Vaughan Furniss

Competition in the energy efficiency and building services market for B grade buildings just ramped up another notch thanks to an acquisition by Cofely, part of the giant ENGIE group, which recently rebranded from GDF Suez.

Cofely is gaining traction in Brisbane where it is working on rolling out a district cooling system for the city in partnership with Thiess.

But it’s the company’s move to take full ownership of TSC Group Holdings, a building management and services company that has 600 staff on its books and clients such as the Sydney Opera House, Post, and City of Sydney, that will make its it much better known in industry circles nationally.

At least that’s the plan, the managing director of Cofely in Australia, Vaughan Furniss, recently told The Fifth Estate.

The acquisition, which consists of remaining shares it did not already own, bought from venture capital fund Allegro Funds, expands on Cofely’s “cornerstone investment” to give the ENGIE Group some good firepower in the energy efficiency sector.

Furniss says the potential is to leverage existing client relationships within the TSC Group in order to grow the energy efficiency and services business, especially in state capitals and “particularly in the building segment with low performing NABERS buildings”.

Most of the 600 staff at TSC are skilled or specialised, working out of 12 offices around Australia, so in a very good position to understand the opportunities for more energy efficiency work among their clients. Among them are technical experts embedded in clients’ CBD locations “so the potential is to utilise a static team without having to use trucks racing around town”.

Current staff at Cofely is eight in engineering and 10 in total. But globally, Furniss points out, the company has 152,900 people and a turnover of A$118.6 billion, so there is a good pool of talent and resources to tap for support.

The plan is to be “quite tactical”. There are plenty of customers on the TSC Group books to service before embarking on “too much prospecting” in the market, Furniss says.

District cooling in Brisbane

The Brisbane district cooling project is still in the development phase but Furniss says a couple of first clients are close to signing up.

“We’re very active with different asset owners and close to contracting,” he says.

Globally Cofely has 230 such district heating or cooling systems and it’s the way the world is moving, he told The Fifth Estate.

The cooling system works by distributing chilled water in through a private network of pipes between buildings and generally they have a central point of generation.

Furniss says it’s the first of this scale in Australia. Other district cooling systems exist – at James Cook University, at University of Western Sydney and at Latrobe University, he says.

But to begin with the project will be quite modest.

“We’re looking to start with quite a small project –5-6 megawatt of contracted energy with a good load profile [demand for consumption]”, he says.

The benefits to clients include savings that range from 5-10 per cent on operations on top of the capex savings of avoiding installing chillers and related plants. In a new building it could mean avoiding having to provide load bearing space on the roof which could mean lower structural costs.

The environmental savings can also be significant, up to 20,000 tonnes of greenhouse gasses from the project as a whole, to a potential 0.5 star improved NABERS rating on a building because of the higher efficiency dividends.

The system is designed to incorporate renewable energy if and when it becomes available on a bigger scale.

“We’re delighted to incorporate solar or other renewables,” Furniss says.

However, in Brisbane the system is likely to be conventionally driven simply because there is low gas availability in the CBD.

But it’s slow going for now. Getting buy in is “a bit tricky”, Furniss says, but once the company can build the full business case and it gets early traction, he is convinced it will move well.

So what are the customers saying?

First customers need a “commercially compelling reason” to connect and it needs to be better than what they can do in their own building, he says.

Difficulties emerge with the contracting times needed, which are long term.

“It’s a big decisions to make” with the gestation period before contracts can be signed much longer than you would like.

A difficulty, he says, is the energy prices are relatively low. Another is the “gap between policy and regulations” that prevents development of the right mechanisms.

Furniss, an engineer, is a New Zealander by origin, but was in the UK long term, building nine decentralised energy systems in that country before settling with his family in Australia in 2011.

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