Retrofit for the future

One of the real potentials for reducing carbon emissions and raising efficiency lies in upgrading buildings. Hoteliers are realising that green retrofits—the addition of sustainable features and technologies to existing buildings—could, in the long run, prove the low-cost solution to improved environmental performance, says Mike Scott

Increasingly sustainability and energy efficiency are being integrated into the planning of new buildings, whether it is hotels, office blocks or residential estates. However, with new buildings representing only a small percentage of total building stock—in the UK, for example, new commercial buildings account for only 1 to 2% of all commercial buildings, according to the Investment Property Forum's Costing Energy Efficiency Improvements in Existing Commercial Buildings 2009 report—the drive to make existing buildings more efficient is gaining momentum, not least to comply with more stringent legislation and government targets for reduction in carbon emissions.

Indeed, given that the building sector accounts for between 30% and 40% of global energy use and with existing buildings contributing almost 80% to the total carbon emissions of some large cities, such as New York, consensus among scientists and regulators is that climate change cannot be addressed without extensive retrofit programmes, according to the Buildings and Climate Change: Status, Challenges and Opportunities report from the UN Environment Programme’s Sustainable Construction and Building Initiative.

And it is not only legislation that is bringing about this transformation. Pressure on the bottom line is also driving businesses to look at how they can upgrade their present buildings to cut operating costs in the long term.

According to a 2008 report, The Dollars and Sense of Green Retrofits, published by consultancy firm Deloitte and Charles Lockwood, buildings that are not upgraded with sustainability in mind will relinquish market leadership in terms of higher operating costs, lower productivity, negative brand image and declining attractiveness to workers.

There are many examples to show how retrofitting is benefiting the bottom line for hotels. Take Six Senses Resorts & Spas’ Evason Phuket on the Indonesian island of Phuket. When it acquired the 1972-built resort, Six Senses decided to retain the major structures, so eliminating the negative environmental impacts of demolition, including contributions to landfill and resource demands for new materials. The installation of energy-saving measures, including a monitoring system to control timers for lighting, pumps and other systems, natural air ventilation and light in public areas and windows with UV film to save on air conditioning, has resulted in a 40% improvement in energy efficiency.

GREEN BUILDINGS USE ON AVERAGE 26% LESS ENERGY, EMIT 33% LESS CARBON DIOXIDE, USE 30% LESS INDOOR WASTE AND SEND 50% - 70% LESS SOLID WASTE TO LANDFILLS AND INCINERATORS, ACCORDING TO THE US GREEN BUILDING COUNCIL (USGBC)

A US$130,00 centralised mini-chiller system, which replaced split type air conditioning, saves US$44,000 per year in energy costs with a return on investment of three years.

The US$9,000 quantum heat recovery pumps, which extract heat from the ambient surroundings to heat water for the resort’s pool, saves approximately US$7,500 per year with a payback period of 1.2 years.

The construction of a self-sustained reservoir, which collects rainwater, has reduced the carbon footprint associated with water transportation and provided annual water savings of US$330,000; it’s taken just one month to recover the initial investment. An on-site US$115,000 bio-mass absorption chiller that converts garden waste into clean air conditioning has reduced fuel costs by US$41,000 annually, with a payback time of 2.8 years.

Another successful hotel retrofit is London’s landmark Savoy hotel, winner of a cluster of green awards and currently in the running for the Green Hotel of the Year Award (to be announced in November). The Fairmont Hotels & Resorts-managed Grade II-listed hotel re-opened last year after a £220 million refit that incorporated an entire range of 21st-century innovations within its august fabric.

Among the new technologies The Savoy has adopted is a central refrigeration plant with a heat exchanger, which will reclaim the exhaust heat from the kitchen appliances and re-use it to heat water supplies, and a combined heat and power (CHP) plant that provides electricity for the hotel, reducing its reliance on the national grid by approximately 50%. At £2.7m the CHP system certainly wasn’t cheap, but estimates indicate that it should pay back within five years. The hotel is also despatching food waste and scraps to a biomass-to-energy power plant, which feeds back resulting biofuel to the national grid. By diverting food waste from landfills in this way, the hotel is saving an estimated £22,000 a year, reducing its CO2 emissions by 11 tonnes and generating enough energy to power 20% of the guestroom lights.

As well as the potentially significant cost savings, businesses are also being lured to improve building efficiency by governments offering lower cost financing and tax credits and deductions. Measures such as India’s new energy-saving credits scheme and the UK’s CRC Energy Efficiency Scheme will encourage companies to implement sustainability measures.

