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By Joel Makower
Building Efficiency Rises Again
The move to improve the efficiency of existing commercial and industrial buildings revved up in 2008, a combination of rising energy prices, improved technologies, and the recognition that even during lean times, investments in more efficient real estate can pay handsome dividends. The acceleration of efficiency measures was also borne of a realization that buildings represent a solid foundation for reducing greenhouse gas emissions. (Factoid: Government buildings in England and Wales emit more than 11 million tons of carbon dioxide a year – more than the entire country of Kenya.)
Companies seemed to be outdoing one another in commitments and achievements. The New York Times Co. said its new 52-story tower in New York City was found to use a miserly 0.38 watts per square foot, well under the typical level of 1.5 to 1.9 watts per square foot, saving 70 percent more energy than the company's original benchmark. Healthcare executives are placing greater importance on energy efficiency compared with their counterparts in other industries, according to one study. Image-sensitive retailers like JCPenney, Giant Eagle, Target, and McDonald's all demonstrated more energy-efficient stores. The latter, which spends more than $1.5 billion a year globally to power its restaurants, said it views energy efficiency as a significant opportunity to cut costs and improve the environment. Others in the hospitality industry saw similar opportunities.
Local jurisdictions joined in. San Francisco's Building Inspection Commission passed strict green building codes, to be phased in over a number of years, that would make new large commercial and residential construction comply with the U.S. Green Building Council's LEED rating system or with a rival GreenPoint Rated standard. The rules are expected to avoid 60,000 tons of carbon dioxide emissions, save 220,000 megawatt-hours of power, and prevent the use of 100 million gallons of water. Meanwhile, through a high-voltage partnership with the National Governors Association, Wal-Mart said it would perform energy audits in 20 state capitols to identify ways in which they can reduce energy consumption.
There are vast sums of money to be saved from all this efficiency, of course, but also significant environmental gains. A study by GreenerBuildings.com found that green buildings have saved the U.S. enough energy to avoid the equivalent of burning 1.3 million tons of coal for electricity since the development of the LEED standards. Indeed, green building practices could cut greenhouse gases in North America more effectively than any other action, according to research from the Commission for Environmental Cooperation. The Commission, a U.S.- Canadian-Mexican partnership, also recommended a number of incentives to support green building, help builders overcome the occasional additional costs of green building, and convince developers to choose green building practices even when the long-term savings will go to the building owner or tenants.
Moreover, efficient buildings, coupled with a smarter electricity infrastructure, could also avert the need for building new power plants, and keep "peaker" plants – which are often older, less-efficient generators – turned off during periods of high electricity demand. When extra power is needed, rather than firing up a standby power plant, a local utility could selectively and briefly turn off the air conditioning or refrigeration units in large office buildings, warehouses, big-box stores, and other facilities in its service area. It does this for brief, staggered intervals – imperceptible to occupants – reducing overall demand sufficient to avoid adding new generation capacity. The result: Demand drops enough to avoid firing up standby power plants – and maybe even eliminate some of them altogether.
Despite the successes, energy efficiency measures often get short-circuited, especially in a down economy. Facility managers are more aware of the benefits of efficiency improvements than ever, but investment levels have not enjoyed a similar increase, according to a survey by Johnson Controls. Seventy-two percent of respondents said they pay more attention to energy efficiency, up 10 percent over the year before. But the number of those who expected to make capital investments in the area remained flat. Similarly, another study found that while more commercial real estate executives are seeking greener office space, they are less inclined to pay premiums for it.
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Fossil Fuel
