Advertisement sbef abu
Advertisement sbef abu

Digitising the sustainability services of ESCOs

 

According to the International Energy Agency (IEA), an intergovernmental affiliate of the Organisation for Economic Co-operation and Development (OECD), the global annual energy efficiency investment stood at USD 236 billion in 2017.

 
By Nivedha Sridhar, March 1, 2020 PropTech
 

Digitising the sustainability services of ESCOs
 

According to the International Energy Agency (IEA), an intergovernmental affiliate of the Organisation for Economic Co-operation and Development (OECD), the global annual energy efficiency investment stood at USD 236 billion in 2017. The buildings sector alone accounted for 60% of this outlay, followed by transport and industry at 25% and 15%, respectively. With the investments in optimising the energy efficiency of buildings having increased significantly, primarily in the building envelope and HVAC space, one cannot help but look further into the causal factors behind this paradigm shift.

Offering a degree of clarity is the finding that the built environment consumes 40% of world's energy and emits greenhouse gases in equally huge volumes. In leading cities with vast real estate markets, the ecological footprint of buildings is especially telling. Despite the presence of sizable fossil-fuel based transportation in these cities, buildings are emerging as the primary carbon culprits. Therefore, IEA's findings are not in the least bit surprising. The IEA also indicated that the aforementioned developments can be factored into the value of the global Energy Service Company (ESCO) market, which grew by 8% to USD 28.6 billion in 2017. In the years since, this growth has continued unabated and if reports commissioned by IEA and several other organisations are anything to go by, the ESCO market is expected to continue to grow exponentially over the next decade.

The challenges ESCOs face

Real estate executives, confronted with the harsh realities of climate change and ever-changing regulatory landscape, are delegating the daunting task of attaining energy efficiency to ESCOs. However, investing in enhanced sustainability had, until recently, continued to be looked at as a capital-intensive overhead for the business, rather than a value adding strategy, embedded into regular operations to generate meaningful savings.

ESCOs often encounter lack of transparency across building portfolios. The project cycle of an ESCO typically involves preliminary analysis of the building, formulation of an action plan, implementation and monitoring. The challenges that ESCOs have routinely faced in their operations include:

  • Poor/no real-time picture of the health and status of energy producing assets
  • Inability to granularly track (M&V) and optimise energy conservation measures (ECM)
  • Lack of access to a data validated big picture perspective, making portfolio-wide enhancements and benchmarking a daunting task

Adding to their woes are multi-vendor automation systems operating in silos, whose incongruity is counterproductive to ESCO performance across every touch point in a building. However, the latest technological breakthroughs offer a ray of hope, bringing new solutions to the fore.

Data-driven operating model

Digital transformation has permeated businesses of all sizes and types, and the energy segment of the built environment is no exception. IoT technology allows the integration of previously siloed automation systems and the extraction of associated data. The collated data is then subjected to AI-powered analytics, which provides real estate operatives with real-time, actionable insights on asset life cycle, performance metrics and resource utilisation, thereby enabling them to make informed decisions. The deployment of Machine Learning allows the system to instantaneously learn from past performance and seamlessly adapt to changing operational parameters.

Cloud-computing ensures transparency every step of the way, providing stakeholders with accurate data and a nuanced understanding of energy losses and inefficiencies. This in turn paves the way for insight-led, data-driven decision making. Needless to say, a software platform designed to aggregate siloed operational data and harness insights for multiple functions greatly empowers ESCOs to reach their full potential in delivering on sustainability goals. A few forward-thinking ESCOs are already warming up to tech-driven intervention to develop core competencies and build capacity and going forward, technology will be central to achieve energy efficiency and bring facilities in line with sustainability goals.

Technology as the differentiator

Traditionally, ESCOs relied on energy conservation measures (ECMs) and isolated physical retrofits. The approach was mostly specific to lighting, HVAC, etc., instead of an overarching, holistic strategy. Regardless of the strategy in place, the ESCO performance faced roadblocks in the initial energy audit itself, due to the lack of reliable insight. Access to real-time and unified operational data is now addressing these concerns, and championing the cause of ESCOs to stay relevant in today’s competitive and environment-conscious landscape.

