Interviews

Decarbonizing Buildings: Smart Joules’ Journey Towards Energy Efficiency and Innovation

CXOToday has engaged in an exclusive interview with Mr. Arjun P Gupta, Founder & CEO, Smart Joules Pvt. Ltd.

  • Can you elaborate on the unique features of JouleCOOL, particularly how it differs from traditional cooling systems and its impact on energy savings?

Traditional cooling systems and approaches often face inefficiencies throughout their lifecycle. HVAC design consultants often oversize cooling systems to maximize fees, missing efficiency opportunities. Additionally, facility owners tend to prioritize upfront costs over lifecycle expenses, leading to suboptimal technology choices with higher carbon footprints. These inefficient systems perpetuate operational and maintenance challenges, wasting cooling energy, with facilities squandering over 50% of consumed energy.

Smart Joules disrupts this cycle with JouleCOOL, our Cooling-as-a-Service (CaaS) model, aligning incentives with energy and climate outcomes rather than short-term cost savings. JouleCOOL, our flagship solution, offers a comprehensive approach covering design, implementation, operations, maintenance, and optimization, all centered around energy efficiency.

By assuming upfront CAPEX responsibility, Smart Joules shifts the focus to lifetime project costs, ensuring optimal technology choices and long-term efficiency. We identify and implement the most optimal, efficient, and cutting-edge technologies to bring design and impact to fruition, backed by data-backed processes for operations and maintenance. Led by India’s first AI-powered Building Optimization, Savings, and Sustainability (B.O.S.S.) system, DeJoule, JouleCOOL eliminates inefficiencies caused by manual interventions and data-lacking decision-making, enhancing energy efficiency and sustainability.

Smart Joules leads the way in cooling innovation with its groundbreaking Cooling-as-a-Service (CaaS) model, delivering remarkable average energy savings of over 35% across 40+ facilities, with some sites achieving up to a 90% improvement. In our journey thus far, we have saved 23.55 Cr kWh of energy, 1.64 lakh tons of CO2 emissions, and INR 190 crores in energy costs for our clients, establishing Smart Joules as a pioneer in sustainable and cost-effective cooling solutions.

  • What are some notable case studies or success stories of Smart Joules’ JoulePAYS model in retrofitting existing buildings and factories for improved energy efficiency?

JoulePays is our solution offering based on the “Pay-as-you-Save” concept, wherein based on the energy costs that we have been able to save for our customers, they pay us a percentage of those costs as a monthly subscription fee. JoulePays is the only one-of-its-kind energy-as-a-service solution where we act as a single nodal contact for our customers thus eliminating the complexity of working with multiple stakeholders and delivering unparalleled experience and convenience alongside unmatched energy savings and cost reductions.

Founded on the back of robust and customer-centric SLAs, JoulePays is the only energy savings service that penalizes us, the service provider, should we fail to deliver the committed energy savings to the customer. On the other hand, the customer does not spend anything towards any CAPEX commitments, thus only paying from the amount they save on energy costs, further tilting the value delivered in favor of the customer. From major equipment replacements to minor, from efficiency-first design to data-backed decision-making and processes, JoulePays takes a 360-degree view of the energy consumption in a building, thus making every joule of energy spent count.

For instance, at Apollo Hospital, Greams Road, Chennai, we implemented a range of interventions to drive energy efficiency. This included the installation of two new 400TR water-cooled screw chillers in the Main Block and the deployment of our advanced Building Optimization, Savings, and Sustainability (B.O.S.S.) system, DeJoule. Additionally, we installed four new low-approach cooling towers, an Auto Tube Cleaning System (ATCS) for each chiller, a plate-type heat exchanger for cooling the MRI machines, and Variable Frequency Drives (VFD) on Air Handling Units. These measures, combined with operational and maintenance-level improvements, resulted in an impressive average energy savings of 27%, equating to over 39.5 lakh kWh of energy saved, 4504 tonnes of carbon emissions reduced, and over INR 5.34 crore of energy costs reduced.

