The fifth edition of The Client, Consultant, Contractor Conference (TQuadC), organised by CPI Industry on June 13, in Dubai, discussed post-pandemic business recovery, the challenges involved in achieving net-zero targets and the importance of embracing a holistic approach in construction. With a focus on business recovery, post-COVID, industry stakeholders, including manufacturers of HVACR equipment, consultants, contractors and legal experts, discussed financial stability and how innovation and adapting to change are essential for growth.
Opening the conference, Azmi Aboul-Hoda, Managing Director, Emergy, who also chaired the event, said that adopting a holistic approach to construction is needed from the concept stage to its operation and maintenance phases. “Sustainability, energy optimisation and profitability cannot be achieved without a holistic approach,” he said. “It inspires a complete paradigm shift in the building process, with architecture becoming a tool of environmental reconciliation through integration. Today, architects are no longer thinking of design as form-driven, but as systems and functional-driven. However, the regional construction sector still has myriad challenges, from payment delays to slow digitalization, and from supply chain disruptions to the industry’s fondness for choosing the lowest bidder.”
Several experts at the conference also articulated the need for communication and coordination among owners, architects, consultants, contractors, manufacturers and facility managers right from the design stage. “The owner, as an employer, plays a critical role in this ecosystem, because they are the decision-makers,” Aboul-Hoda said, echoing a popular viewpoint. “For employers to approach projects with a holistic approach will shift the building process and help them choose better materials, as well.”
Aboul-Hoda led the plenary discussion that looked at the importance of agility, resilience and the implication of the Low Price, Technically Acceptable (LPTA) approach in the MEP sector and the renewed emphasis on Indoor Air Quality (IAQ).
Road to recovery
Saeed Al Abbar, CEO, AESG, was one of the participants in the plenary discussion. Elaborating on the ground reality, Al Abbar said the world is getting much more volatile and the economy has seen some peaks and troughs after 2008, with events like the pandemic further complicating the situation. He said the challenges faced by businesses today are not the same as before and felt that specialised technology providers, including MEP players and HVAC contractors, need to be agile and have that built-in diversity to adapt. “We must know things will not return to where they were, because they never will,” he said. “If you’re looking at the market to resemble 2019, that will not happen. Still, there are ample opportunities in different sectors, especially for specialised technologies that are helping customers solve unique challenges rising from COVID and project delays due to supply chain disruptions. The bigger players have the inbuilt infrastructure, connections and market presence, which gives them resilience. However, they are sometimes not as agile as in innovating and adapting. Big or small businesses adapting best to current market conditions have been returning to profitability and growth.”
His co-panellist, Sougata Nandi, the CEO of 3e Advisory, said that the fundamentals of businesses – revenue growth, reducing cost and increasing profitability – have been and will always remain the same. The bottom line is how the supply and demand function. “With the world economy becoming so interconnected, everything that happens globally affects our business somehow,” he said. “The pandemic initially caused huge migration from the region, as people lost jobs. Projects were delayed due to the lockdown during the pandemic. This created challenges for specialised sectors, such as energy management and the engineering industry facing skill gaps. With the health crisis continuing, the challenge remains.” Echoing Al Abbar, he said the recovery in the construction sector, like any other industry, will be rather bumpy.
Providing a manufacturer and material supplier perspective, Mujtaba Shaikhani, Managing Director, Rubber World Industry, reckoned the pandemic and the subsequent supply chain issues have opened doors for a circular economy in terms of material sourcing, where more owners prefer local manufacturers, primarily owing to supply chain disruptions in sourcing raw materials. “Prices of raw materials from different countries have gone up to a level we never imagined,” Shaikhani said. “Contractors and clients must understand that going for low-priced, technically accepted materials does not add value to their projects in the long run.”
Taking the right steps
The regional construction industry has been hugely dependent on public projects; however, the demand has shifted over the years. While the retail and office sector is not prospering, data centre building needs have grown, as e-commerce and digitalisation grew exponentially in every industry. Al Abbar said: “The public sector in the region has been doing great work in terms of sustainability and energy efficiency projects, but what the private sector should do is much more important. It is the same when you take the country-specific demand; in Saudi Arabia, for example, where community infrastructure development continued to move very quickly, there was a demand for construction-related HVAC, energy management, etc., but in the UAE, the focus was on retrofitting to meet IAQ needs.”
