KPMG Study: AI-Led Strategic Energy Management Outperforms Retrofits, Cutting Building Energy Waste 20-30%
Retrofits alone won't reach net-zero on time. Use SEM with AI for daily efficiency and 20-30% cuts; stabilize operations first, then upgrade equipment and add renewables.
AI + Strategic Energy Management: Faster, Deeper Energy Cuts for Buildings
Retrofits alone won't get portfolios to net-zero by 2050. They're slow, expensive, and buildings often slip back into waste even after upgrades.
A recent KPMG study points to a better path: pair Strategic Energy Management (SEM) with AI. Treat efficiency as a daily operating discipline, not a one-off project.
Key takeaways for real estate and construction leaders
- SEM delivers 5-7% annual savings on its own. Add AI, and results typically jump to 20-30%.
- Hardware helps, but management drives the wins. Waste comes from how systems are run day to day.
- Assign accountability to facility managers/energy officers and let AI handle real-time control adjustments.
- Renewables come last-only after the building's consumption is under control.
What SEM looks like in practice
SEM translates long-term emissions goals into daily tasks, with clear ownership. AI and machine learning handle continuous tuning-especially for HVAC, lighting, and controls-while teams set targets and review performance.
As Exergio CEO Donatas Karčiauskas puts it: "AI is already helping buildings cut waste by 20 to 30 percent in our projects, no matter the climate or the age of the property. But those savings only last if there's smart energy management behind them."
The three tiers of SEM (and where AI fits)
- Tier 1: Optimize what you have. Tune HVAC, lighting, and BMS settings for daily efficiency. This is the fastest lever, and an ideal task for AI to automate.
- Tier 2: Replace weak links. Swap out worn or inefficient equipment once operations are stable and data-backed.
- Tier 3: Add renewables/PPAs. Layer clean supply only after demand is right-sized and predictable.
The SEM operating cycle
- Assessment: Map loads, schedules, occupancy, and controls. Establish a baseline.
- Planning: Set targets, comfort ranges, and standard operating procedures.
- Implementation: Deploy AI for real-time control; enforce routines for manual tasks.
- Capability: Train facility teams and define clear roles for oversight.
- Monitoring: Track savings, exceptions, and drift; adjust weekly and seasonally.
Example: AI can adjust HVAC setpoints and schedules dynamically based on occupancy, weather, and usage, while managers define energy goals and review results.
How to activate this in your portfolio
- Start with data: Ensure your BMS and meters are connected and reliable. Fix sensor gaps first.
- Pilot 1-3 buildings: Prioritize properties with high energy intensity and stable occupancy.
- Define KPIs: Energy use intensity (EUI), comfort bands, peak demand, and SLA for variance response.
- Clarify roles: Facility managers own outcomes; AI handles auto-tuning; experts audit exceptions.
- Sequence upgrades: Run Tier 1 for quick wins, then target the worst-performing assets in Tier 2.
- Defer renewables: Add them after consumption is optimized to get full value.
Why this works
Most waste occurs between retrofits-in schedules, setpoints, and controls. SEM creates the rules; AI keeps systems running to those rules minute by minute.
According to Karčiauskas, "Efficiency isn't a one-off upgrade, it's how you run the building day after day."
Resources
- ENERGY STAR: Strategic Energy Management
- Upskill teams on practical AI for operations (Complete AI Training)
Bottom line: Get the operations right with SEM, let AI maintain the gains, then invest in equipment and renewables. That sequence delivers faster, durable reductions-without waiting years for the next capital project.
