Turning Business Green: The experience of EMS Company in the Arab World

June 2007

By: Nina Robertson

When Khaled Bushnaq decided 16 years ago to set up a firm that would provide technical consultancy in the field of energy conservation, most people were more than a bit skeptical. Energy conservation was almost entirely unheard of in the Middle East, and businesses were certainly not factoring energy-saving measures into their budgets.

Ignoring the cynics, Mr. Bushnaq, along with a business associate, established Energy Management Services (EMS) in Jordan in 1991, with a paid-up capital of JD30,000. Two years later, the company received the Special Recognition Award at the 16th World Energy Congress in the U.S. Today, EMS capital is JD2 million and is the leading energy service company (ESCO) in the Middle East, providing its services to over 500 companies in Jordan and the region.

After setting up new headquarters in Dubai in 1997, EMS last year opened additional branches in Saudi Arabia, Qatar, Kuwait and Bahrain. Since inception, EMS has implemented projects that have delivered savings worth millions of dollars in investments and operational expenses for its clients – and made the Middle East a more environmentally-friendly place.
Casting a new light
Mr. Bushnaq came up with the idea of establishing EMS after the second oil crisis of 1970s. At that time, the ex-engineer was living in England, and was impressed by the UK’s promotion of energy conservation. “We were taught simple but very effective energy saving measures, like how to wash a car using a cup of water,” Mr. Bushnaq told Jordan Business. “I wanted to implement what I learnt in Jordan.”

Trying to create an unconventional industry in a virgin market proved at first to be an uphill struggle; it took some time before the company was able to secure any clients.
Recalling the beginnings of EMS, Mr. Bushnaq said: “We were basically talking Chinese to almost everyone we approached. People thought energy was something uncontrollable and that energy conservation would be a financial burden. It was very difficult convincing people that they could actually save money [by conserving energy].”

Realizing that credibility would help the company get a following, EMS began offering its services free of charge to some local big name corporations. It also created the Shared Energy Scheme, a program that provided EMS services to clients who were either unconvinced about seeing a return on investment or who could not finance implementation of the project. Under the scheme, clients are not required to make an initial investment. EMS finances the project and receives payments from the clients’ monthly energy savings. When companies started seeing an immediate reduction in their energy costs, word spread and EMS’s client list grew. So, too, did the company itself.

Cleaning up their Act
Although regional businesses are more environmentally aware than ever before, EMS’s main selling point continues to be its cost-cutting services. According to Mr. Bushnaq, EMS can save businesses up to 30% in total energy costs by using technology to cut their consumption of electricity, water and gas. The services EMS offers include energy audits designed to identify the pattern of consumption in existing buildings and then identifying the best energy-saving measures. “Once we understand the energy consumption, we start looking into where energy is being consumed but not delivering a service, for example, lights being left on in an empty room,” Mr. Bushnaq explained.

The energy saving measures EMS will recommend range from what the CEO describes as “the simplest forms of saving energy,” such as turning off equipment when it is not being used, to more complex measures, including tackling wasted energy in escalators and lifts. Other measures include efficient lighting, reduced air-conditioning consumption, efficient boilers, decreasing refrigeration costs, reduction of heat loss through steam and installing renewable energy sources such as solar panels and windmills.
EMS also tracks its clients’ energy consumption levels from its Central Command Center in Dubai. Digital meters are linked to a client’s facilities through telephone lines and can monitor consumption levels on an hourly, daily, weekly and monthly basis.
While the company’s offerings have remained the same, EMS’s focus has shifted. The region’s construction boom has opened up a massive market for EMS, and the company is increasingly focusing on new facilities. It has carried out detailed analyses of hundreds of buildings at the design stage, from factories, hospitals, towers, residential and commercial buildings to resorts, hotels and other establishments that demand a high level of energy and water consumption.