He also noted that the Middle East region was probably one of the busiest. The key to business success, he said, is not just relying on one category.
Nandi said the need of the hour is to count on owners and employers to ensure stability in the construction sector. He says that a holistic approach should not just be restricted to how the buildings are designed but should also involve bringing together all stakeholders, including owners and the regulators, like the municipalities and RTA.
Challenge of Low Price, Technically Acceptable (LPTA) approach
The panel unequivocally expressed the issues that arise from using Low Price, Technically Acceptable (LPTA) products in projects. The pressure of keeping costs down trickles down from the top. Owners opting for the lowest bids put consultants and contractors on the spot to look for materials that offer better prices and meet the minimum technical requirements, the panellists said. “What contractors, as well as MEP and energy consultants and designers, need to understand is the benefit of buying better quality products,” Shaikhani said. “It avoids unwanted maintenance in the long run. I believe consultants should take the lead in this and educate the owners and contractors.”
Concurring with this, Nandi said the struggle to keep costs lower breeds many other issues – from low salaries to poor living conditions to companies’ inability to retain skilled labour.
Opportunities in the post-COVID market
The panellists agreed that post-COVID, the market has been picking up and pointed to exciting developments in terms of focus on health and sustainability. With the property market picking up, there has been a niche market for HVAC, they said. Al Abbar, speaking on the subject, said: “The luxury residential market is growing and creating pockets of demand. Even though it is challenging to predict from a macro level, there is an increased focus on IAQ and a growing need for specialised contractors. The key elements in building planning are changing with increased demand for decarbonisation, energy efficiency and other technologies.”
Nandi, weighing in, said a key driver has been government action on climate change. The UAE in late 2020 submitted a fresh set of Nationally Determined Contributions (NDCs), in line with the Paris Agreement, towards lowering the emission of greenhouse gases. This has led to several regulatory requirements for greater energy efficiency in the buildings sector. Nandi said the country’s climate targets have opened new doors for energy management providers, as well as for energy certification and measurement initiatives, which have become the norm. Nandi also highlighted the role of Big Data in spurring greater commercial activity. “Another sector that will have a huge impact on the construction sector and ongoing building management after completion is data science,” he said. “It will greatly affect facility management, capital investment and ongoing building maintenance.”
Following the Plenary Discussion, Anil Mishra, Senior Advisor, Rubber World Industry, delivered the Industry Leadership Address of the event, titled ‘Insulation for Passive Energy Saving’. Mishra said that even the best equipment might not provide the performance and longevity expected when installed incorrectly. “Quality and longevity of insulation are as important as the reliability of equipment in HVAC installations,” he said. “Selecting the right materials and installing them correctly play a vital role in energy saving,” he said. “Buildings are responsible for 40% of global energy consumption and over 30% of greenhouse gas emissions. Insulation can be a great way to improve passive energy performance, better HVAC operation, and building safety performance.”
The conference saw technical and business case study presentations from Dharmesh Sawant, Sales Director – UAE/OMAN/QATAR of Qingdao Hisense HVAC Equipment Co. LTD; Chris Tang, Technical Support Engineer, Midea Middle East; and Maayad Al-Shaar, Consultant Sales Manager, B2B Sales Management, Samsung Electronics. What followed was a panel discussion on new FIDIC and what it means to the construction and MEP industries.
The FIDIC Panel, moderated by Aboul-Hoda, featured Euan Lloyd, Senior Counsel, Al Tamimi & Company; Daniel Xu, Partner, King & Wood Mallesons MENA; Segun Faniran, Director, Forensic Planning & Delay Analysis, Turner & Townsend; and Darryl Koh, Senior Associate, DLA Piper Middle East. The panel discussed the benefits of adopting the ‘ratio of cost contracts’ in the GCC region. The speakers also deliberated on other important topics, such as risk in cost contracts and international best practices in structuring stakeholder participation in projects.
Subsequent to that, Sagar Kulkarni, Managing Director, Consistent Engineering Consultants, led a panel discussion on digitalisation trends and application of digital technologies in construction and facility management (see side-bar). Jason Prince, Group Business Development Manager, Netix Global BV and Nandi, as panellists, discussed the lack of awareness among construction industry players and the gap in Capex cost and Opex benefits. The session also addressed the impact of Big Data and AI systems on the industry.