China is trialling carbon trading as a means of meeting its pledge to make its economy 45% more energy efficient by 2020. It also has measures in place to make appliances more energy efficient, conserve water and focus more on “green” technologies, including the smart grid and environmentally friendly building materials, which will affect the way hotels are retrofitted in future. In Australia, the Tax Breaks for Green Buildings programme is due to come into force in 2012 and will give businesses a 50% tax reduction on energy-efficient improvements.

First things first

The question is, where do hotel owners seeking to retrofit begin? According to Martin Townsend, director of the Building Research Establishment Environmental Assessment Method (BREEAM), which rates buildings on their sustainability, it is important to gather as much information as possible at the start of the project.

“The first thing you need to do is to carry out an audit to determine the situation and how you currently manage it,” he explains. This includes information such as when the building was built, what the building regulations were at the time and how those regulations have changed. Hotels should also be looking at where their biggest impacts are and, if possible, how they compare with other properties within and outside the company.”

“It’s really important to know what you’re dealing with at that moment, otherwise how are you going to know what you can achieve with a retrofit and what your payback period is?” he adds. Knowledge also helps you establish which areas are the most important to tackle and the best materials and technologies to install. “The fabric of your building might be so poor that it’s not worth installing something like a building management system, for example.”

In a perfect world, though, every existing hotel would be upgraded with a building management system, one of the biggest technological developments in the industry in recent years. It allows hotels to turn off heating, air conditioning and other equipment when guests are out, putting the room into “sleep” mode and then turning them on when they return.

“You need people who know how to install the equipment properly and how to use it when it’s installed. Some of these technologies are so new and fast-moving that we need to top up the knowledge of existing professionals and to ensure that the next generation has the right skills as well,” says Townsend.

How others are doing it

There are plenty of other inspirational examples from outside the hospitality sector of what can be achieved with existing buildings. In the US, New York’s Empire State Building has been fitted with new windows that are four times better at retaining heat and keeping air cool. The development is part of a retrofit that will cut nearly 40% from the landmark’s power consumption and reduce energy bills by more than $4 million per year.

The showpiece of the 2010 World Cup, Soccer City in Johannesburg, South Africa, has had a retrofit on a grand scale—40,000 glass-fibre concrete panels are in place with 40% less global warming potential than panels made from cement. It also collects and reuses rainwater and is lit entirely with low-energy LED lightbulbs.

In Hong Kong, the 50-storey China Resources Building, in the process of a multi-year refurbishment, should cut its consumption of water by 36% per year and energy use by 11.4% when completed, through measures such as insulation to ensure an airtight facade and glazing that allows only 5% of solar energy to be transmitted indoors, reducing the need for air-conditioning. There are a few issues with the external fabric of the building because it was built in the 1980s, but developers refitting Sydney’s Perpetual Building, 39 Hunter Street, have shown that even a 95-year-old icon can be upgraded to the highest environmental standards.

The historic building has gas-fired generators that can reduce its electricity demand at peak times—beneficial both for the building’s tenants and the city’s grid system. Other measures include variable speed drives that increase the energy efficiency of the building’s pumps and using the water in its sprinkler tanks to help with cooling.

Retrofitting historic buildings

There are particular challenges of installing sustainability measures into historic buildings. You want to improve environmental performance without compromising their heritage, says Jeremy Blake, partner at architects Purcell Miller Tritton (PMT), and head of the firm’s Sustainable Heritage Hotel practice, known as Shh! Water and energy measures are generally less contentious, he says, because they can be “invisible”. Changes to window openings and the fabric of the building are more obvious, and such measures may be opposed by conservation officers, who are reluctant to consider any alterations even if they are sympathetic to the building. However, there are a growing range of products that are designed specifically to improve the performance of historic buildings, such as Histoglass double glazing, which fits into existing window frames.

Karin Giefer, Senior Sustainability Consultant for Arup New York, says that the problem with many historic buildings is that they were built to be efficient but that over the years the addition of technologies has made them less so. “They were often built with natural ventilation and then over time it has been fitted with air conditioning, which don’t work within the original design.” She adds that every historic building presents its own particular challenges. “Every retrofit is unique, depending on the building and where it is. The solutions are very different for every property.”

THERE ARE PARTICULAR CHALLENGES OF INSTALLING SUSTAINABILITY MEASURES INTO HISTORIC BUILDINGS. YOU WANT TO IMPROVE ENVIRONMENTAL PERFORMANCE WITHOUT COMPROMISING THEIR HERITAGE
JEREMY BLAKE – PURCELL MILLER TRITTON

Some of the solutions to improving the efficiency of period buildings will be straightforward: upgrading appliances and using more energy-efficient lighting. Insulation can be more difficult because an outside insulating wall is often not possible.

