Building Retrofits in Ras Al Khaimah

Case study for hotels

June 2022

Dr. Pablo Izquierdo

Head of Energy Services Section
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of RAK Municipality Department is strictly prohibited
Building Retrofits is one of the key pillars of the Ras Al Khaimah Energy
Efficiency & Renewables Strategy 2040

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Efficiency in existing buildings is addressed through the Building Retrofits
Program and delivered by Energy Services Companies (ESCOs)

Number of buildings
retrofitted

150+
2021 YE

At least 3,000 buildings will be addressed with comprehensive retrofits by 2040

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The Building Retrofits program addresses the main building types, initially
focusing on government buildings and gradually extending to other segments

Ras Al Khaimah
Hotels

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Why is the Building Retrofits Program of Ras Al Khaimah interesting for hotels?

Reem acts as a super-ESCO with a facilitator role to ensure Standard Energy

smooth completion and operation of retrofit projects Performance Contract
Templates
There is a long list of ESCOs accredited by Reem

A simplified tendering process has been developed

to facilitate retrofit projects

Standardised contract templates have been

developed and are available

Financing mechanisms can be available (shared

savings)

Retrofit projects can be integrated with an energy

management process, supporting continuous improvement

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Retrofit project development follows a simple process and Reem will support
hotels during the whole process
Feasibility assessment Contract signing

Pre-
Mini Walk Tendering
qualification Contracting Construction Operation
Through Audit (RFP)
(EOI)

1 week 4 weeks 8 weeks 4 months 6-12 months 5 to 7 years

2 ALL 5 1
Auditors Accredited ESCOs Qualified ESCOs Selected ESCO
contracted invited invited IGA required
IGA not required

Reem support throughout the whole process

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Reem will act for hotels as a facilitator and technical advisor for retrofit projects

Facilitator Model
Direct hotel – ESCO contract, with Reem as advisor

Hotel
Advisory
Energy
Performance
Contract

ESCO
Initial energy audit

Investment grade audit Contracting support

Retrofit project work Financing arrangements

Operations & maintenance Program management

Reem services are provided free of charge for RAK government entities

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Energy Performance Contracts can follow either the guaranteed or the shared
savings model
Energy
Performance
Shared savings model Contract
Hotel ESCO
• Hotel does not pay
• Hotel gets approximately
Hotel cash flow
20% of savings
• Subject to financial approval

Cumulative annual cash flow (AED)

by ESCO
• Contract is typically longer

Guaranteed model
• Hotel pays:
– Capex
– Operation and Maintenance
– Measurement and Verification
• Hotel gets 100% of savings
– In bill Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
– In performance bond
Guaranteed Shared

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Successful retrofit projects over the years have validated the current approach

RAK Municipality, 2018 RAKEZ, 2019 DoF – Phase 1, 2020 RAK Academy, 2020

Guaranteed savings Guaranteed savings Guaranteed savings Guaranteed savings

11,000 m2 73,000 m2 > 40,000 m2 > 20,000 m2

4 buildings 9 buildings 12 buildings 15 buildings

29% 42% 33% 35%

46% 12% 34% 11%

AED 430 k/yr (31%) AED 2.3 M/yr (38.5%) AED 1.7 M/yr (33%) AED 2.6 M/yr (34.6%)

4.3 years 3.8 years 2.5 years 3.4 years

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 For inquiries
Dr. Pablo Izquierdo
Head of Energy Services Section
Reem, Ras Al Khaimah Municipality
pablo@mun.rak.ae, +971 7 246 6166

CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of RAK Municipality Department is strictly prohibited