The day also witnessed a co-located event, titled ‘The Great Debate: Comparing the Merits of CHW And VRF Systems’ (see side-bar). Moderated by Sarah Jaber, Senior Sustainability Consultant, AESG, the discussion involved Sawant of Hisense; Amrit Saxena, Business Development Director, SILGO Group of Companies; Chris Tang of Midea; George Berbari, CEO, DC PRO Engineering and Author, The Energy Budget; Kiran Kumar Nethrakere, Estimation Manager, Voltas; and Abdallah Omari, Sr. Technical Sales Engineer – UAE, Qingdao Hisense HVAC Equipment. The session was adjudged by a Listening Panel comprising Akshay Datar, Strategy & PMO Manager, Energy Efficiency and Renewables Office (Reem), RAK Municipality; James Grinnell, Head of Water, Regulatory and Supervisory Bureau (RSB Dubai); and Dr Pablo Izquierdo, Energy Efficiency Manager, Energy Efficiency and Renewables Office (Reem), RAK Municipality.
The session also saw a presentation on the topic of local energy efficiency standardisation for the HVAC sector by Nabil Shahin, International Technical Director, Air-Conditioning, Heating, and Refrigeration Institute (AHRI). He said that while air conditioning technology has not evolved a lot, in recent years, there has been innovation in systems in terms of energy efficiency features and automation. “We must consider local climate while setting technical standards for VRF and chiller air conditioning,” he said. “Fortunately, AHRI is working on global and regional standards for chillers and VRF systems meant for 19 different climate zones geographically. This will offer much clarity for the seasonal efficiency of VRF and chiller systems and help establish the right performance benchmarks.”
Here’s what participants said…
IAQ driving Innovation
COVID-19 had put IAQ in focus and resulted in need for specialist skills. HVAC consultants and providers with inbuilt specialities to deliver projects and products that can offer safer environments and meet these evolving needs are seeing growth. The pandemic is not only driving innovation in the HVAC sector but also in terms of systems that make possible decarbonisation, energy efficiency and much more.
– Saeed Al Abbar, CEO, AESG
Growing focus on circular economy
The pandemic, followed by geopolitical issues and an ongoing war in Russia has caused unprecedented supply chain disruptions, affecting raw material supply in manufacturing. As a result, we have been seeing circular economy practices being adopted by the construction industry, where more and more contractors and consultants source material from local manufacturers.
– Mujtaba Shaikhani, Managing Director, Rubber World Industry
‘People feeding the numbers determines quality of data’
This can ultimately result in incorrect benchmarks for energy performance
A highlight of TQuadC was a panel discussion on digitalisation. Chaired by Sagar Kulkarni, Managing Director, Consistent Engineering Consultants, the discussion elicited interesting perspectives. Analysing the multiple facets of digitalisation in the construction sector and across the lifetime of buildings, the panellists weighed in on the benefits of AI, automation and data. They also discussed the challenges related to data transparency in setting efficiency benchmarks.
The panellists said the UAE has been at the forefront of implementing innovative concepts and technologies to improve sustainability and energy efficiency. New buildings have many digital assets, such as pollution monitoring to trigger automatic ventilation, smart lighting and cooling options and remote facility management, the panellists agreed. Despite the widely chanted digital building praise, studies show that only five per cent of the construction sector is digitalised, and over 60% are completely unaware of the benefits of digitalisation, the panellists agreed.
One of the panellists – Jason Prince, Group Business Development Manager, Netix Global BV – said the baseline for benchmarking energy consumption or any other parameter in building performance is usually based on data from the previous year. Smart systems make it possible to collect building performance data to provide a comprehensive view of practices that can achieve net-zero efficiency, he added.
However, technology adoption by clients, contractors and MEP providers in the region has not caught up with the pace of new technology development, Prince said. “Technologies like centralised control systems, monitoring systems and AI-enabled information management systems will not be a-nice-to-have technology but a necessity for clients, he said. “It will give them the necessary information to be passed on to consultants and MEP designers to enhance the design and choose solutions that offer better energy performance.”
