Trane Singapore sets the example with its energy-efficient cooling systems
Joyce Hooi, Business Times 30 Nov 09;
TRANE Singapore is discovering how greed can save the environment.
The air-conditioning solutions company is one of the thousands of firms learning how to delicately pair the lofty concept of energy-efficiency with the grubby one of fatter bottom lines.
'Decision-making is not driven by the engineers any more, it's driven by the money guys,' says Pay Ngiap Poh, vice-president of Trane's Asia energy services division.
The division has seen leaps in revenue now that its pitches highlight the enormous cost savings of more energy-efficient cooling systems, with these 'money guys' in mind.
'If I were a chief financial officer, I'd get excited over the numbers too. You're looking at an ROI of 45 per cent. CEOs are listening a lot to us now, too,' says Mr Pay.
The upshot of all of this is 40 per cent growth in revenue per year on average since Trane's energy services division started in end-2007.
The company's shift in strategy reflectsthe changing landscape of the environmental industry.
Cost savings have been mentioned in the same breath as saving the planet by virtually every speaker throughout the recent Singapore Energy Week - a sign that the environmental industry realises that placard-waving and hemp cargo pants alone will not get big business on board.
Where Trane is concerned, the numbers it is bandying about are arresting ones.
One of its customers, Singapore Post, spent $1.9 million in 2007 to retrofit its Paya Lebar headquarters with Trane's cooling system, and now saves $1.2 million a year through this system that is expected to last 15-20 years.
Another of its projects, at The Galen in Singapore Science Park, is projected to save the client $1.06 million a year.
With this particular project, Trane outdid itself, producing an efficiency of 0.57 kilowatt per tonne - the amount of energy required to produce one tonne of cooling. Previously, 0.6 kilowatt per tonne was the value to aspire to.
Mr Pay estimates that if every commercial building in Singapore were to achieve an efficiency of 0.6 kilowatt per tonne, it would be the equivalent of taking 80 per cent of cars off the roads, in terms of carbon emission volumes.
In fact, so keen is Trane to drive the point home that it is becoming the proverbial Navratilovian pig by committing to a banker's guarantee for its clients if it fails to deliver a promised cost savings amount.
'Like the pig, our guarantee is kind of life-threatening. If we tell a client that we will save them $1.2 million per year, we will put nearly $300,000 into their bank account and we have to top it up every quarter if we don't deliver,' says Lee Eng Lock, general manager of Trane's energy and contracting division.
'So if I save them only $500,000, I'm liable for the balance of the contract. If the contract is for three years, I am on the hook every year for $700,000,' says Mr Lee.
This approach appears to have struck the right chord at a time when going green and saving money have conveniently converged.
'15 years ago, I walked around on Orchard Road and looked at the buildings. I thought, 'These buildings are all non-Trane users'. So I decided to convert at least half of the buildings facing Orchard Road to Trane,' says Mr Pay.
Today, Trane - one of the three big boys alongside Carrier and Johnson Controls - can lay claim to half the buildings on Orchard Road.
'Nothing can be better than saving the environment and making some profits,' says Mr Pay. Apart from saving the environment and making even more profits, of course.