This means internal insulation, which can impact on historical finishings, such as skirting and coving, as well as result in loss of floor space. The development of a very thin insulating material, Aerogel, should overcome some of these problems and reduce heat loss by 80%. From a visual point of view, technologies such as wind turbines or solar panels may also be difficult for historic and landmark buildings, however some period properties have hidden roof slopes that can accommodate the panels discreetly.

Retrofits in the hospitality sector

More hoteliers are realising the environmental and financial benefits of upgrading their existing buildings to improve environmental performance and energy efficiency, reduce water consumption, and improve the quality of the space in terms of air, noise and natural light.

Arup’s Karen Giefer says there are three key challenges for retrofitting hotels. “You need to ensure you stick to the brand values and ensure that you don’t compromise on the quality and comfort for the guest. There are also the engineering challenges—basically how you fit new bits into an old building.”

When it comes to large retrofits, the opportunity only comes around every 10 to 15 years so it is important to get it right, says Brian Wilson, senior vice-president of design engineering and construction at Starwood Hotels. “You have to do these things at the end of equipment life cycles, otherwise you don’t get the payback,” he points out. “And if you don’t put the right equipment in place, you have to live with the consequences for a decade or more.”

As a result, he says, “to assess and capture all the opportunities available it is critical to look to outside sources [energy consultants] when you renovate”. It is also important to take the long view when considering what measures to implement. “You may not get the return on investment today but it could make sense in three years’ time,” he states.

As the cost of sustainable technologies falls, green retrofitting will become cheaper. Solar power is a prime example of how energy-efficient technologies are becoming more affordable. It remains expensive compared to other forms of energy, but costs are falling so rapidly—70% in the past five years, according to analysts Bloomberg New Energy Finance—that in a few years’ time it may be a viable option even without subsidies, particularly if fuel prices continue their upward trend.

The wisdom of whether to wait before implementing solar power depends where you are, of course. In Alice Springs, the Crowne Plaza, which was voted Asia Pacific’s most environmentally sustainable hotel by Hotel Investment Conference Asia Pacific (HICAP) last year, commissioned 1,326 solar panels in 2009.

The roof-mounted installation was the largest in the southern hemisphere at the time and has reduced the hotel’s annual carbon footprint by 420 tonnes of CO2 by producing enough to satisfy 40% to 80% of the hotel’s power requirements, depending on the time of year.

While energy has been the main focus of environmental efforts for buildings in recent years, there is growing attention to water conservation. “As water becomes increasingly constrained, governments will begin charging higher rates or limiting use among commercial properties,” according to Deloitte.

However, this is an area where it is easy to take action. “You can save up to 50% of your water consumption—and hotels are big consumers of water—with fairly straightforward solutions that cost very little,” says Jeremy Blake. These measures include dual-flush toilets, aerated showerheads and low-flow taps, along with rainwater harvesting and grey-water reuse.

At the Alto Hotel in Melbourne, Australia, the installation of low-flow taps and showers and rainwater tanks has reduced usage per guest to 123 litres per day, compared to the “best practice” set for hotels of 240 litres. As part of the property’s $8 million retrofit, the 1916 building was also fitted with double-glazing, HVAC inverters with sensor controls, LED lights and highly insulated walls. The total annual savings on water and energy are $50,000.

With such encouraging returns, it is no surprise that even owners of historic hotels are looking at extensive retrofits as necessary, not only in terms of the benefits they will bring to the environment, but also to their bottom line.

The biggest hotel groups have launched programmes to help their properties around the world achieve environmental improvements. InterContinental Hotels Group’s Green Engage has been awarded volume precertification status by US Green Building Council’s LEED (Leadership in Energy and Environmental Design), making it the first hotel company to receive this award for an existing hotels programme. Starwood, Fairmont (Green Partnership) and Marriott, among others, have their own programmes, which also use LEED as a framework.

LEED for Existing Buildings (LEED EB), one of the most established green accreditation schemes, is helping building owners and operators, including hoteliers, to maximise operational efficiency while minimising environmental impacts.

It does this by rating existing buildings as Silver, Gold, and Platinum, according to performance in seven areas: energy and environment, indoor air quality, materials and resources, water efficiency, sustainable sites, regional policy and innovation. The number of LEED EB-certified buildings has increased significantly from 17 in 2006 to 509 in 2011, with a total of 1,416 worldwide, including 116 hotels.

