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The extent of influence of digital

How profound is the impact of a digital ecosystem on efforts towards greater energy efficiency and towards reducing the total cost of ownership in the GCC region? Charmaine Fernz of Climate Control Middle East has the report…

  • By Content Team |
  • Published: November 19, 2021
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A post-pandemic world has stressed the need for a digital transformation, and it is becoming obvious by every passing day that companies looking at business growth cannot afford to sidestep the fast-evolving IT ecosystem. Srinivasan Rangan, Director of Marketing and Product Management, Rheem MEA Manufacturing, is of the view that the HVACR industry is undergoing a decisive digital transformation. “Customers today are looking for superior home comfort, energy efficiency and sustainable solutions that are pushing innovation boundaries to advanced business models,” he says.

Digitalisation in the HVAC industry is not just about smarter solutions but enhanced business efficiency in the long run. Elaborating on this, Visakh Tom Jose, Sales Manager – Air Solutions, LG Electronics Gulf, speaks of how digitalisation also improves operational or service capabilities of a building by leveraging digital technologies and digitised data. “This has been an ongoing process within the HVAC industry but has witnessed a sudden surge in the last few years,” he adds.

ARE WE READY, THOUGH?

With a quick uptake of new technological advancements, the consensus is that typically, digital solutions need to be variable and scalable, depending on the amount of equipment and size of a facility. Atif Masud, Director, Service, and Aftermarket, Carrier Middle East Limited, says: “Most customers consider digitalisation an investment for the future, aligned to industry trends. The entire digiitalisation process is also part of a long-term, multi-phased plan, with costs spread out over the project to realise the benefits.”

The pandemic has fast-tracked technological advancements across every sector, and the HVAC industry is no exception. However, the general view is that there are several factors to be considered before adopting the process, such as the scope of services brought under digitised data and the extent of data design and analysis.

As Jose puts it, “The scope is very wide, and there is also a growing need for tailor-made solutions.” These factors, he says, affect costs, which include designing an HVAC system with embedded software to extreme comprehensive control and monitoring of all MEP services, lifts and CCTV – all connected to the cloud. These elements, he adds, constitute approximately just five per cent of the total MEP package price.

Further, associated costs play a vital role in digitalisation. Citing an example, Jose says: “If one has to take only the HVAC systems, central remote controlling systems start from a point of only 16 units to more than 8,000 units. Again, as the scope changes, functional features also change, which can affect costs.”

It is commonly known that technologically advanced systems accrue associated costs that include cloud-based IoT solutions, smart sensing components, or thermostats integrated with mobile applications.

Sharing a similar point of view, Rangan says: “Digitalisation of HVACR equipment involves dedicated costs for research and development, safety, performance and reliability. The process would also require existing controls to be upgraded to incorporate the new technology.”

One cannot but ignore that there is a significant cost associated with developing technology infrastructure, such as cloud-based data storage systems, data security, building management systems and smart buildings. Interestingly, the pandemic has taught a vital lesson – there is drastic imminent change and blurred boundaries through technology. The HVAC industry, though legacy bound, is slowly but steadily adapting to changing scenarii. The question that arises is whether retrofitting is the best option? The answer is a simple ‘yes’.

RETROFITTING: BOON OR BANE?

Deployment of new technology comes with a host of changes. In the HVAC industry, adapting to the whole new world of digitalisation is a long-drawn process. Beginning with the construction, though, contractors will perform the retrofit work; however, it is the homeowner who must have a need. Rangan asserts that retrofit requirements can stem from end consumers or individual homeowners but should be handled by trained HVAC professionals.

Interestingly, digital HVACR solutions are better received by homeowners, compared to legacy systems. Retrofitting of existing buildings makes them more useful due to better optics and functionality. The general conclusion is that the implementation of advanced systems reduces overall power consumption by adapting and automatically adjusting system settings to custom-suit a homeowner’s comfort.

Rangan further explains that retrofitting existing buildings with digitalised solutions is the need of the hour. “The benefits are immense, such as improved efficiency, superior user interface and integration capabilities with building management systems,” he asserts.

COST AS A FACTOR

Industry reports on digitalisation suggest that building owners usually absorb the investment cost, upfront. The benefits are later accrued from the savings and returns of the digitalisation initiative. As Rangan says, everything depends on the type of technology used.

Not all digital solutions would lend themselves to a full-building retrofit and can be carried out without disturbing the HVACR system until the completion of final commissioning. Typically, this takes a few hours to complete. However, if this involves component upgrades, at least a part of a building may need to be shut down, he says.

Jose points out that digitalisation does not affect the way existing mechanical systems work, though, nor does it change internal control logic within the systems. By digitalisation, all mechanical systems are connected to a digital platform to extract data, based on which analysis is done, and machines are instructed by an external source to function in a particular method to enhance the service and operational level capabilities of the building.

Businesses today are looking for cost-effective methods, and retrofitting digitised equipment can be financially beneficial. ”Digitalised solutions are the basic and cheapest way of attaining the first step of energy efficiency in a building,” Jose says.

