Chandra Ramadurai, CEO of Efficiency Capital, discussed his journey from renewable energy to a focus on energy efficiency in an interview with CanadianSME Small Business Magazine. Strategic partnerships are pivotal in achieving their mission, connecting financial expertise with technical capabilities to deliver tailored retrofit solutions. Their holistic approach to energy retrofits contributes to decarbonizing commercial facilities, while also creating local jobs and benefiting communities, particularly in emissions-heavy regions like Alberta and Saskatchewan. Efficiency Capital is not just a contributor but a catalyst in Canada’s journey towards achieving net-zero emissions by 2030.
Chandra Ramadurai is the Co-Founder and CEO of Efficiency Capital, an Energy-as-a-Service (EaaS) company that works with building owners and operators in the multi-family, commercial and industrial segments to undertake large scale retrofits of their buildings with no capital contribution from the owners – and creates financial, environmental, and social outcomes. Efficiency Capital has investment partnerships / funding commitments with Toronto Foundation, McConnell Foundation, TAF, Canada Infrastructure Bank and various other impact investors.
Chandra brings over two decades of experience in sustainable energy, construction and banking in Canada, the US, Europe, the Middle East and India. He has led or been part of various investment deals worth billions of dollars. Previously, he was the CEO at IT Power, one of the world’s oldest clean energy companies based in the UK and has held senior-level positions at Suzlon Energy, a large wind energy company, Cemex, Standard Chartered Bank and PWC.
Chandra is an experienced Board Member and holds an MBA from Duke University, a Chartered Accountancy qualification and an engineering degree.
Can you begin by sharing a bit about your professional journey and what led you to your current role at Efficiency Capital?
About fifteen years ago, I was appointed to run one of the businesses I had invested in. The business was one of the oldest in sustainable energy / development in the UK and I gained extensive experience in renewable energy, which at the time was reliant on government procurement contracts. During the 2009 global financial crisis, we saw those contracts dry up or get renegotiated and so we moved away from businesses heavily reliant on such government subsidies, and pivoted to focus on energy efficiency, which can pay for itself.. This decision remained true to our sustainable energy background but emphasized a sub-segment where governmental support was not required. This was a turning point for me and since then my focus has been on the energy efficiency and net-zero market segments.
Now our business provides an energy efficiency solution that achieves triple bottom line outcomes – namely financial, environmental, and social outcomes. Energy efficiency as an industry offers several benefits and provides market returns financially. It reduces environmental and carbon footprints, and by upgrading older buildings we significantly increase thermal comfort, boost fresh air supply and improve health outcomes such as fewer doctor visits and decreased absenteeism at school and work. I have worked in various businesses, but none have given me the same level of pride and fulfillment as my current one, thanks to this ability to impact the people, planet and profits at the same time.
The $75 Million initiative in collaboration with CLEAResult offers no upfront costs for energy efficiency upgrades. Can you elaborate on how this model works and what inspired this approach?
Building retrofits are one of the most cost-effective ways to reduce operating costs and carbon emissions. They also increase building values and overall returns to owners, but they are complex and capital intensive to undertake. There has never really been a comprehensive solution to meet the pent-up demand for unfunded and unrealized retrofit projects. EC bridges this gap by offering Energy as-a-Service, which addresses the three major barriers to undertaking these retrofits:
- Limited capital: Building owners often prioritize capital spending for more urgent requirements and kerb-appeal upgrades, limiting the amount available for large-scale portfolio-wide energy-efficient investments.
- Time/capacity: Project management and expertise can be challenging to handle internally due to a lack of expertise and serious time constraints with other priorities to focus on.
- Risk/Reward: Without a clear understanding of project possibilities and how to maximize their value, projects either aren’t undertaken or expectations aren’t met, if started.
As a performance-based investment solution, EC partners with each building to design, fully fund and manage their low-carbon retrofits. We do this in exchange for a fee that is based on the savings or value created from the retrofits themselves.
By removing the complexity and the capital burden, EC enables building owners to reap the benefits of modern equipment and newer technologies, higher valuations and financial returns, and improved ESG performance without impairing their balance sheet or limiting their business priorities.
Efficiency Capital has a history of forming partnerships for energy upgrade projects. How crucial are these strategic partnerships in achieving the company’s objectives, especially with the new collaboration with CLEAResult?
