Energy consumption is a major component of the corporate carbon emissions footprint for both owners and tenants of any building. Reducing consumption can also be one of the best ways to reduce energy and operating costs with relatively little impact on strategic business operations.
Meanwhile, increased demand with a recovering global economy, the need to renew generation and transmission infrastructure in many jurisdictions and concerns around peak oil all support a global long-term trend towards higher energy prices.
This will undoubtedly hit the real estate industry, which accounts for 30 to 40 per cent of overall energy consumption. Post-construction energy efficiency measures will become increasingly important given real estate’s long life cycle and the projection that up to 75 per cent of existing buildings will still be part of the stock 30 years from now.
Among the challenges, energy costs and consumption in existing buildings are largely invisible to the general public. Typically, people tend to notice dramatic price surges such as when oil prices hit a record peak of $145 US in July 2008, or when electricity utilities call for conservation to counter peak demand and spiking rates on the hottest summer days.
For their part, building owners and managers may view energy consumption as a necessity of doing business that is difficult to predict due to variables such as increased or decreased business activity, adding or losing tenants to a building, or adding or losing buildings to a portfolio. There is also volatility due to changing weather, hotter or cooler seasonal weather and other uncontrollable factors on cost or time of use.
Energy price increases are generally seen as something that will likely hit all competitors about the same, while energy cost savings are not always passed through to those that make conservation investments. Leases that designate energy costs as the sole responsibility of either the tenant or the landlord can undermine the motivation for cooperation and team-building between the landlord and tenants to reduce energy usage in their buildings.
Labelling and reporting
Evidence shows that increasing the visibility of actions to reduce energy costs and consumption helps to draw support and build momentum. In Canada, growing take-up of the Building Owners and Managers Association’s Building Environmental Standards (BOMA BESt) program and/or the Leadership in Energy and Environmental Design for Existing Buildings: Operations and Maintenance ( LEED EB:O&M) green building rating system promotes efficiency, as higher energy performance is key to achieving higher rating levels within both rating systems.
Energy performance is also becoming more visible with benchmarking and ranking tools such as the Canada Green Building Council’s (CaGBC) GreenUp national benchmarking program, the Real Property Association of Canada’s (REALpac) 20 by ‘15 initiative to achieve a target of 20 equivalent kilowatt-hours of total energy use per square foot of rentable space, and the friendly competition of Greening Greater Toronto’s Race to Reduce initiative.
A further scan of the global marketplace shows even more targeted, and sometimes compulsory, reporting on energy performance of buildings. Notably, some U.S. cities and states are leading the adoption of mandatory energy labelling before sale or lease of commercial buildings.
New York City’s plaNYC program to reduce emissions by 30 per cent by 2030 requires annual public posting of the energy use intensity, the Energy Star rating and water use for all public buildings in excess of 10,000 square feet and all private buildings larger than 50,000 square feet. Consequently, this annual report has created a visibility for energy that is starting to influence the market.
Washington, D.C, San Francisco, Seattle, Austin, Chicago and Philadelphia, and states such as California, Alaska, Kansas and South Dakota now have similar building energy regulations for commercial buildings. Boston, Portland, Minneapolis, Denver, Illinois and Maryland are piloting or drafting labelling policies and programs intended to make building energy consumption transparent and accessible to all.
At a national level, Natural Resources Canada plans to introduce its national framework for building energy and emissions labels in June 2013. The U.S. Department of Energy is developing national, voluntary guidelines for energy rating and labelling of homes and commercial buildings. Legislation in the U.K. requires all buildings to have Display Energy Certificates, while most European Union nations have introduced minimum energy performance requirements that must be met before a property can be leased.
Real-time display of energy metrics and goals are another emerging trend, now being used in many buildings around the world to inspire engagement among operating staff and building occupants. LCD screens in lobbies and elevators, and/or smart phone communications convey energy performance information, engendering accountability and cooperation toward a common goal of improving sustainability through reduction of energy consumption.
Continuous improvement
Increasing visibility is clearly not an end in itself. Building owners and managers must translate information and commitment into actual savings.
Likewise, investment in energy-efficient technology is only part of the solution. The lessons learned in many buildings, including those participating in the CaGBC’s Green Up program, is that efficient technologies may help to enable better building performance but is no guarantee of a high-performance building. Ultimately, how a building is used and operated has a much larger impact than its design, equipment and systems.
An ongoing process of continuous energy performance improvement is an important part of the strategy, which must also involve and engage building operators, managers and tenants. Retro-commissioning periodically resets building operation to account for changes in building use, as well as modifications and renovations to the building and equipment upgrades. Once optimized, ongoing retro-commissioning can help ensure that the performance is maintained.
Edwin Lim is president and founder of Ecolibrium Strategies Inc. He has more than 24 years experience in the green buildings industry. Edwin can be reached at edwin.lim@ecolibrium.ca.