The other panellist – Sougata Nandi, CEO, 3e Advisory – said that each construction subsector, energy or HVAC, will see digital adoption differently. However, the most visible advantage of going digital is that the design and execution have become much more transparent and, hence, more efficient. “Digitalisation has made information readily accessible for all stakeholders,” Nandi said. “However, the quality of data in a project still depends on the people feeding the numbers to the system, which can always be biased. It can ultimately result in incorrect benchmarks for energy performance.”
Nandi said the industry is highly fragmented on the potential of digital buildings, as the client does not immediately feel the benefits in cost or revenue. “Unless this happens, we must take it with a pinch of salt,” Nandi said. Wading in, Prince said that the resistance is owing to the additional cost of implementing digital solutions. But once the client sees the downtime that can be reduced and the savings that can be had from automation, plus the benefits of early maintenance alerts, and reduced onsite inspection and labour, they will realise they need the technology, Prince said.
A stumbling block on the path to digitalisation is also the complexity posed by too many options, Prince said, adding that customers are trying different solutions precisely owing to the large number of options. “The need of the hour is to have vendor-neutral hardware platforms that can be integrated easily into their projects,” Prince said. This will, indeed, fasten digital technology adoption. But the challenge is that there is a gap in Capex cost and Opex benefits, as tangible and non-tangible benefits cannot be calculated easily. Standardising certain technologies will ensure efficient ways to measure energy performance and set better benchmarks for the future.”
Efficiency at the epicentre
The Great Debate, a co-located event of The Client, Consultant, Contractor Conference (TQuadC), examined the merits of chilled water systems and VRF systems. Excerpts from the discussion…
‘The Great Debate: Comparing the merits of CHW and VRF systems’ was an attempt at highlighting the merits of the two systems through the presentation of data to back the claims made by proponents of the two systems. Moderated by Sarah Jaber, Senior Sustainability Consultant, AESG, the discussion involved:
- Abdallah Omari, Sr. Technical Sales Engineer – UAE, Qingdao Hisense HVAC Equipment
- Chris Tang, Technical Support Engineer, Midea Middle East
- Dharmesh Sawant, Sales Director – UAE/OMAN/QATAR of Qingdao Hisense HVAC Equipment Co. Ltd
- Amrit Saxena, Business Development Director, SILGO Group of Companies
- George Berbari, CEO, DC PRO Engineering; Author, The Energy Budget
- Kiran Kumar Nethrakere, Estimation Manager, Voltas
The following were part of a Listening Panel, who, at the end of the session, shared their observations with the Moderator to help draft the outcomes of the debate:
- Akshay Datar, Strategy & PMO Manager, Energy Efficiency and Renewables Office (Reem), Ras Al Khaimah Municipality
- James Grinnell, Head of Water, Regulatory and Supervisory Bureau (RSB Dubai)
- Dr Pablo Izquierdo, Energy Efficiency Manager, Energy Efficiency and Renewables Office (Reem), Ras Al Khaimah Municipality
At a time when proponents of both the systems claim to have made substantial progress in technology and market penetration, The Great Debate presented a ‘pro-against’ open argument, weighing the cost, efficiency, sustainability and reliability of both systems. It showcased clarity on inherent advantages and also the barriers that are preventing greater uptake.
Locking horns in the debate, which comprised two rounds – Opening Statements and Elaboration – the proponents of the two systems maintained their stance that their respective solution holds the key to sustainable and reliable air conditioning needs of the region.
- Most of the District Cooling systems are built offsite and chilled by water away from occupants; they are, hence, safe for occupants [of buildings they serve]. CHW systems provide unmatched scalability. You can generate from five to 50,000 tons of cooling in a single plant. Also, there is no limitation on the piping length, so it can be used for multiple projects in the community.
- CHW systems offer great capacity – a 50×50-metre facility has the ability to generate 50,000 tons at a very low running cost.
- Each system has its merits and challenges, and what might be suitable for a given building may not work for another. VRF and CHW systems have their own market. While CHW dominates the high-rise buildings, the villas go for VRF systems.
- District Cooling today uses 0.7kW/tonne in Dubai. Of the installed capacity of two million tonnes, only half is utilised, meaning we have one million tonnes unused capacity.
