Guest Post: The Future of Energy Management in Commercial Buildings
Industry experts make predictions for 2013.
January 17, 2013
2012 was a momentous year for commercial energy efficiency: despite a slow-growth economy, the number of buildings registering for U.S. Green Building Council’s LEED for Existing Buildings rating system skyrocketed; energy disclosure laws became mandatory for thousands of properties in major U.S. cities; electricity and gas utilities committed to give customers access to their energy data in a consistent and computer-friendly format; occupant behavior was finally understood as a critical variable in commercial energy consumption, supported by both theoretical and empirical evidence; and governments began energy-information software initiatives across their building portfolios.
In looking at three important areas of energy management today — energy policy and disclosure, utilities and the Green Button initiative, and civic government — I invited four industry leaders to shine some light on the trends that really matter: Val Jensen (ComEd), Cameron Brooks (Tendril), Cliff Majersik (Institute for Market Transformation), and Sam Brooks (Washington, D.C.).
Despite significant progress in 2012, it would be difficult to say that the commercial building sector experienced anything resembling disruption with a capital D. Buildings, like freeways and sewer pipes, are infrastructure and, as such, do not change that frequently. Indeed, historians may note that the last truly disruptive innovation to occur in American buildings was Otis’ invention of the elevator, which occurred over a century ago.
Nevertheless, the developments of 2012 are indicative of longer trends affecting how we will occupy and operate commercial buildings in 2013. To get an insider’s view of these movements, I began by speaking with Cliff Majersik, executive director of the Institute for Market Transformation, a Washington, D.C.-based nonprofit.
Policy and Disclosure
2012 saw a number of industry “firsts.” Perhaps none is more significant than the adoption of energy disclosure laws, which require residential and commercial buildings to reveal — sometimes publicly — the energy performance of the buildings. To date, six cities have passed such laws, which require the use of EPA’s Energy Star Portfolio Manager for buildings.
“Energy disclosure is a gathering wave, and we expect more cities to follow. During 2012 we saw the leading edge cities implementing, and in 2013 we’ll see the next round,” said Majersik.
The biggest city yet to implement energy disclosure was New York City, where commercial buildings 50,000 square feet and greater were required to report Energy Star scores. The numbers were made public on the city’s website in October.
With building owners starting to report their energy data, the question is, what impact will that have? “It’s a little early to say what the long-term impacts will be, but in New York City we are already seeing C-suite real estate executives asking for the first time about the energy performance of their buildings and what they can do to perform better than their peers and competitors in the market. Employees throughout the company are empowered and encouraged to make large and small energy-saving decisions,” he said.
The impact goes beyond executives and ripples through the broader real estate market. Everyone from real-estate investors to tenants looking to rent space will use the energy rankings to evaluate properties. Within large portfolios of buildings, and in major markets, having a low Energy Star-rated building will be a black eye, and will likely drive investment to improve properties that are underperforming as compared to peers.
“The market is about to go from having very little energy data to having lots of energy performance data in a short amount of time. This will empower appraisers to evaluate buildings and more carefully value energy efficiency in buildings when comparing to other buildings,” concluded Majersik.
Utilities and the Green Button
Another major trend of 2012 has been the adoption by 35 electric and gas utilities of the “Green Button,” a voluntary, standardized data format for energy data. Green Button, a data standard developed by industry along with the National Institute of Standards and Technology (NIST), and ratified by the North American Energy Standards Board (NAESB), is meant to provide customer data in a computer-readable format so that software applications can uniformly tackle energy problems and identify opportunities for savings. The White House emerged as the cheerleader of Green Button in 2012, with its Chief Technology Officer, Todd Park, securing public commitments from utilities to voluntarily adopt the standard.
By unifying on a common format across all utilities, the White House hopes to spur the private sector to develop new applications, tools, and services that utilize the data to help customers across America reduce energy use. Several software applications, including a solar payback calculator and Energy Star data uploader, were submitted to the Department of Energy’s “Apps for Energy” contest to encourage developers to find creative uses for the data.
Lowering the barriers of access to data is potentially transformative, and already dozens of private companies have adopted Green Button standards with the hopes of offering tools and services to building owners and managers.
“So far, Green Button has really been focused on buildings with an individual meter, mostly focused on single-family residential buildings. But we’re hopeful that Green Button will extend to multi-meter commercial and residential buildings. There is a real hunger from owners and tenants to get access to that data,” said Majersik, referring to the requirement from Energy Star that a building’s total energy usage, not just an individual tenant’s, be used to generate a benchmark score.
While Green Button is the first step in improving data access to utility customers, some utilities are taking the next step to automatically transfer data to third parties at the customer’s direction, a system known as Green Button Connect. For many, this is where things get interesting.
“Green Button Connect is really the key. Making data available and making it truly liquid are not the same thing. Downloadable data from PG&E’s website isn’t really usable in an ongoing way,” said Cameron Brooks, the former vice president of state policy for Tendril, and now an independent consultant. “The question is, how can energy data become a fundamental input into other applications? There are other applications that are going to include this data as a fundamental building block that are difficult to imagine. When the data is in a truly modern, liquid form, it will be used in many other services, the combinations of which will make novel applications and change behavior patterns. Ultimately, this is what will be useful and actionable.”