Taking the LEED
Currently, EMS is helping over 500 businesses improve their energy efficiency. Most of them are large corporations and government institutions in Jordan and elsewhere in the region. According to Mr. Bushnaq, more developers and companies in the Middle East are working towards achieving LEED (Leadership in Energy and Environmental Design) certification, an official recognition that was developed by the U.S. Green Building Council, which is based on a ratings system. In fact, Mr. Bushnaq has seen a change in the way developers operate in the last few years. Instead of focusing on who can build the tallest or largest building, developers are now starting to tout their environmental responsibility. “People are not only becoming more aware of the cost of energy, they are also more aware of the environmental impact,” explained Mr. Bushnaq. “It’s catching on fast and becoming a trend. Generally, businesses want to become environmentally friendly because it is beneficial for them to be labeled as that. Developers are very keen on the Green Building ideas.”

Unsurprisingly, the Gulf states are taking the lead in this area. In Dubai, Emmar Properties has called on EMS to help it conduct an Energy Value Analysis (EVA) across all of its projects, which includes the illustrious Burj Dubai. Investment and real estate services firm Union Properties has also assigned EMS to carry out energy saving services on its projects, the latest of which was MotorCity, the region’s first fully integrated automotive and motor sports facility.

In December 2006, EMS launched an innovative project alongside the Dubai Municipality. The Sewage Reduction Program is designed to reduce water usage to minimize the burden on Dubai’s sewage network. As an incentive for building owners to adopt the scheme, EMS will be involved in preparing and installing the devices, which Mr. Bushnaq says will reduce the volume flow by a minimum of 30%.

One of EMS’s current projects is Energy City Qatar (ECQ). A $2.6 billion project, ECQ is the Middle East’s first hydrocarbon industry business center, for which EMS will provide tailor-made “green” solutions. Through these solutions, experts are predicting that ECQ will become one of the region’s most viable environmentally-sound business centers.

Opening the Gates to Investors
As the construction boom continues to sweep across the region, the cost of energy is also increasing. This has been a major challenge for property investors in recent years. According to EMS, Jordan’s energy demands are expected to reach 2,399 mega watts over the next decade, costing the country a whopping $3.1 billion. This substantial figure only serves to underscore the importance of energy-saving schemes.

Developers and businesses in Jordan and the UAE have lauded EMS for “drastically” cutting their energy costs. The Commercial Bank of Dubai head office, for example, reported a 15% reduction in its annual energy expenditure over a period of 10 months; the DNATA building in Dubai witnessed a 50% saving.

At the same time, new investment laws in both Jordan and Dubai have helped attract several hundred million dollars of investment in the real estate and property development sector, resulting in the construction of new “green” towers and luxurious residential complexes. “I think this highlights the importance of energy efficiency and environmental awareness that is taking place in the region with big investors and developers,” Mr. Bushnaq said. “It is a trend that will definitely continue, especially in light of developers’ and investors’ move towards the Green Building concept.”

Graining ground and growing
Indeed, with the Green Building concept gaining ground, last year saw the launch of the Emirates Green Building Council (EGBC), of which EMS is a founding member. Made up of a variety of companies and professionals from across the country, the EGBC seeks to promote Green Building principles and, in the process, protect and conserve resources. “EGBC is the only one of its kind in the Middle East. It is establishing the benchmark and the criteria for all of the new developments,” explained Mr. Bushnaq. “No permit will be issued to a new building if it does not meet the minimum criteria set out by the Green Building Council. This is something that has to happen everywhere in the region.” Mr. Bushnaq added that there are plans to establish a Green Building Council in Jordan in 2008. Putting energy savings costs aside, what is perhaps most commendable about EMS are its continuous efforts of spreading the “green” message in a region where environmental awareness lags far behind others. The company has been instrumental in promoting environmental campaigns alongside the Jordanian and UAE governments to encourage people to change their behavior in and outside of the workplace.

A great deal has been achieved by EMS in 16 years, but Mr. Bushnaq believes that there are greater strides for the company to take. “The region is still a new market for us and there is still so much that can be done in this field,” said Mr. Bushnaq. “Luckily, people know now the importance of environmental awareness and energy conservation; it is the future.”