Crunching numbers, he says that digitalisation of existing HVAC, lighting and plumbing equipment in a building, can achieve approximately 5-15% energy efficiency. Digitalisation retrofits are not just about connecting systems to the central system or cloud; they also involve using the right software to reach an efficient ROI. Interestingly, it is believed that retrofitting an old, inefficient HVAC system and other services with the inverter-based HVAC system and efficient services, along with a tailor-made digitalised solution, can also bring at least 50% energy savings to a building, depending on the site.

However, retrofitting is an ongoing process that has an impact on several divisions and, more importantly, requires a constant update of information. Training is key to understanding subjects like performance optimisation of the system, using building controls systems, and analysing data to deliver proactive health and predictive insights. Now, that is something to ponder and plan.  

OVERCOMING CHALLENGES

With every opportunity comes a challenge. The question is, ‘how do we overcome it and drive towards profitability?’ Digitalisation in the HVAC industry to be future-ready requires overcoming many challenges, including a change of mindset or even mere availability of software solutions. Raising an interesting point, Masud says the financial aspect is one of the key barriers for building owners when it comes to digitalisation. The initial investment costs, in some cases, can be high and may be seen as an obstacle to quick investment decisions.

While some may believe they can overcome the finance-related challenge, they may confront a technological hurdle, stemming from the fact that not all digital options may be universally suitable for all solutions. “This may require on-field or laboratory testing, to be deemed safe and efficient for use,” Rangan says.

Training homeowners is another factor to be considered, as some may not be comfortable using advanced digital solutions and may prefer analogue controls. Data security follows next, as many digital devices may need to be integrated with homeowners’ Wi-Fi connection or may require device permissions to access location data.

“Additional on-ground challenges could include upfront costs, privacy and data protection,” Rangan warns, adding that in complex systems, information systems need to be protected to detect potential attacks. Companies also need to invest in training HVAC technicians while constantly educating them on multiple technologies for maintenance. Then, there is a risk of delivering obsolete technology. For homeowners who prefer digitalisation, there is a need for expert knowledge, multiple changes and customisation.

THE SUSTAINABILITY APPROACH

Any digital transformation is a mere journey. It is a consolidated effort by a city, country or nation towards becoming more future-ready, which is ongoing and constantly evolving. The next key factor is being sustainable. Interestingly, there is a growing motivation among building and business owners across the GCC region to pursue smarter solutions. Rangan says: “Market drivers are looking for efficient and sustainable initiatives. The technological benefits of better user interface and efficiency are some of the decision-making criteria.”

From a government perspective, there is no mandate particularly for digitalisation in new buildings. However, many policies are being implemented for driving digital transformation in the UAE across various sectors. Jose cites the UAE Digital Government Strategy 2025, which outlines various activities leveraging emerging technologies to build capabilities. “We expect mandates to incorporate digitalisation in buildings to be formed very soon,” he says. “This is being done to drive sustainability and help the UAE achieve the ultimate aim of UAE Energy Strategy 2050.”

The Dubai Government also launched a digitalisation strategy, in 2017, to boost government performance at all levels and to create a new vital market with high economic value. The UAE Vision 2021 and UAE Centennial are also strategies that have strong themes around digitalisation and transformation.

BEING FUTURE-READY

With a strong push by governments not just in the UAE but across the GCC region on digital transformation, the trend is evolving and buildings are getting smarter. Today, it is all about the Internet of Things (IoT) and Artificial Intelligence (AI), both of which, when incorporated, will make any country future-ready.

IoT platforms are enablers of smart, healthy and connected buildings. As Masud puts it, “Digital technologies, such as cloud analytics, big data and AI/ML are changing the way the industry creates value and delivers service.”

Many markets are shifting towards sophisticated controls for HVACR equipment. AI and IoT are part of every product development. Rangan says: “Features, like Scheduling, Geofencing, Learning Algorithms, and Temperature Setbacks, are popular with homeowners. Moreover, remote controlling HVACR equipment through cloud-based solutions are next on the list for new homeowners.

The potential for AI and IoT is limitless, even providing service reminders and allowing manufacturers or suppliers to remotely access system parameters to analyse the system’s overall health and maintenance requirements.” Energy-service companies (ESCOs), or similar businesses, could provide comprehensive energy packages, such as smart controls combined with heat pumps and renovation measures, aimed at delivering energy savings across a range of end uses. Smart optimisation and control technologies, as well as IoT, would enable better cooperation with service providers and equipment manufacturers.

AI and IoT are the future. While IoT already plays a major role in the digitalisation of HVAC services, AI is expected to follow soon enough. There is a precedent of uptake: Building Management Systems (BMSes) connected to the cloud are becoming a common trend across retrofits. “Around 80% of clients going for an HVAC retrofit opt for IoT,” Jose says. “AMC through IoT is also slowly picking up, because it enhances troubleshooting speed, thereby reducing downtime.” Simply put, the potential is vast; it seems a matter of time before the region starts seeing a greater uptake.

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