The market
The global air conditioning market is valued at $62 billion, with the residential sector accounting for $39 billion and over 45 million units installed annually. Temperature control is one of the main costs of building management and a major contributor to climate change. The strongest growth in this sector is coming from developing countries, led by China. Heat exchangers and condensers, used to recover some of the lost energy, are valued at $2.5 billion. Air filters, necessary to remove particles, pollen, and germs, account for $2 billion.
Property developers are increasingly investing in building management systems (BMS), a computer-driven control system that monitors light, water, and airflow within facilities. The cost of computer hardware for air quality controls in a ten-story building could easily reach $3.5 million to $5 million, while operating and maintenance costs can account for up to 25% of annual operating expenses. Buildings are responsible for 45% of all greenhouse gas emissions in the UK. In the US, buildings account for 70% of total energy consumption and 38% of CO2 emissions.
The European Commission has published a report highlighting that up to 90% of all existing buildings have inadequate energy consumption controls for heating and cooling water and air, and require a complete overhaul of existing systems. This could lead to energy savings of up to 30% in existing installations.
Innovation
Bengt Warne, the late Swedish architect, and his team studied the natural air and humidity control of termite nests in Tanzania and Zimbabwe in the 1950s. These nests utilize the laws of physics to regulate airflow, temperature, and humidity without any external energy source. Warne concluded that these colonies have the ability to cultivate fungi underground thanks to a meticulous building design that maintains a temperature of 81°F and humidity of 61%. Through detailed observation, it became clear that the height of the mounds, the length and width of the ventilation channels, as well as the position relative to the sun and the choice of building materials, all contribute to air management.
There is a long history of naturally ventilated buildings around the world, such as the hospital built in Las Gaviotas, Colombia, or the Shosoin warehouse at Todaiji Temple in Nara, Japan, both providing comfort in very hot and humid climates. It was another Swedish architect, Anders Nyquist, who motivated a team to design a mathematical model that takes into account this exposure to termite mounds but could offer predictable results to building designers. He applied the modeling technique to the construction of the Laggarberg School in Timrå by Sundsvall and demonstrated that this approach brings tangible benefits beyond energy savings, not only in hot and humid climates but also in dry and cold ones. When the air is refreshed every 30 minutes, children's attention spans and overall health improve.
The air is refreshed every hour without incurring additional heating or cooling costs, while the added benefit is that dust particles and germs are continuously channeled out of the building, promoting the health of the occupants. Then Nyquist and his team added the interplay of black and white to the exterior design, mimicking the shifts in darkness and light like a zebra's stripe. This is another simple application of the laws of physics, where warm air is thinner and rises, while cold air is denser and sinks. The Ford dealership in Umeå, Sweden, and the Daiwa House office buildings in Japan provided concrete case studies that demonstrate the effectiveness of this approach.
The first cash flow
While many seek energy savings by using existing equipment more efficiently, Nyquist and Warne have identified building designs that simply eliminate the existing market standard for energy intensity and capital expenditure with designs that incorporate the intelligence of ecosystems. These architects introduce the laws of physics as applied by zebras and termites into a remarkable new type of building design. Applying these observations from nature creates multiple benefits, ranging from capital savings and reduced operating expenses to improved indoor air quality. Children at school are exposed to simple applications of physics theory while significantly reducing a building's carbon footprint. Although the buildings are well-insulated, air circulates freely within the spaces without the need for additional heating or cooling.
The opportunity
While this approach doesn't boost business for HVAC suppliers, it offers an interesting new business model for property development companies. If there's no HVAC system in the building, there's no need for ceiling ducts. This eliminates approximately 40 to 50 centimeters of space between floors. This means that for every five floors, there's an additional floor within the same building footprint. Thus, the cost savings are complemented by increased revenue and reduced risk. When a typical 10-story building reaches break-even—when 55% of the apartments and offices are sold—this capital-saving, low-operating-expense construction typically breaks even at 46%.
The design of these energy-efficient buildings reduces investment risk. Lower risk due to a lower break-even point allows for cheaper financing, further cost reductions, and even more risk reduction. The Eastgate Shopping Center in Harare, Zimbabwe, is a striking early example of such an innovative application of building design. Even when outsiders might hesitate to commit to a large real estate project in a high-risk country like Zimbabwe, this one has proven to exceed all expectations. This office and retail complex has lived up to its promise. It has become Harare's most popular building, primarily because of its lowest operating costs and highest public appeal. Who would have expected Zimbabwe's greenest office and retail complex to rise so high?
The most interesting application is for schools. Governments are looking to save money and install insulation while recirculating air to reduce heating and cooling bills. However, as Nyquist has shown, when children are happier and healthier, and parents become aware of the statistics, some parents are willing to move to areas where the public school offers such learning opportunities. And when parents decide to relocate to remote areas, the demand for real estate will increase, giving them the opportunity to devise a new financing scheme: speculating on the rise in land value thanks to healthy, intelligent children. This is the blue economy in practice.
