Is Our Technology Sustainability Efficient?

In an interview with BW Businessworld, Katie McGinty Vice President and Chief Sustainability and External Relations Officer, Johnson Controls, spoke about recognize where the technology is or is not ready to scale up for sustainability, climate science, STEM education, SDG targets, solar energy consumption in India and more.

 1. What is the role of policy in supporting tech innovation, according to you?

The important thing right now is to recognize where the technology is or is not ready to scale up for sustainability, and especially to bring emissions down. Building technology for decarbonization is completely ready to scale - there is no reason not to decarbonize and transform buildings from a 40 per cent global emissions challenge into the biggest, quickest win for net zero.

Especially given the urgency we face now of needing to cut emissions in half globally by 2030, in order to have a chance of keeping global warming to 1.5 C, it is important that where the technology is ready, as it is for buildings, policymakers are providing both the incentives and the regulatory mandates to put the technology to work. So, we talk to policymakers a lot in India and around the world, to make the state of technology for buildings transparent, so that they can make good decisions about how to get that technology working for decarbonization.

2.How does JCI see the opportunity presented by digital data, and what is their approach to leveraging it for sustainability?

There is a revolution waiting to happen with buildings, and it is all about data. Buildings are the sector least penetrated by information technologies - so different from your car that essentially is now a computer on wheels. During the height of the COVID lockdowns, we saw this in stark relief: while occupancy was down in many commercial buildings by 80 per cent, energy consumption in those buildings was down only 20 per cent. That's because buildings are totally analog. They just have a giant on/off switch, and bad things happen when they get switched off. With digital, we have a massive new opportunity to optimize building systems. It is a journey of several steps to take buildings to net zero - starting with basic operational efficiency. 

First and foremost, we have to bring down energy demand. Less energy, less emissions. So many buildings operate on decades-old equipment, they are wasting tons of energy and electricity. The fact is, energy efficiency has made such leaps and bounds in the past decade, simply retrofitting with efficient modern systems slashes energy and emissions by at least 30-40 per cent.

Electrification is the next step to net zero. Wherever gas or oil is still being used in buildings, we can replace that with electrical devices. That cuts the emissions from direct fossil fuel combustion. The electrical devices that are used instead are called heat pumps, but they can heat or cool equally well, and are super-efficient. Because they tap into cool air, water, or earth to cool a space, and since they recycle waste heat or cold, they can produce many more times the working energy than it takes to run them. 

That brings us close, but not all the way, to net zero. The third part of the smart building trifecta, systemic digitalization, is the key to pushing us over the net zero threshold. We launched Johnson Controls OpenBlue in 2020, as a comprehensive ecosystem of connected, digital solutions for buildings, that can break down siloes and connect building systems, regardless of vendor, and make them interoperable. It uses dynamic AI to fine-tune a building as a whole, multiplying energy, emissions, cost, water, and waste savings. When the HVAC can talk to lighting and security, and to on-site renewable energy resources, the building becomes an optimized system, and can act like a battery, connecting to and supporting the grid, as well. 

3. What is JCI's stance on 'Make in India' solutions, and how does it relate to sustainability?

For a country the size of India to build a sustainable future, of course it's important to continue to invest in the STEM education needed to lead climate science research as well as technology innovation. Advanced building technologies, in particular digital, connected, energy-efficient technologies, will be the essential tools which India and all countries need to decarbonize buildings and achieve national and global climate goals. This goes hand-in-hand with investment in the manufacturing centres which will allow India to sell that innovation domestically, and also to export it. The Green Growth initiative in India supports this technological development.

With 30 years in India, we are investing in India's climate leadership with centres of excellence for smart building software and equipment innovation, and also for manufacturing. We have more than 8000 employees in India; 3000 of them are engineers. We added 2000 employees in 2022 alone, and will continue to grow the employee base and localization of the supply chain in 2023.

It's also important that construction workers are up to date on the skills needed to build smart, digitalized buildings. We offer training in new kinds of buildings technologies, digitalized and sustainable, for construction workers. The technology and equipment in buildings hails from several generations, and requires an enormous amount of knowledge to maintain. At the same time, the new technologies, particularly connected, digital building management systems, require a different skill set to build and maintain.

