Tenant Billing

The Dubai Supreme Council of Energy (DSCE) is the governing body tasked with policy development, planning and coordinating with concerned authorities & energy bodies to deliver new energy sources while employing a balanced approach to protecting the environment. One of the major initiatives that the DSCE has taken recently is to develop in 2010 the Dubai Integrated Energy Strategy 2030 also named DIES 2030. The DIES 2030 started to be deployed in 2011 to set the strategic direction of Dubai towards securing sustainable supply of energy and enhancing demand efficiency (water, power & transportation fuel). An important element of the DIES 2030 is Energy Efficiency and Demand Reduction. To address this particular domain, the DSCE has then developed a comprehensive Demand Side Management (DSM) Strategy associated with a detailed implementation plan. The DSM Strategy is addressing the ways that Dubai intends to reduce its demand for energy from today up to 2030 to improve the energy efficiency of the Emirate. The DSM Strategy has been developed around eight programs that all have clear objectives, defined goals and owners. For buildings, there are two separate programs under the DSM Strategy.

• Program 1 does target the new buildings to be constructed and is about defining the regulations and building code that new buildings have to follow. This program is owned and administered by the Dubai Municipality.
• Program 2 does target the existing buildings of Dubai and is about retrofitting the energy inefficient buildings so that electricity and water used by these buildings can be saved. This program is owned and administered by Etihad Energy Services Company or Etihad ESCO.

In February 2014, the Dubai ESCO framework was officially released and published. It is composed of four main elements that were developed during 2013 in cooperation with the market stakeholders:

• An ESCO Accreditation Scheme
• Standard Contracts for Energy Performance Contracting
• Measurement & Verification Guidelines
• A dispute resolution mechanism

Al Etihad Energy Services Company (abbreviated as Etihad ESCO) was established in 2013 as an initiative by the Dubai Electricity and Water Authority (DEWA) under the leadership of the Dubai Supreme Council of Energy (DSCE) to create a viable market in Dubai for building energy efficiency services.

Etihad ESCO is the official Dubai “Super ESCO’’. A Super ESCO is not competing with ESCOs but on the contrary is mandated to organize and establish a market for ESCOs.

Etihad ESCO owns the Dubai buildings retrofit program from the DSM Strategy and has clear goals and objectives. An estimation was made as part of the DSM Strategy study revealing that out of the 120 000+ buildings that are in existence in Dubai, 30 000 of them would be suitable for an energy retrofit. These 30 000 buildings are of all sort and size. They comprise residential and non-residential buildings as well as government and other privately owned facilities. By 2030 the DSM Strategy has further estimated that 1.7GWh of Electricity and 5.6Billion of Imperial Gallons (IG) of Water can be saved each year. These savings would result in a carbon dioxide abatement of 1 million tons per year. These figures have been set as the 2030 targets for Etihad ESCO to achieve and are summarized in Figure 3. These targets are ambitious but they can be reached. To not miss the target, annual objectives up to 2030 have also been defined for Etihad ESCO.

The basic principle of EPC is that the initial investment that needs to be made in a building to generate energy savings will itself be financed through the generated savings over the years. A loan will initially be contracted through a Financial Institution or a Green fund in order to finance the initial investment. An ESCO will then use that investment to implement Energy Conservation Measures (ECMs) into the building. The savings generated by these ECMs will then be used to repay the loan over a certain number of years. During the repayment period, the owner will have no share of the savings or only a small share so that the rest of the savings are used to repay the loan. At the end of the repayment period, the owner will then benefit from all the savings that are generated. The EPC model works because the ESCO that will perform the work is guaranteeing the energy savings. This guarantee is key as it secures the repayment streams for the lender. The ESCO should be carefully selected and be able to provide that guarantee during many years.

After completion of the work and commissioning of all the ECMs, the ESCO will regularly perform measurement and verifications (M&V) in order to check that the energy savings do materialize. This M&V operation has to be made during the whole contract duration and is the tool to evaluate the performance of the ESCO and the guarantee that was initially committed.

Iris International became a RSB accredited ESCO company on 12th March 2018.