How the all-electric, all-digital transformation is paving the way for future success

Annick Villeneuve

Northampton, MA –News Direct– Schneider Electric

Thanks to the electrification and digitalization of properties, today’s real estate investors, owners and operators can achieve these ambitions and make their facilities sustainable.

If you own or operate commercial real estate, this blogging series could be one of the most important things you read over the next few months. You will understand why the “all electric, all digital” properties will play a crucial role in the success of your business, allow you to understand what these terms mean and how they can have a positive impact on your buildings, your operations, your tenants and your results. .

Schneider Electric’s vision for buildings of the future is particularly relevant to today’s commercial real estate market. Its leaders will have portfolios that will fully embrace sustainability, hyper-efficiency, resilience and the people-centered approach. Thanks to the electrification and digitalization of properties, today’s real estate investors, owners and operators can achieve these ambitions and make their facilities sustainable.

So what is the commercial real estate market asking for today, and what kinds of electrical and digital upgrades should you consider?

A whole new world for commercial real estate

Today’s challenges in the commercial real estate market are unique and unprecedented, and “all bets are on” to predict how things will develop. Nonetheless, this will undoubtedly include the need to re-attract tenants, minimize operating costs and meet sustainability goals while complying with regulations. This will cause some introspection within organizations as they attempt to determine what tools are needed to be successful under the post-COVID “new normal”.

Against this background, I guess your building’s electricity supply has been a relatively minor concern. If the building’s designers ensured that it complied with electrical codes, that was enough. And energy bills may not be a significant percentage of operating costs, so you pay them. As long as the building is functioning, you may find that there is nothing to worry about.

However, when you start to think about How? ‘Or’ What electricity affects almost every aspect of building operations and tenants, you can begin to appreciate its real value. This value and the way you manage it continues to increase, and building codes aren’t changing fast enough to meet the needs of the market.

In 2030, you might have a building to code, but it might be totally unusable and unsaleable. It’s not that the code is no longer needed; it’s about staying one step ahead to anticipate future needs. Here are three trends to consider:

1. We no longer burn “things” in buildings

When we say it will be an “all-electric future” what do we mean? Simply put, we will stop burning things, and there are a lot of “things” causing this fatality.

An article in the New York Intelligencer noted that “the era of climate denial is over, thanks to extreme weather conditions, the march of science and the historic work of activists … The cultural cachet of the oil companies is rapidly approaching that of the companies. tobacco… Virtually every leader in every country and every big figure in every company and industry now feels compelled – due to protests and social pressure, economic realities and cultural expectations – to at least show their support to climate action. “

While responding to the European Commission’s proposal to bring the EU to net zero emissions by 2050, a McKinsey report confidently states: “Most of the technologies needed to decarbonise the building sector are already available” . However, to achieve the target, “gas consumption in buildings should also be reduced by more than half”.

Driven by government mandates and corporate sustainability goals, CRE buildings are encouraged on the path to 100% electrification. We receive many calls from real estate investors and investment trusts asking us how to improve their portfolios so that they are greener, more sustainable and ready for this new future.

We often recommend:

But how can these upgrades be profitable and generate a return on your investment?

The capital could come from the many organizations and funds seeking greener investments in companies demonstrating sustainable practices.

Richard Kelly of Legal & General Investment Management said: “Environmental, social and governance [ESG] investing is now at the forefront… Millennials in particular want their investments to have a low carbon footprint… People say they don’t want fossil fuels, but renewables. In fact, futurist Jeremy Rifkin predicts that the future of the fossil fuel industry is bleak, stating: “Citigroup, a big bank, says that could represent some $ 100,000 billion in assets stranded in civilization. fossil fuels. The Economist The magazine’s intelligence unit said it was at least $ 40 trillion.

2. Support the explosive growth of electric vehicles

To reduce U.S. greenhouse gas emissions by 50% by 2030, President Biden recently signed an executive order that half of all new cars sold in the United States be electric. by 2030 (it is currently only around 2%). ICCT reported in 2020 on EV targets announced by other major countries. For example, Canada and Singapore pledge to become all electric vehicles by 2040, France to all passenger and light commercial electric vehicles by 2040, Germany to all passenger electric vehicles by 2050 , Denmark to all electric passenger vehicles by 2035 and the United Kingdom to all passengers and vans. VE by 2035.

What will be the impact of these commitments on the built environment?

Think about it: about 90% of people’s lives are spent indoors. This is when they want their EV to charge. Every building in the world, whether it is a residence, an office, a shopping center or a hospital, will take on the additional role of vehicle charging station. Some cities in the United States already require that 25 or 30 percent of new parking lots and lots must be capable or ready to be replaced with electric vehicles.

McKinsey estimates that “up to 130 million electric vehicles could share the world’s roads by 2030 … commercial on-site charging will need to become a standard feature of buildings over the next ten years to meet consumer demand.” . For existing buildings, this means the need to upgrade. “Charging electric vehicles on a large scale requires careful planning of a building’s power distribution system as well as the infrastructure of the local power grid. “

This type of infrastructure extension will require a building permit and possibly consultation with the local utility. It will also require selecting the safest and most optimal charging, engineering and installation solutions, and, of course, having sufficient capacity.

Fortunately, today’s technology allows this upgrade to easily adapt to a building’s electrical switchgear and be scalable if needed. You’ll also need the digital infrastructure to manage it, with analytics to balance load requirements and maintain building comfort and resiliency.

Serving electric vehicle owners and fleet charging needs will be a huge opportunity for CRE professionals to improve the value of their properties and use the convenience of on-site charging as a differentiator to attract the most tenants. research. By starting now, you will anticipate the electric vehicle charging regulations that are likely to come for other parts of the world.

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