Our nation needs as much help as possible to reach our 2030 and 2050 emission targets; efficiency retrofits offer a great opportunity for decreased emissions. Buildings are responsible for more than 50% of greenhouse gas (GHG) emissions in metro areas in Canada and globally, with older buildings contributing greatly through the use of inefficient or outdated technology—a significant issue when you realize the age of our nation’s building stock.
Having said that, building owners are used to doing things in a particular way for the past many years – so, when you are asking them to change how they approach and fund retrofits (own capital vs third party capital etc.), that involves building trust. The building owners need to be confident that this changed retrofit approach will not impact their business outcomes. While Efficiency Capital has this new innovative EaaS model, our partners have the local in-market presence and credibility with these building owners – that’s why these partnerships really make sense.
Our latest partnership with CLEAResult demonstrates the combination of disciplines and services needed to deliver turnkey retrofit solutions. Our financial and project management expertise, combined with CLEAResult’s technical capabilities and local market relationships, connects the dots between private impact capital and the technical performance of these assets.
Similar partnerships with organizations in Alberta, Quebec and Nova Scotia aim to amplify our outreach to help owners across the country adopt low-carbon solutions. EC’s model – a first of its kind in Canada – has an excellent track record of success in over 55 installations, saving over $30 million and reducing 25,000 tonnes of GHGs.
How was the decision-making process structured when selecting specific energy retrofits, and what contributions are they expected to make towards decarbonizing commercial facilities?
Efficiency Capital uses a meticulous and customized process to decide which energy retrofits to apply to any building, including commercial facilities, that starts with a comprehensive baseline audit. As each building and business has unique needs and characteristics-–from building age, to service requirements for its tenants—we avoid a one-size-fits-all approach and instead optimize a combination of high-value proptech and climate tech solutions that is tailored to each building’s requirements. Qualifying projects undergo diverse energy retrofits, including everything from improvements to building envelopes, on-site renewable energy generation, heating and cooling systems, airflow regulation, fuel switching, water related upgrades and much more. This holistic vision for building efficiency cultivates a comprehensive sustainability program that addresses challenges and potentials at the heart of a building’s functionality.
Through this holistic strategy, Efficiency Capital aids in decarbonizing commercial facilities, aligning with Canada’s sustainability goals and proving that it’s both economically viable and environmentally responsible for investors and building owners.
Drawing on the idea that energy efficiency aligns with economic stimulus, could you explain how this initiative aims to benefit building owners, stimulate job growth, and positively impact communities in Alberta and Saskatchewan?
Energy efficiency and economic stimulation are inherently interdependent. According to a study by the International Energy Agency (IEA), due to the labour-intensive nature of many energy efficiency upgrades, USD 1 million spent on energy efficiency is estimated to generate between six and 15 jobs on average, depending on the sector. And because a majority of the jobs involve construction, ongoing maintenance etc, most of the jobs are local, which significantly drives up economic activity.
Efficiency Capital fosters these low-carbon development/ retrofits through strategic investments in cash flow-positive projects. By reducing a building’s energy expenses, these projects alleviate building owners’ financial burdens while promoting job creation and supporting the development of healthier, more vibrant communities.
Though all provinces can benefit from Efficiency Capital’s investment model, targeting specific those which significantly contribute to Canada’s greenhouse gas emissions is crucial to amplify efforts for a greener future. In 2020, Alberta and Saskatchewan were responsible for a whopping 74% of the country’s total emissions from power generation. Efficiency Capital’s focus on energy-efficient projects in these regions aims to make the most significant positive impact on the environment and economy. These projects also create job opportunities related to each building and beyond, ranging from construction to green technology innovation. As buildings are retrofitted, demand for a robust workforce inevitably follows. Alberta and Saskatchewan can foster job growth through these energy upgrade initiatives while transitioning to a low-carbon economy.
The benefits of Efficiency Capital’s green building upgrades extend to the broader community in several ways. By reducing greenhouse gas emissions, the upgrades result in cleaner air, which contributes to the overall well-being of residents. Additionally, the reduced operating costs from energy efficiency measures can have a trickle-down effect, with savings being reinvested in community-enhancing projects like gardens or improved shared amenities. These upgrades cater to the increasing demand for green spaces and provide tangible health benefits through improved ventilation, lighting, and heating/cooling systems. Improved building health and energy efficiency foster a more engaged and productive community while significantly reducing absenteeism from work and school. In this manner, we are not just a contributor but a catalyst in the journey towards Canada achieving its net-zero emission targets by 2030.