Similarly, at KIMS Hospital, Thiruvananthapuram, we identified and addressed energy wastage areas with targeted solutions. This included installing 380 Tr and 160 Tr water-cooled chillers at the main block and the north block, respectively. Additionally, we implemented various initiatives such as installing variable speed primary and condenser pumps, variable speed cooling towers, 3 nos of 45kW steam boilers, and a 54kW heat pump. Moreover, we deployed our DeJoule system for enhanced monitoring and control of indoor air quality and comfort parameters. These efforts led to a significant savings of 79.53 lakh kWh of energy and 6.80 lakh liters of diesel, resulting in a reduction in carbon emissions by 10109 tonnes, and substantial savings in energy costs of INR 13.6 crore since May 2020.

  • Could you explain how DeJoule, Smart Joules’ advanced intelligent automation technology, contributes to both monitoring and optimizing energy usage in facilities?

DeJoule, India’s first AI-powered Building Optimization, Savings, and Sustainability (B.O.S.S.) system, helps customers transform energy-consuming, sub-optimal buildings into efficient, smart structures. It offers three key promises:

Efficiency-first automation protocols: DeJoule is possibly the only Building Management System in India that prioritizes energy efficiency in every decision, making it a crucial asset for any building. DeJoule addresses key causes of energy wastage, such as suboptimal equipment parameters, excessive redundancy, lack of intelligent data monitoring, and manual intervention. Featuring an industry-first Reinforcement Learning (RL) algorithm, DeJoule continuously learns from user behavior and energy usage patterns.

By utilizing live operational data—comprising energy usage at equipment, system, and building levels, along with varying building occupancy, heat loads, and atmospheric conditions—DeJoule automates and optimizes equipment performance parameters, such as operational set-points and frequencies. This automated orchestration of equipment at both system and building levels removes redundancies caused by manual intervention and lack of real-time data, continually eliminating energy wastage.

Enhanced System Uptime: One of the critical challenges facing buildings is downtime across equipment and systems, which directly impacts occupant comfort and convenience while compromising the building’s efficiency.

DeJoule addresses this challenge through advanced Smart Alerts designed to provide relevant information (such as possible equipment or system failures, equipment health, sub-optimal efficiency, and performance) to the right users via WhatsApp, in addition to emails and messages. With a digital twin of the building’s complete systems and equipment fed into it, DeJoule monitors every equipment and system in real-time, ensuring continuous prognosis and keeping stakeholders informed of any possible failure or sub-optimal performance, thereby maximizing the overall uptime of the building.

During instances of possible downtime, Smart Alerts offer users the option to let DeJoule autonomously resolve the issue, enhancing uptime and system performance. Alternatively, DeJoule provides step-by-step resolutions for immediate intervention. This proactive monitoring helps prevent potential damages and losses by identifying suboptimal performance early.

Unmatched Return on Investment (ROI): The biggest question that intrigues a building owner in India is the impact of their significant investment in a Building Management System (BMS) and, unfortunately, in many cases, the return on investment (RoI) is nil. This is primarily because traditional BMS systems fail to improve uptime or the efficiency of the building, thus delivering no tangible or perceived value.

DeJoule has been designed to prioritize efficiency in every decision, ensuring the building operates at its most efficient set points every time, making every Joule count. DeJoule also maximizes system uptime, delivering maximum value for an extended duration. Additionally, several factors make DeJoule deliver unmatched RoI to the building owner.

DeJoule requires minimal deployment and commissioning downtime, delivering efficiency from day one. It demands minimal instrumentation interventions, reducing costs for cables, controllers, and software suites. Unlike most building management systems that require technical expertise and a dedicated resource, DeJoule is incredibly simple and easy to deploy and configure. Even a layperson capable of operating basic email and social media apps can plug and play DeJoule and go live quickly.

DeJoule also sets new standards in data security, reliability, and efficiency, offering round-the-clock data backup, remote support, updates, and onboard controller data storage. Harnessing advanced Edge and Cloud networks, DeJoule provides unparalleled safety and redundancy.

  • Smart Joules aims to mitigate 29 million tons of CO2 emissions by 2030. What strategies and technologies are being employed to achieve this ambitious goal?

Our vision to mitigate 29 million tonnes of CO2 emissions by 2030 is rooted in the exponentially growing demand for cooling and the inherent energy efficiencies observed across the Indian built environment. While responsible for 60% of the energy consumption in a building, cooling has transitioned from a luxury to a necessity due to rising temperatures.

