Case study: Deployment of smart meters
Independent consulting firm Westbridge Advisory develops strategies that help real estate companies to cut operating costs in the properties they manage. In an initial case study, a green electricity pool for tenants was established across an extensive portfolio. The project also involved large-scale deployment of intelligent electricity meters, known as smart meters.
The approach taken by Westbridge Advisory could set a precedent for the real estate industry: the tenants in the case study cited above are reporting savings of 37 per cent for electricity and 35 per cent for gas. At the same time, the associated CO2 emissions are expected to fall by around 22,000 tonnes in 2017, equivalent to the needs of almost 1,200 households in Germany. So how has it been possible to achieve these figures?
A solution based on an integrated concept
The initiative was prompted by the client, who wanted to switch his entire office property portfolio to renewable energy. Westbridge Advisory was commissioned to develop an integrated concept for supplying these properties with energy. In line with the client’s strategy, the concept envisaged optimising energy procurement, introducing an electricity pool for tenants and establishing a tool for real-time measurement of actual energy consumption in every property. Another key aim from the start was to minimise the impact on asset management and property management during implementation.
Challenges in the start-up phase
The advisors from Westbridge Advisory faced several challenges during the start-up phase. Firstly, the quality of the available data was unsatisfactory. A significant amount of work and extensive communication were required in order to identify, digitise and analyse missing information. Secondly, the tenants needed to be convinced of the benefits of the green electricity pool, and joining the pool needed to be as easy as possible in order to gain their support. To enable this, standardised processes were developed, e.g. for fast switching of energy provider. In what is still a relatively new market, it was also crucial to select the best provider for installation of the smart meters and to assist the provider with upgrading the old meters. Technical upgrade work was necessary in 70 properties in total.
Implementation in three steps
Westbridge Advisory began implementing the new energy concept by conducting a detailed and transparent tendering process to select the right energy provider for the client. Some 24 utility companies took part in the first round. After in-depth evaluation and moderation, three companies were selected to go forward to the final round, where they were able to present their proposed solution in person. In this final selection process, the client ultimately followed Westbridge Advisory’s professional recommendation.
The second step involved setting up the tenant electricity pool. A clearly structured and efficient process landscape made it possible for the various tenants in the office properties to switch to the new provider quickly and easily. An online portal was launched to provide information about the switching process and the benefits. The portal enabled the individual steps involved in the process to be visualised, and it also presented key messages in an appealing way. The provision of an online platform proved to be a great success.
A first for smart meters in a German portfolio
The final step in the overall process was the installation of the smart meters. These intelligent electricity meters are supported by an end-to-end energy management system, the introduction of which enjoys full legal protection following the recent deregulation of metering point operators. The use of smart meters in a German portfolio and a green electricity pool of this size was a first and an innovation that won the project the 2017 German Real Estate Manager Award in the Sustainability category. Smart technology enables hundreds of meters to be monitored and analysed in real time. In turn, this analysis gives the portfolio holder information on possible optimisation measures that can often be implemented with minimum resources, such as brief training sessions for tenants.
Outcome of the project
The client is so pleased with the commercial and environmental efficiency of the solution that he now actively promotes the tenant electricity pool to his customers. What makes the new system so special is that it benefits tenants, owners and the environment alike. The project also provides powerful proof of the economic benefits of intelligent sustainability measures in the commercial real estate sector.
An article by:
Rüdiger Salzmann, real estate economist and managing director of Westbridge Advisory GmbH