4. According to you, what is the level of involvement/engagement by the government and various stakeholders in India's sustainability efforts?

First, what we have witnessed over the past many years is a growing commitment on the part of government, business, and civil society to undertaking ambitious initiatives to convert more swiftly from an inefficient industrial to a sustainable economy, and to decarbonize large sectors, in particular, the buildings sector, which contributes 40 per cent of global emissions.

India is certainly picking up the pace on climate action. India has shifted to renewables even faster than the Prime Minister's ambitious goals, demonstrating the will and ability to transition to a sustainability economy ahead of schedule.

Over 42 per cent of energy in India is renewable (Feb 2023), a 4-fold increase in the past 8 years.  India is ahead on its goal of reaching 50 per cent renewables by 2030, and even on a path to possibly achieving as much as 60-67 per cent non-fossil capacity by 2030, under current policies. 

We see another strong move in the Energy Conservation Amendment that came into force in January of this year. Right now, buildings contribute 40 per cent of global emissions. In India, they use more than 30 per cent of the electricity generated. So, we need to move a lot faster to decarbonize buildings.

The Energy Conservation Amendment is moving in the right direction. It specifies new standards for energy efficiency, use of renewable energy and other sustainability requirements for different types of buildings. It brings offices and residential buildings (all buildings over 100 kW) into the energy conservation code (in addition to industrial and large commercial buildings). There is also a new classification for buildings that may allow those under 15Kwh/sq.m to be called a nearly zero-emission building (NZEB). 

One major element is the new monitoring requirement - it doesn't sound like much, but it is a critical step. What gets measured, gets done! Once you really start monitoring energy and emissions reductions, with digital tools, you can report accurately on progress towards climate targets. We have built into our OpenBlue ecosystem of connected, digital building solutions an application called the Net Zero Advisor that allows building managers to digitally assess carbon footprints, set energy and emissions targets, manage energy and emissions digitally, and then also track and analyse them, so they can report accurately and transparently on climate target progress. Digital tracking and analytics will be important for the ECA as well as Business Responsibility and Sustainability Reporting (BRSR) in India.

We also see an impressively comprehensive sustainability approach from the India government, particularly in this year of G20 leadership with its theme "One Earth, One Family, One Future" and six priorities: sustainable development, inclusive & resilient growth, faster SDG progress, digitalization & technological transformation, multilateralism, and women-led development.

We believe that a sustainable future for people and the planet is one that provides and makes a place for all of society to benefit and to contribute. It is important that we are helping the communities in which we operate to develop the skills needed in a sustainable, digital economy. To that end, we support all of India's G20 goals. In particular, in addition to helping to tackle climate change and bolster sustainable development, we are promoting the goal of women-led development, and prioritizing women in the workforce. In 2022, nearly 30 per cent of new hires in our Kadi plant in Gujarat were women, and we continue to add to that number to increase our female staff. We offer a nursery, maternity leave, late-night taxis, a women's leadership program, and women's awards, to increase the pace of integration and gender parity. 

5. How are investors contributing to the push for companies to meet their ESG targets and commitments?

Regardless of an economic slowdown, India - like every other country in the world - can't afford NOT to act. That's why we are advocating for a wider adoption of the ESCO financing model that uses energy savings to fund building decarbonization projects. It has been successful in India and other countries in removing the capital hurdle and accelerating decarbonization.

We know that globally, we will be $4 trillion short annually on needed decarbonization investments, if only public funds are used. 

In India, upgrades to buildings, campuses, and whole communities to efficient and potentially net zero carbon can be financed through energy cost savings. So, if India increases focus on energy efficiency in buildings, capital available for investment can be multiplied, as organizations recoup funds through energy savings, which can be invested in further decarbonization efforts.

An example for consideration would be the US federal policy in 2009, aiming to create a clean energy economy. The performance contracts awarded aimed to reduce the Federal government's energy spending by $8 billion over 18 years, offsetting the costs of new equipment, maintenance, renewable energy, and other much-needed infrastructure upgrades. The challenge also included the creation of more than 30,000 jobs.

