Interview with Dimitris Karamitsos

BASE acts as a transformative driver of change in sustainability and business efficiency. What is it about your approach that establishes a sustainable framework?    

We design innovative business models and financial strategies which accelerate the deployment and investments of energy efficiency, renewable energy and climate impact solutions (such as circular economy). There are typically two pillars of activities that can change market dynamics. The first is what we refer to as the ‘sticks. Simply put, regulations which enforce companies in specific markets to embed practices into their business operations. And then you have the ‘carrots’ – and that's the part where BASE focuses on for the past 23 years: the economic incentives.   

How does that apply to climate solutions?   

Depending on the project, we might work on activities which focus on circular economy, such as the project of the Circular Building Coalition (CBC). Or we might work directly with financial institutions on designing taxonomies. For instance, we currently have a project in Latin America, where we’re advising one large national bank and a multilateral on having a taxonomy which supports them to invest in circular economy in Colombia. In general, BASE works both upstream and downstream, supporting financiers and solution providers (i.e. the technology companies who bring specific solutions to the markets) to deploy solutions sustainably.   

How do you make sure your solutions are both practical, scalable and impactful across all the different sectors and regions where you are active?​  

All our solutions are designed with an integrated, multi-disciplinary approach. In our team for instance, we have mechanical engineers -like me-, commercial engineers, economists, financiers, lawyers and entrepreneurs. Our director used to own a construction company, so we understand the ecosystem of buildings as well. And we have colleagues specialized in agriculture who work on projects like the one we are currently developing in certain countries to enable access to cold chain solutions. In this case, we are supporting small holder farmers who usually experience losses in income due to large amounts of crops spoilage because of a lack of cooling options. We always look to deploy impactful, sustainable and replicable solutions, which requires a multidisciplinary approach.   

What provides the basis for your holistic approach?   

We act on three foundational pillars. The desired impact that we focus on has to be economical, environmental and social. The way we typically work on a project is by identifying a challenge in a particular industry, country or region, and then we start thinking about possible solutions. The next step is to raise funds with philanthropic and development agencies; and then build a program with local players.   

How do you measure success?   

We measure success by the investments in climate solutions we enable, the GHG impact and the social impact on the ground. Furthermore, we consider ourselves successful when we are no longer needed. Meaning when we have successfully created a local market that allows the local economy to thrive, grow and make an impact. Ideally, we then leverage those results to raise additional funds for other activities and regions.  

How did you start your work with servitization, and how did it support you in reaching your goals?      

Servitization is now very much a part of our core strategy. We started our involvement with the model back in 2017 by developing Cooling-as-a-Service (CaaS)  together with my colleagues Carla Della Maggiora, and Thomas Motmans. We were looking for ways to address the growing demand for cooling systems in several countries across Asia, Africa, and Latin America. Estimates suggest that the demand for cooling will triple by 2050, as a result of rising global temperatures, access to technology, GDP growth and urbanization. Considering how a lot of customers typically engage with systems that are cheaper to purchase but consume a lot more energy in the long run, we sought for solutions to address this issue and scale energy efficiency while lowering the load requirements on the grid. Peak demand on the electrical grid is curved by lower demand from more efficient equipment, while the latter increases the feasibility of renewables in comparison to fossil-fuel sources of energy.   

What are CaaS’s most immediate benefits?   

Cooling-as-a-Service is a business model whereby the customer engages with energy efficient and clean cooling through a pay-per-use model instead of investing the CAPEX in the asset. The company delivering the cooling is responsible for the design, implementation, operation, repairs and maintenance of the cooling system. As a result, CaaS removes most of the barriers customers typically face when purchasing a cooling system. These include, the often-higher investment cost of energy efficient systems, the higher perceived risks of innovative technologies, the complexities such systems may bring forward, etc.   

What does this mean for building owners?   

Imagine I own a large building, and I want to buy a new cooling system. Which system do I purchase? What if the more expensive energy efficient system doesn’t perform as it should? What if it breaks down? If it’s a brand-new technology: where will I find the spare parts? Who will operate the system, and will I need to train people? What will be the cost of that? In addition to the latter, customers need to invest into their core business. Imagine I am hotel owner, and I need to purchase a new cooling system. Once purchased, will I still have enough capital available to maintain or refurnish my rooms (if needed) and make my hotel more appealing? Very often, all these questions will make a customer decide to opt out and settle for a cheaper cooling system instead.   

People are drawn to more budget-friendly solutions, particularly during periods of financial uncertainty. How do you help justify spending that prioritizes longevity and effectiveness?  

In this case the problem becomes that the cheaper alternative also typically consumes about 3/4 more energy. Over a period of 15 years, the customer ends up paying a fortune on energy bills. Switching to a Cooling-as-a-Service approach means that the customer has a contract with an overview of exactly how much he/she will be paying per ton of cooled air consumed; therefore, enabling them to forecast their OPEX effectively through time. Whomever is supplying them the hardware is now responsible for everything from operation, utility costs, maintenance, repairs to performance risks. There is really nothing stopping the customer from benefiting from the value of energy efficient cooling systems from day one of operation. And last but not least, since the provider is also responsible for utility costs, they have a business incentive to drive systemic efficiency throughout the contract duration with the customer.  

How else is CaaS a game-changer?   

Well, first of all: businesses and communities, especially in developing regions, are able to access modern, energy-efficient cooling systems without the burden of high initial costs. Secondly, by promoting the use of energy-efficient cooling systems, our model has contributed to a reduction in greenhouse gas emissions associated with traditional cooling technologies. Today, we've been tracking more than 150 million worth of investments in projects happening around the world through the program we initiated.   

Where were the results most palpable?   

Today, we see the model gaining momentum across several sectors. From large real estate complexes, industrial sites, hospitals, and commercial centres CaaS has been bringing value. We recommend the reader to view some of the case studies we published on the SET alliance webpage. Furthermore, one sector which sees a growing demand has been in agriculture; where the model is applied on solar powered cold rooms to provide refrigeration on a pay-per-use basis to small holder farmers looking to refrigerate their crops. For example, in Nigeria, ColdHubs—is reducing post-harvest losses of small holder farmers from about 70% to below 30%, enhancing food security and increasing revenue.​ For more information, we recommend viewing the Your Virtual Cold Chain Assistant (Your VCCA) program which gives more insights into these applications.