Enterprise platforms like Facilio are at the forefront of digital transformation, leveraging the power of IoT and cognitive technologies, and enabling ESCOs to accelerate their journey towards more ambitious energy savings and sustainability outcomes. Facilio's data-driven operations & maintenance platform is equipped with ML-based predictive fault-detection and diagnostic mechanisms to identify anomalies and inefficiencies. ESCOs are therefore able to undertake predictive and responsive action, avoiding excessive machine downtime and inefficiencies in the process. The unified platform also boasts a centralized visibility, enabling operatives to establish and monitor portfolio-wide benchmarks, and assess operations against KPIs, using a single platform, and even remotely, thanks to cloud-computing.

The emergence of such unified and enterprise scale tools has ensured that ESCO companies can now gain a competitive edge by digitising sustainability services, and act as enablers of a future in which energy utilization can scale unprecedented and remarkable heights.

The Author, Nivedha Sridhar is the Director of Content & Growth Strategy as well as a member of the Founding team at Facilio Inc.

MORE FROM BUILT ENVIRONMENT

City Tower: Why H&H's 93-Storey Completion Is One of Dubai's Most Consequential Handover of 2026
City Tower: Why H&H's 93-Storey Completion Is One of Dubai's Most Consequential Handover of 2026

At 365 metres above Trade Centre on Sheikh Zayed Road, City Tower arrives at precisely the moment Dubai's long-term residential leasing market needs it most

May 6, 2026 Property Management
MERED Launches Abu Dhabi’s First Floating Sales Gallery on Al Reem Island
MERED Launches Abu Dhabi’s First Floating Sales Gallery on Al Reem Island

First-of-its-kind immersive venue signals a new chapter in experiential real estate as Abu Dhabi's property market reaches new highs

May 6, 2026 UAE Real Estate
Arada Marks More than 100 million Safe Man-hours at Aljada megacommunity
Arada Marks More than 100 million Safe Man-hours at Aljada megacommunity

Works conducted span residential, retail, hospitality, entertainment, sports, healthcare, education, commercial, infrastructure and landscaping

April 30, 2026 UAE Community Management
Meraas Awards AED 2.4 billion in Construction Contracts for New Phases of The Acres Communities
Meraas Awards AED 2.4 billion in Construction Contracts for New Phases of The Acres Communities

United Engineering Construction (UNEC) has been appointed to deliver The Acres, while GCC Contracting will lead construction at The Acres Estates

April 30, 2026 UAE Business
Concordia Achieves ISO 41001:2018 Certification for Facility Management Systems
Concordia Achieves ISO 41001:2018 Certification for Facility Management Systems

Dubai-headquartered Concordia is an integrated facilities management company supporting a broad portfolio of commercial, residential, and mixed-use developments

April 30, 2026 UAE IFM
Farnek's New Flexible FM Contracts for Educational Institutions
Farnek's New Flexible FM Contracts for Educational Institutions

The three types of operational mode include a normal cycle, holiday cycle and a crisis cycle, said Farnek in a statement

April 29, 2026 UAE IFM
MERED hosts Emirati Artist Faris Al-Hammadi and Leading Brokers at ICONIC Residences Construction Site
MERED hosts Emirati Artist Faris Al-Hammadi and Leading Brokers at ICONIC Residences Construction Site

As part of the experience, guests were invited to write personal messages on a wall for future residents, celebrating the UAE's resilience, its unmatched opportunities, and its deep sense of community

April 24, 2026 UAE Real Estate
SEE Holding and World Bank Group’s IFC Announce Advisory Collaboration to Advance The Sustainable City Model
SEE Holding and World Bank Group’s IFC Announce Advisory Collaboration to Advance The Sustainable City Model

Under the collaboration, IFC will provide structured advisory support to help SEE Holding assess market demand, affordability dynamics, regulatory frameworks, environmental and social considerations, and overall project bankability

April 24, 2026 UAE Business
ALEC Holdings’ 2025 ESG Report Highlights Strong Foundations for Sustained Leadership and Growth
ALEC Holdings’ 2025 ESG Report Highlights Strong Foundations for Sustained Leadership and Growth

ALEC Holdings achieved the Dubai Chamber ESG Label (Advanced) and the EcoVadis ‘Committed’ badge, accreditations that recognise the Group’s structured approach to sustainability and its alignment with internationally recognised ESG standards

April 24, 2026 UAE Sustainability
Dar Global appoints Al Dahlawi Company to Deliver Main Works at Amaya in Jeddah
Dar Global appoints Al Dahlawi Company to Deliver Main Works at Amaya in Jeddah

Amaya is designed as a vibrant live-work-play destination in the heart of Jeddah, bringing together residential communities, business opportunities, retail destinations, and lifestyle amenities

April 23, 2026 Real Estate
 
Subscribe to our newsletter