Since our inception in 2014, our flagship Pay-as-you-Save solution, JoulePays, and our Cooling-as-a-Service solution, JouleCOOL, have been at the forefront of the efficiency transformation across buildings in India.

JoulePays takes full responsibility for managing energy consumption throughout a building. By serving as the single point of contact for all operations and charging customers based on the percentage of energy costs reduced, JoulePays prioritizes efficiency.

On the other hand, JouleCOOL leads the way in energy efficiency by addressing inherent bottlenecks in the cooling ecosystem, from design and equipment to operations and maintenance. By eliminating the need for upfront capital expenditures and streamlining the process with a one-stop-shop approach, JouleCOOL emerges as the most cost-effective and environmentally friendly cooling solution in India, enabling easy scalability.

DeJoule backs our flagship solutions, addressing key industry challenges like the absence of intelligent automation in BMS. DeJoule focuses on real-time elimination of energy wastage, continually reducing energy costs for buildings. DeJoule not only improves uptime but also reduces energy costs per minute of operation, delivering tangible value and ROI.

Our solutions have transformed decarbonization from a mere sustainability initiative into a profitable endeavor for buildings. This has catalyzed its adoption across various building types, including hospitality, healthcare, commercial offices, data centers, and more.

To catalyze our goal of reducing 29 million tonnes of carbon emissions by 2030 and facilitate the scalability of our solutions, we envision integrating 1 million tonnes of cooling capacity into our Cooling-as-a-Service solution shortly, which will be driven by a robust ecosystem of partnerships and industry associations. Furthermore, we plan to empower our partner OEMs with intelligent systems, thereby transforming their products into Smart Products. This enhancement will enable intuitive operation, facilitating the identification and reduction of energy consumption across buildings.

  • Can you provide insights into Smart Joules’ growth trajectory, particularly its expansion into new sectors such as hospitality and plans for future sectoral projects?

Since our inception in 2014, the healthcare sector has been one of our mainstay industries. Our portfolio includes renowned names such as Apollo Hospitals, Aster Hospitals, KIMS Hospitals, GKNM Coimbatore, Gleneagles Bengaluru, and Fortis Noida.

Over the past year, we have expanded into new sectors, including hospitality. Le Meridien Gurgaon represents our first foray into the hotel industry, while the ITC Food Factory Panchla marks our entry into food processing.

Moving forward, we aim to deepen our presence in the burgeoning hospitality sector, as well as expand into data centers, pharmaceutical manufacturing facilities, and commercial offices and malls.

  • What distinguishes Smart Joules in terms of its approach to energy efficiency compared to other companies in the industry?

One of the critical gaps we identified early in our journey in the energy efficiency space is the lack of comprehensive accountability for delivering results, paired with limited capabilities and a dearth of performance-based incentives. While many brands and organizations across various sectors claim to be energy-efficient service providers, closer examination reveals that they primarily focus on manufacturing products, providing only partial services, or offering advice. None of these income streams are strongly linked to the energy efficiency they deliver to their customers, thus lacking the necessary focus on driving efficiency across the built ecosystem.

Smart Joules is the sole company in India with full-fledged, in-house capabilities covering cooling design, contracting, financing, technology, and services. Our flagship solutions, JoulePays and JouleCool, are tailored to offer customers an all-encompassing, end-to-end solution centered on performance based purely on energy efficiency. DeJoule is the pioneering indigenous Building Optimization, Savings, and Sustainability (B.O.S.S.) system, meticulously designed and built from scratch with the singular purpose of eradicating energy wastage from buildings in real time.

The foundation of all our services is our unparalleled Service Level Agreements (SLAs), the only one of its kind in India. These agreements define our revenue and payout from the customer based solely on the actual efficiency delivered. They penalize us if we fail to meet our efficiency commitments, ensuring that our customers pay only for the efficiency we deliver. This focus on actual energy efficiency drives everything we do, reinforcing our commitment to leading profitable decarbonization efforts.

 

  • How does Smart Joules leverage IoT and AI-based technologies in its solutions, and what advantages do these technologies offer in terms of energy optimization?