7. What are some of the challenges related to managing solar energy and consumption in India?

Solar energy is a reliable and increasingly available energy resource. However, it is intermittent - without battery backup, it is available only when the sun is shining. That presents a challenge, as India races to meet and exceed its ambitious and impressive renewable energy goals.

It is also forecast that India will add to its energy use more than any other country, from now to 2040. Over the next 20 years, to meet growth in electricity demand, India will need to add power which is equivalent to the size of the European Union. That, plus the shift from oil and gas to largely solar-generated electricity will entail massive grid expansion, and a need to balance peak supply in mid-day with peak demand in early evening. 

Over the same 20-year period, it is predicted that India will see a building boom that doubles commercial and residential real estate, with 70 per cent of new construction in cities. Unlike most of the world - where 80 per cent of 2050 buildings are already standing - in India, half of 2030 buildings have yet to be built! So, while buildings now contribute 40 per cent of emissions, India has a unique opportunity to build new neighbourhoods of smart, net zero buildings. Here is where buildings and solar become a great matched pair. Putting building technology to work can essentially transform buildings into batteries to support and back up solar energy to help stabilize the grid. 

With this one-in-a-million opportunity, the Indian government is advancing net zero buildings on several fronts. As I said before, first, with smart building & renewable energy standards in its Energy Conservation Amendment. Second, in its Business Responsibility & Sustainability Reporting act, requiring climate disclosure in financial reports. Third, in its Green Growth initiatives championing technology & innovation.

8. How does India rank in terms of JCI's investments and presence globally?

We have been operating in India for over 30 years. Our employee presence in India is our third largest globally - behind only the US and Mexico. We are excited to be building in India not only to serve the Indian market but to export globally.  And when it comes to talent and expertise, India is central to our efforts globally to lead with the best in engineering and data science/digitalization. That's why we are proud that India is home to our Global Centres of Engineering and Digital Excellence.

9. Can you describe JCI's role in developing air conditioning systems for the Qatar World Cup?

We have provided large tonnage air conditioners that supply over 500,000 tons of refrigeration for district cooling across Qatar. It cools many of the hotels for World Cup guests, as well as hospitals and schools in the district. District cooling offers multiple layers of sustainability, energy-efficiency, cost-efficiency, and resilience. By consolidating the cooling supply outside of the buildings, it reduces the energy demand in the buildings to the low-energy supply of electricity needed for lights and other small equipment. By extension, that reduces the need for an expanded and complex power grid distribution network, simplifying and boosting resilience in the grid, and it saves material resources that would otherwise be used to build out the grid.

India's position in this regard is similar to Qatar's; the country needs a strategic approach to mass cooling that addresses both decarbonization and the urgent need to mitigate the impact of soaring temperatures on human health. It is estimated that India will have more space cooling than any other country by 2050, using 28 per cent of total electricity and 44 per cent of peak output for cooling. So, we endorse the government's "India Cooling Action Plan" focusing on a district cooling strategy. In fact, we were very pleased to supply the cooling system for the very first district cooling project in India, in the Gujarat International Finance Tec-City (GIFT City).

10. What is JCI's approach to reducing GHGs and global refrigerants, and how does it align with sustainability goals?

We have a range of products deploying low-global warming potential (low-GWP) and natural refrigerants, and we continue to innovate to address refrigerants across equipment and applications. Globally, we are proud to be ahead of the curve on regulatory requirements in producing chillers that are 35 per cent more efficient that comparable chillers and that use not only low, but ultra-low refrigerants (GWP of 1). Our rooftop units are also deploying refrigerants that represent a 78 per cent cut in GWP compared with conventional refrigerants.  

Also, connecting these air conditioners increases their energy efficiency significantly. We have connected more than 11K cooling systems through OpenBlue. In the past, to achieve a step-change in energy efficiency (20-30 per cent reduction) you had to upgrade to a more efficient cooling system, which had a payback of 3-5 years. Now, simply digitalizing and connecting your chiller can yield enough energy savings that you get your payback within a year.