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Billing woes

Regulatory vacuum and lack of awareness among end users are hampering the uptake of sub-metering technology across the region.

| | Aug 30, 2011 | 6:21 pm
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Regulatory vacuum and lack of awareness among end users are hampering the uptake of sub-metering technology across the region. Valeria Camerino reports.

Ramesh Ramadurai, Chief Financial Officer at Emirates Central Cooling Systems Corporation (Empower), described sub-metering as the installation of metering devices in each apartment or building unit to measure and monitor the actual consumption of district cooling services for each user.

Two sub-metering technologies are currently available to transmit data to remote billing locations: a wired sub-metering solution utilising M-Bus interface (M-Bus repeaters and M-Bus Master) and a wireless sub-metering solution employing radio frequency with GPRS/GSM.

The wireless solution is the easiest and most cost-efficient technology for retrofitting buildings, Tarek El-Far, Managing Director at ista Middle East claimed.

“There are also local and remote reading and billing,” he said.”Remote reading and billing are preferred considering GCC culture.”

One of the key benefits of sub-metering, Ramadurai explained, is that it creates energy accountability, reinforcing the concept of “user pays” and making the end user accountable and responsible for what he consumes.

Furthermore, it promotes energy conservation, improves customer service and satisfaction and enables appropriate allocation of district cooling service charges based upon actual consumption of each user, rather than inequitable allocation based upon parameters like the size of an apartment.

However, sub-metering also involves a number of challenges, such as sub-meters’ calibration and maintenance, possible tampering and failures, connectivity and improper signal strength in case of wireless solutions.

Additionally, manual meter readings can be difficult to access and obtain. Sub-metering billing can also be complex and time-consuming, Ramadurai said.

He claimed that Empower has been a pioneer in promoting sub-metering technology in the region and has installed sub-metering solutions in its various projects, including the Jumeirah Beach Residence (JBR) project. JBR is one of the largest sub-metering solutions at a single location, consisting of 7,200 sub-meters spread over 40 residential and hotel towers.

“Of course with every new initiative you will have challenges which we also faced and tackled,” he admitted.

These included difficulties in obtaining meter readings in case of breakdown of communication channel (RF / GPRS transmission), meters tampering (temperature sensors removed or destroyed, batteries removed, cables cut or damaged) and billing complexities (in case of ownership transfers, tenant changes or replacement of meters).

He explained that sub-meters are calibrated and regularly maintained to ensure accurate meter readings. “In a sub-metering solution, actual consumption is measured and billed as compared to estimated allocation in a bulk metering solution, thus resulting in a fair and equitable billing to district cooling customers both owners as well as tenants,” he said.

Ramadurai argued that when users are billed for district cooling services based on some pre-defined allocation parameter, such as square meterage occupied, it results in cross-subsidising the usage of other occupants.

This, he said, leads to unfair billing as customers are charged for an amount of energy that they haven’t consumed. Sub-metering, in his view, solves this issue.

“Measuring cooling energy in every apartment makes users responsible for their consumption, which in turn, encourages them to limit usage,” Ramadurai pointed out. “Sub-metering promotes and rewards energy conservation and results in efficient utilisation of energy resources.”

He added that the role of sub-metering in district cooling services is very similar to that in other utilities like water and electricity services, that is to say, promoting energy conservation.

“There have been various case studies establishing that sub-metering solutions result in greater energy conservation compared to a building level bulk metering solution.”

Hans Altmann, Techem’s Regional Manager for MENA claimed that sub-meters allow users to save up to 25% of energy simply by influencing people’s consumption behaviour.

Furthermore, he said, by obtaining individual consumption values, consumption on the generation side can be further reduced “as we establish a link between the end users and the energy generation plant.”

He described sub-metering as a fair and transparent method for cost allocation, as users only pay only for what they consume and know exactly what their consumption levels are, being rewarded for reduced consumption through lower bills.

In Altmann’s view, fair billing for both flat owners and tenants can be ensured by employing a neutral third-party billing service provider with optimised automated meter reading (AMR) infrastructure to eliminate human interference and error, as well as by introducing cooling charges allocation standards.

However, he said, sub-metering requires capital investment, which might put off developers or building owners, in view of the current instability of the real estate market.

“In the Gulf region there is still no awareness of the advantages of sub-metering,” he said. “The UAE has the leading role in this industry, but it is still in its early stages”.

He revealed that many existing projects are equipped with sub-metering devices, but the systems were never commissioned, due to a lack of understanding of how the meters work.

In an interview published in the July issue of Climate Control Middle East, Suhaib Ahmed, Managing Director at Zenersol, said, “Many buildings are not designed for metering services, and that is causing problems,” adding that “there are many new buildings that are going to be on district cooling, but meters are not being considered, in terms of access.”

He pointed out that access was crucial, because there is a need to recalibrate meters once every seven to 10 years, and also to replace batteries. “Many buildings don’t even have a maintenance programme for meters,” Ahmed said.

He also emphasised that there is a great demand for a proper sub-metering regimen. “The guy at the end, who is paying the bill, has to be thought of. Meters may be small devices, but they do so much in terms of perception.”

Ahmed said that many end users prefer an independent entity to conduct a metering and billing service, as it will not have any vested interest on the amount of revenue generated.

In Ramdurai’s view, demand for sub-metering solutions among GCC end users is steadily increasing.

“Customers demand sub-metering to ensure they pay for what they consume,” Ramadurai explained. “They prefer developments that have sub-metering for cooling services as they have more control through sub-metering solutions and are better equipped to monitor their usage.”

However, he said, there is a regulatory vacuum on the subject, which results in companies installing sub-metering on an exclusively voluntary basis.

El-Far mentioned the case of Germany, where tenants are entitled to a 15% bill reduction if their unit is not metered.

“Currently there are no regulatory mechanisms in place relating to sub-metering,” Ramadurai said. “However, district cooling companies are taking this initiative and educating customers regarding the benefits of sub-metering.”

His words are echoed by Altmann, which mentions the lack or inconsistency of regulations among the key barriers to sub-metering uptake.

“There are many building standards that make the installation of sub-metering mandatory, but they don’t specify what to do with them throughout the lifecycle of a building,” he said.

However, in Ramadurai’s view over the next few years, it will become mandatory for district cooling companies to provide sub-metering solutions to its customers as it is for water and electricity services.

Altmann seemed confident that, in the near future, sub- metering would become a necessity to counterbalance rising energy consumption, on the generation side, and carbon footprint from an environmental point of view.

“The real estate industry also needs to gain new momentum to return to the driver’s seat in the economy,” he pointed out.

“Most importantly, there will be a shift in the decision-making process, where the end users – and not speculators – will have the final say.”

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