Although the White House now lists 35 utilities that have committed to implement Green Button, there are over 3,000 electric utilities across the U.S. Green Button supporters point out that the 35 adopters are among the largest and most influential utilities, including PG&E, Southern California Edison, Commonwealth Edison, and Pepco Holdings, Inc. Nevertheless, there is still some question as to whether Green Button, and particularly Green Button Connect, will become truly universal.
The first obvious objection is cost. Thus far, no state regulators outside of California have outright required Green Button, nor have they allowed the utilities to recover costs incurred by information technology changes; the adoption has been purely voluntary. “When discussing Green Button among our peer utilities, we generally hear one of three reactions: One, let’s go ahead and do it. Two, we’re glad to do it, but this is going to have significant costs. And three, there is no way we are going to do it, the data is valuable and we’re going to hold onto it,” said Val Jensen, senior vice president at Commonwealth Edison in Chicago. “ComEd is in the second camp. We realize that customers want access to this data, but it costs us something to implement and support. I suspect that the majority of utilities are in the same place.”
Jensen believes that Green Button Connect is “the logical next step” for ComEd, but he thinks customer uptake will vary significantly by segment. Large energy users “have already installed advanced metering equipment and don’t need our data. Building operators can get that data from energy management systems just as we do, and most large customers prefer to use their own systems rather than ours, and for those that don’t we’ve provided easy access to metering data for years,” he said. But small and medium businesses represent a key opportunity: “It’s a good way for us to lower the cost of acquiring customers for energy-efficiency programs. We see this as a large untapped potential in small- and medium-sized buildings, using something like Green Button Connect to deliver a lot more energy efficiency.”
2012 was also a major year for civic and federal governments, as energy efficiency was a focus for large portfolios of public buildings. While some cities have already made strides in improving their own building performance, there has been a faster adoption of new technologies and operations strategies, and more vocal public acknowledgement of their goals to reduce energy and save taxpayer money.
Data access played a key role for large civic portfolios, as city staff worked to identify areas for improvement within the hundreds of buildings they manage.
“We’re seeking nothing less than a dramatic reduction in energy consumption, and a vital component of this work is access to the right data in the right formats,” said Sam Brooks, Associate Director of the Washington, D.C. Department of General Services (DGS) and head of DGS’ Energy & Sustainability Division. “2013 will be a period of transformational access to high-quality resource data, for all our buildings, in a single system. That’s a big step forward for us, and is critical to realizing our goal of saving taxpayers over $100 million in the next decade.”
“We have a large and diverse portfolio, with different buildings and uses and occupancy profiles, so it’s difficult to be prescriptive across all types,” Mr. Brooks continued, noting the DGS portfolio is roughly 30 million square feet and comprised of more than 350 buildings, including office buildings, schools, recreation centers, fire stations, and more. “Yet operational efficiency improvements are apparent across the portfolio, and a focus on consumption data will be critical to drive savings.”
With increased visibility into energy use, Mr. Brooks plans to focus on reducing operational costs and cutting waste. “One of the most impactful initiatives is also remarkably straightforward: turn systems off when they’re not needed. Optimizing load shape is a remarkably powerful low-cost way to reduce energy consumption, and we’ll have a rigorous and unrelenting focus to ensure the energy output of core systems, such as HVAC and lighting, match occupant needs. It sounds simple — a core goal is literally to ‘turn stuff off’ — but there are huge savings opportunities.”
Opportunities for savings extend beyond scheduling, and there is great potential for using data to change the way operators and occupants behave. “We will also use our data to involve building occupants with the work to improve energy curves. There is an implicit stickiness when this type of effort is organic and leverages input from all stakeholders,” concluded Mr. Brooks.
Cities are also a taking a leadership role in public-private partnerships to reduce consumption. The City of Seattle, in Washington, is participating in the Seattle 2030 District, a group of hundreds of commercial buildings in downtown Seattle that have committed to reducing energy use 50 percent by 2030. So far, the City of Seattle has included a number of their buildings in the Seattle 2030 District and is an important stakeholder as the participating buildings work to meet the reduction targets.
The federal government is making similar moves toward energy disclosure, and in 2013 it is expected that the government will release the energy performance of federal buildings. With such a strong focus on reducing operation costs, we are likely to see significant investment in energy efficiency during 2013, with new collaborations between the public and private sector to help meet reduction goals.
Disclosure, data access and government action on energy in their own facilities characterized an exciting 2012 for the industry. These trends will continue in 2013 for several reasons. According to U.S. Green Building Council statistics, LEED now touches over a third of all commercial floorspace undergoing renovations or new construction, showing that mainstream construction practices are taking energy seriously. There are also significant movements toward zero energy usage which goes far beyond LEED: the 2030 Challenge, which calls for reducing energy usage by 50 percent in existing buildings by the year 2030, has been rapidly adopted by governments, and the first certification of a “Living Building” as a net zero energy user by the Living Futures Institute demonstrates that even stringent targets can, with careful planning, actually be met.
As more and more portfolio owners move from setting targets to executing on them, we expect to see energy data transparency at the center of facility operations and real estate.
Michael Murray CEO of Lucid, a cleantech software company with an intuitive Building Dashboard that monitors and displays real-time energy and water use for schools, governments, businesses, and commercial buildings. Contributors to this article include Val Jensen, senior vice president, customer operations, ComEd; Cameron Brooks, president, Tolerable Planet Enterprises, former vice president of state policy, Tendril; Cliff Majersik, executive director, Institute for Market Transformation; Sam Brooks, associate director, Washington, D.C. Department of General Services.
Source: GreenTech Media