efficient. Hence, in the future, one of the important trends driving the growth will be the convergence of ICT with other verticals such as environment, energy and building technology industries. With buildings becoming fully integrated and networked using wireless, web-based automation systems, energy management will become the prime focus, leading to improvements in operational efficiency, optimization of energy, and demand management. Most asset owners spend over 75 percent of the total lifecycle costs of a building on operations and maintenance; so there is an emerging business opportunity for solutions and services in energy management. It makes business sense for FM companies to understand the intricacies of fully “networked”, “converged”, and “intelligent” building solutions and identify this business as a niche opportunity beyond hard and soft services.
Currently most FM companies that offer energy management services avail services of in-house personnel and have not engaged with external professionals like software companies. FM companies have also noted that end users (specifically the Grade–A offices in metros) are open to exploring energy management and most FM contracts have started including some form of EMS in the last three to five years.
Energy saving tools are not very popular among Indian corporates, mainly due to the cost-conscious attitude. Private companies which are already facing the brunt of economic slowdown are on a cost-cutting spree, hence they prefer to adopt in-house energy conscious measures rather than invest in technology to achieve the same end result. Involvement of ESCOs is very minimal in the corporate sector as it has found little success only in the industrial sector.
Energy management through facilities management is not applicable for residential buildings as sustainability or environment friendly service concepts have not penetrated this segment in India. However, there is scope for energy management by FM companies in the commercial, industrial, and infrastructure sectors which are considered energy guzzlers with large physical assets that have high carbon footprint. Presently, most corporates adhere to energy saving measures; they are aware of their monthly energy usage and are regularly reporting variations. Companies that have not adopted such measures so far are small sized corporates who do not feel the pinch of energy bills.
Currently, FM companies do not play a significant role in energy monitoring or management. They only advice or have been asked to maintain energy-intense equipment and to avoid energy wastage. It is expected that in about seven to eight years, FM companies in India will actively be involved in energy management mainly because, the line between FM and EMS is slowly fading away.