Industry Update
Opinion Article26 January 2015

Smart ways to control energy costs

By Mark Sait, Founder and CEO at SaveMoneyCutCarbon

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The business case for energy efficiency in the hospitality sector grows stronger month by month. It is driven by three factors – energy prices, requirement to cut CO2 emissions and improving market valuation through a better bottom line. The need to control utility costs is most pressing, given that they rise inexorably, even with the temporary relief offered by recent falls in oil prices. The trend, most analysts agree, is always up – and the past ten years have reinforced this, with a doubling in the price of energy.

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It is no easy task to even begin the process of executing a sustainable energy efficiency strategy in a single hotel, let alone a group but there is a growing body of evidence that reinforces the case for change.

There are clearly many challenges, not least pressures on time and lack of appropriate knowledge as well as the fact that it is not easy to identify who exactly has responsibility for "green" decisions, with both engineering and finance departments potentially the executive key holder. It is very important for these barriers to be dismantled if sustainable savings strategies are to succeed.

Meanwhile, the efficacy of energy efficiency solutions continues to improve year on year, helping to reduce return on investment times as well as some of the complexities.

I wrote about the advantages of LED lighting in my first article focusing on the business value of energy efficiency in the sector. Now I'd like to turn to the benefits of smart controls, focusing in this article on the opportunities for cost-cutting in heating and ventilation.

The business sector that never sleeps has to contend with a rapid staff turnover and the constant change of guests and other customers. The first gives management the challenges of effective staff training in best energy efficiency practices while the second adds to the issues of efficient energy management.

Changing staff behaviour and attitudes is an important element in energy efficiency but the greatest gains are undoubtedly technical – and invisible. This is one key reason why smart HVAC controls should be a serious consideration for every hotel property.

It is crucial that any energy efficiency solution does not have a negative impact on the daily life of a busy hotel, either during installation or afterwards. There should be no adverse effect on guest satisfaction.

Equally important, any proposed energy efficiency solutions need to be based on sound business logic and offer a very clear idea of return on investment timings. As a key part of this, the hotel management should be able to measure accurately and understand current consumption rates, identifying the "quicker wins" and so prioritise investment decisions.

Any solution should also provide the means to measure and monitor, providing detailed feedback for management, allowing it to direct any adjustments needed and also accurately track savings against the payback schedules.

One prime candidate for energy efficiency in the sector is a property's HVAC, with a focus on the guest rooms. We know that hotel guests spend very little time inside their rooms. In fact, our extensive research at a wide range of hotels shows that hotel guest rooms are often empty for up to 46% of any 24-hour guest stay so here is a prime target to staunch the cash drain in heating or cooling a room.

The single most important piece of information needed for any HVAC efficiency solution is whether a room is occupied and the most effective way to find out is through a combination of sensors, including an entry-door monitor and one or more occupancy sensors.

Smart guest room controls should favour a combination of infrared body-heat sensors and an intelligent algorithm to detect whether a guest is in their room.

This efficient mix of an entry door monitor and occupancy sensors is essential. Without them, either the system must take a long time to determine if a room is unoccupied, or risk the occupants' comfort while they are sleeping.

And if controls take a long time to determine occupancy, the ability to achieve energy savings is lowered dramatically. We have also found that systems which do not use a combination of sensors to determine occupancy can create unnecessary guest discomfort.

To minimise disruption and loss of business, the smart controls need to be based on the best wireless technology that connect the micro sensors simply because this avoids the need for complex cabling so ensuring that installation is very quick – equivalent to the room being cleaned – which means that rooms do not have to be taken out of service.

Effective smart controls should be able to easily check whether the guest is in-room and, if not, can switch that room to a money-saving, energy-saving mode after a suitable period – usually 30 minutes.

The more intelligent wireless smart controls differ radically from many key card solutions, ensuring that the guest is not even aware that system is working to save the hotel money.

Guest satisfaction is all-important so the system needs to be under their control when they are in the hotel room, using the existing thermostat. It is this flexible and automatic functionality that gives hotel managements the confidence to commission installations.

Of course, any smart controls system would need to be thoroughly tested first and would need to have the capability of monitoring accurately the property's HVAC units, providing detailed a wealth of data and reports on energy usage.

One property in a busy regional city location that has installed smart guest room controls is reporting average energy savings of between 35-45%, with energy savings of £35,000 annually and a return on investment of less than 14 months. As a welcome adjunct, the reduction in CO2 emissions has helped the property to meet its carbon reduction targets.

This is against a backdrop of a rapidly changing energy market where some analysts predict at least a doubling in prices over the coming decade. Time will tell whether this forecast is accurate but it is certain that prices must rise ahead of inflation over the next 17 years as the UK reshapes its energy production and purchasing strategies.

Lack of productive capacity, allied to uncertain market prices and the need to cut CO2 emissions – the energy trilemma – pretty much guarantees that cutting prices is a near impossibility.

That's why we have seen the hospitality sector taking a more proactive view of utility costs, as the second biggest expense after labour – and rising. It has become a business imperative to search for the means to take back control of rising bills. Intelligent management of HVAC systems is a proven ways to achieve this goal.

Mark Sait

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