- We are seeing snail’s pace on the innovation front. The CHW systems industry has not seen any major breakthrough in the last decade. Integrating district cooling with solar and renewable energy can offer a significant benefit and remain a viable energy storage system. However, the CHW industry likes to copy-paste the same procedures, as it has grown comfortable in its ways. Implementing AI systems to control District Cooling operations can save up to 10% energy.
- The most significant benefit of District Cooling is its ability to store thermal energy in an effective manner, which is a growing challenge in the region. Any fluctuation in the load is to be absorbed by thermal energy storage. In my experience, we have been able to heat swimming pool water in a villa just with captured heat. The irony is that almost half of the District Cooling systems in Dubai do not have thermal storage systems.
- In the absence of data, the actual efficiency claims of VRF systems are challenging to verify. A CHW system is better, as you can measure the same efficiency across the network. A decade ago, I said there was no way to measure VRF; however, today, they carry efficiency certificates. But most of these are air-side measurements. When it comes to measuring refrigerant’s efficiency, there is no precise data.
The CHW team highlighted the energy efficiency, safety and scalability features of District Cooling systems. The team added that it is not possible to measure the exact efficiency of VRF systems.
The VRF team responded to the CHW team’s comments and also highlighted the smart controls and flexible installation features, among others, of VRF systems…
- The growth of VRF presence in the building environment speaks for itself, as the system amounts to over 20% of the chiller market from zero per cent, 10 years ago. The system has been offering what customers in the sector need – innovative control, low price, durability and comfort. Some of the advanced features include humidification or dehumidification and zoned cooling.
- Most of the VRF systems meet stringent energy-efficiency requirements by ESMA and Burjeel. In addition, most international manufacturers hold global certifications for green and sustainable operations.
- Presenting a contractor’s perspective, Saxena said that VRF systems are easy to install and require considerably less testing after installation. In contrast, despite low chiller costs, CHW requires complex pipe installations, often requiring maintenance at the joints. Besides, VRF systems are flexible in terms of capacity and installation location.
- VRF systems come with in-built anti-corrosion hardware, a float switch, high-efficiency aerodynamics and inverter technology, besides IAQ features. Manufacturers are continuously improving efficiency and have achieved 10.75 EER for a single module.
After hearing the Opening Statements and Elaboration rounds of the debate, the Listening Panel said it was obvious specific applications have a preference for a particular system. However, a significant proportion of projects fall in the middle, where the comparison between the two approaches can be beneficial to inform a better decision.
A vital feature of any HVAC system is its energy efficiency performance, the Listening Panel said. CHW systems are more energy efficient and have the backing of measurable data. While VRF is highly efficient, the methodology used for measurement is not as reliable as that of CHW systems, the Listening Panel said.
VRF systems have a lot of innovations and have made substantial progress in offering user-friendly features that many consumers look for, the Listening Panel said. On the other hand, the user integration side of the CHW systems has not shown much progress in recent years, the Listening Panel said.
From a safety point of view, VRF systems include refrigerant pipes that go throughout the building, creating a possible health hazard to occupants and the environment, in the instance of leakage, the Listening Panel noted. Although VRF systems undergo rigorous testing during installation, the operational leakage risk and the possible health effects have not been demonstrated, the Listening Panel said. On the other hand, the refrigerant in CHW systems is contained within the chiller, the Listening Panel said. Also, a few pilot projects have been completed using alternative new refrigerants with a lower-GWP than the currently popular HFCs, which reduces the environmental impact of CHW systems, the Listening Panel said.
In terms of digital integration, which is mainly associated with the rise of Smart Cities, VRF systems have a head start, due to the constant research and progress being made in that field, the Listening Panel noted. Although there is room for capability development in digital integration in CHW systems, the progress is slow, the Listening Panel said, adding that it depends on the willingness of the operator, in many cases.
From a constructability point of view, both systems are regarded as equals, the Listening Panel said. Although VRFs are viewed as plug-and-play systems, they require more attention from a design and installation point of view for bigger applications, the Listening Panel said. On the other hand, CHW systems have been in the market for longer, so they benefit from better contractor know-how, the Listening Panel added.
When it comes to cost of each of the two systems, the Listening Panel observed that although both the sides argued at length, the statements of each were based on opinions rather than facts. The Listening Panel, therefore, decided to leave this aspect open-ended, until a more accurate comparison can be made with regard to AED/kW.