IoT and AI form the underpinning of our advanced Building Optimization, Savings, and Sustainability (B.O.S.S.) system, DeJoule, which places energy efficiency at its core. DeJoule is powered by our in-house developed Reinforcement Learning (RL) algorithms, making it a self-learning and self-evolving building management system, capable of monitoring and optimizing energy consumption at the equipment, system, and overall building levels.

A departure from traditional building management systems that typically adopt a one-size-fits-all approach toward ensuring occupant comfort, DeJoule explores and assesses various alternatives to achieve the desired level of occupant comfort, opting for the most energy-efficient method. This bespoke approach ensures that we make every Joule count, emphasizing energy efficiency while ensuring optimal indoor comfort.

By leveraging real-time operational data that meticulously tracks energy consumption across equipment, DeJoule effectively eliminates energy waste through a multipronged approach encompassing optimizing operating set points, reducing operating frequencies, orchestrating real-time coordination between equipment based on actual energy consumption, and eliminating inefficiencies resulting from data-lacking operations and maintenance due to manual intervention.

DeJoule’s AI and IoT capabilities empower it to monitor and optimize the building’s health, enhancing equipment uptime. Through its Smart Alerts feature, DeJoule provides real-time monitoring and prognosis, delivering critical information on health and potential downtime to relevant users via WhatsApp, emails, and messages. This proactive approach ensures prompt action. Unlike traditional alerts that offer limited unactionable insights, DeJoule’s Smart Alerts prompt immediate action, enabling DeJoule to autonomously resolve issues or provide users with step-by-step instructions for corrective action.

The aforementioned factors ensure that DeJoule maximizes the real-time energy efficiency in a building, further enhanced by improved uptime thus delivering the maximum Return on Investment, coupled with unmatched Return on Environment.

  • Could you share more details about Smart Joules’ fundraising journey, including the sources of investment and grants received, and how these funds are being utilized for further expansion and innovation?

Smart Joules’ core business model is robust, creating recurring value for our clients and generating recurring revenues and profits for us through solid long-term contracts. Additionally, we are at the forefront of technology innovation in the rapidly expanding automation market. Since our inception, we have consistently shown both growth and profitability, with every team member’s compensation coming from the significant carbon reduction achieved for the planet.

Our solid fundamentals and performance have enabled us to secure funding from various sources tailored to match the scale and nature of our business needs. In our early stages, we utilized non-dilutive grant capital from organizations such as Echoing Green, the David & Lucile Packard Foundation, and TATA Trusts. These supporters recognized the long-term global climate change potential of our business plans. This catalytic funding enabled us to build our initial team and embark on the path of technology and business model innovation, aiming to transform the cooling and automation industries in India, forever.

As we began securing hospitals for long-term energy efficiency services contracts and demonstrating the initial success of these projects, we turned to debt capital for funding. We approached TATA Cleantech Capital, a leading NBFC that shared our vision and culture, and they generously provided early funding for our projects. TATA Cleantech Capital remained our sole source of debt for the company for 5-6 years. Building on the success of this relationship, we later raised debt from additional institutions such as YES Bank and SIDBI.

Our efforts to raise debt were further supported by the World Bank’s Partial Risk Sharing Facility, which encourages Indian financial institutions to lend to energy efficiency projects by providing a partial risk guarantee in case of project failure. Most recently, owing to our impeccable record of project performance and debt repayment, along with our promising project pipeline, we successfully raised larger long-term debt from the Danish Government’s Development Finance Institute – IFU.

In the initial years, Smart Joules experienced slow but profitable growth, relying solely on debt and grant capital. During this time, we built strong multi-disciplinary capabilities internally and demonstrated outstanding project performance. When we were ready to accelerate our growth, we began raising equity capital.

In 2021, we completed our Series A round of equity capital, attracting a diverse group of institutional and angel investors. Notable names among our investors include ADB Ventures, Sangam Ventures, Raintree Capital, Max Industries & Ventures, Mr. Nadir Godrej, Mr. Burman from the Dabur family, and several others. Since then, we have invested these funds aggressively in developing our technology to become the premier building automation platform, introducing a new cooling-as-a-service business model to penetrate greenfield projects, and expanding into multiple sectors beyond our initial focus on healthcare.