Spotlight on China and India

In Asia, there are 13 LEED-certified hotels, including seven recent LEED EB Platinum projects in India—all of them operated by ITC. The ITC Maurya in New Delhi, for example, uses solar power to heat its water, has a building management system to control its heating, ventilation and air conditioning systems, lighting and water management. It consumes 33% less water and 23% less energy than LEED benchmarks. Almost all of its solid waste is either reused, recycled or converted into manure by an organic waste converter and it recycles water to use in the gardens.

The region also has 73 hotel projects registered for LEED for Existing Buildings certification, according to property consultancy CB Richard Ellis. Hoteliers in Asia are also seeking certification from other schemes to demonstrate they are meeting environmental building standards, including Australia’s Green Mark, which has certified 13 hotels in Singapore, the ASEAN Green Hotels Standard, the China National Green Hotel Standard, Thailand’s Green Leaf standard and the India-focused EcoTel.

Hoteliers in emerging markets, such as China and India, may face certain barriers in upgrading their buildings. For example, while energy-efficient products are easy to come by in China, there is a shortage of skilled personnel to install and operate low-carbon retrofits, according to Rajendra Prasad Subedi, IHG’s Regional Director of Engineering, Design & Engineering, Greater China. Among the efficiency measures installed by IHG hotels in the region are systems to recycle water from dry cleaning machines, real time control card systems in staff shower areas, chiller condenser heat recovery systems, heat pumps, variable speed drives and chiller smart control systems.

“ITC has been in sustainable development for more than two decades and we have learnt to identify the challenges,” says Niranjan Khatri, ITC General Manager of Environment. “Sustainable development is still very new [in India] so you have to create your own guidelines. We have learnt the importance of training our own people—it is a constant process. Most people are stuck in old methodologies. We need new models,” he adds. “We cannot solve today’s problems with yesterday’s tools and hope to be in business tomorrow.”

IF YOU ARE AN OWNER, YOU HAVE TO THINK LONG-TERM AND SEE THE LONGER-TERM SAVINGS THAT WILL COME FROM A SLIGHT EXTRA EXPENSE AT THE BEGINNING
NIRANJAN KHATRI - ITC

Another challenge is the perception of extra cost, says Khatri, but “if you are an owner, you have to think long-term and see the longer-term savings that will come from a slight extra expense at the beginning”. But, he adds, “it is important to start with simple solutions.

There are lots of them out there. Once we decided to start on water conservation, for example, it was not difficult to make changes.” However, the company was left to make the commitment on its own because of a lack of suitable policies.

According to Jeremy Blake of PMT, the issues surrounding retrofits are constant irrespective of location: “Once they realise the potential, clients in these markets are very keen to incorporate sustainability elements because of the long-term benefits they bring.”

Retrofits: the future

Nonetheless, sustainable retrofits are likely to become the norm in years to come, thanks to increased pressure from government, shareholders and consumers. Particularly with energy bills that once made up 3%-5% of a typical hotel’s costs now representing up to 15% of costs.

As a result, says Blake, hotels are universally looking for ways to make significant energy and water savings. “Every project we get involved in now embraces green and sustainability measures, where it used to only apply to clients who were both the developer of a site and the end-user. I think there will be a tipping point where market demand means it becomes a necessity, not an option.”

Upgrading commercial property—including hotels—so they are more energy-efficient also brings other competitive advantages, including increased building value, higher rent premiums and increased occupancy rate. As Peter Verwer, Chief Executive of the Property Council of Australia, says: “There is a growing demand by building tenants for sustainability. To attract and maintain long-term tenants, building owners need to provide space with excellent environmental credentials.”

This is a view supported in Deloitte’s The Dollars and Sense of Green Retrofits report. It concludes that businesses should be upgrading their buildings sooner rather than later to stay ahead of the green regulatory curve, reap the incentives and remain competitive. “The earlier a company adopts green building practices, the bigger the gains it stands to reap.”

Integrating sustainable technologies into existing buildings will be key for hoteliers in the drive to improve their bottom line, reduce their carbon footprint and improve efficiency. While short-term upgrades bring quick fixes, hoteliers need to make sure they make investments that bring value both today and tomorrow. This will require an integrated and planned approach from the onset.

Mike Scott is an environmental and business journalist contributing to many newspapers and websites including the Financial Times, The Times Online, The Daily Telegraph, CNBC European Business and Sustainable Business.

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