AN energy law mandating building owners to save power more efficiently will soon usher in marked improvements in the use of this finite resource, according to Leechiu Property Consultants’ (LPC) Executive Director Lylah Ledonio. She is also chair of the Real Estate Committee of the European Chamber of Commerce of the Philippines (ECCP).
A provision of RA 11285 also known as the Energy Efficiency and Conservation Act (EE&C Act), for instance, requires building owners to use renewable energy, such as solar powered systems for lighting, heating water, cooling and the like, for at least 1 percent of their projected annual consumption. This is clarified by the Department of Energy’s (DOE) Guidelines on Energy Conserving Design of Buildings which took effect just last March 2021.
At a recent ECCP forum sponsored by LPC for building owners, Director Patrick T. Aquino of the DOE’s Energy Utilization Management Bureau, also pointed out that big energy users such as buildings classified as designated establishments are now likewise required to monitor monthly consumption, set and achieve annual reduction targets which will then be verified through an energy audit to be submitted to the Energy Department every three years.
“This law encourages landlords to refresh their mindset and improve their power usage,” observed Ledonio. She disclosed that building occupiers or tenants had in an earlier ECCP Real Estate forum, brought up a need to know the law more closely since their average consumption also subjected many of them to its provisions. Those who annually use at least 100,000 kWhE are covered by the EE&C Act.
Being bigger power users, landlords would also likely reap more benefits in implementing energy efficiency measures in terms of savings, said Ledonio. Moreover, they were likely to enjoy better value from their property.
Studies have pointed out that improvements in a commercial building’s energy usage can mean an increase in its rental rates from 2 to 5 percent, a reduction in tenant turnover and an average increase of more than 10 percent in its property value, pointed out Alexander Ablaza, president of the Philippine Energy Efficiency Alliance, at the same forum.
Raymond Rufino, president and CEO of NEO, stated: “There is a compelling business case for the Energy Efficiency and Conservation Act because of the high power rates in the country.” The more a building owner invests in making his building more sustainable, the better the returns.
While most building owners would like to implement energy efficiency measures, they are set back by the high cost of investing in new technology, and the competing priorities for the use of available capital budgets and credit lines for core business activities. Ablaza explained that they can also engage energy service companies (ESCOs) which deliver and guarantee energy savings. A portion of the savings in energy can be used to pay the services of the ESCO. At the end of a contract period, the building owner can then enjoy 100 percent of the savings. An ESCO can also assist a building owner find financing options.
In the meantime, Ricardo Cuerva, managing director of the Nova Group, urged building owners and developers to view energy efficiency as merely the first step in averting climate change. He pointed out that buildings contribute significantly to carbon emissions mainly because of the steel and cement used in their construction. “As an industry, we need to focus on rapid innovation in the manufacturing of these key components to greatly reduce emissions,” he said.
Anticipating a need to address more fully these and other related concerns, the ECCP Real Estate Committee will host another forum in July. For details, pls write to [email protected]