Focus on Energy Efficiency Shifting from Prescription to Performance
Urban Land, February 13, 2017
One simple question changed the dynamic of the U.S. General Service Administration (GSA) energy efficiency contracts, says Kevin Kampschroer, GSA chief sustainability officer. The question: Is this the best you can do?
“It was the best question we asked,” Kampschroer said during the recent FutureBuild conference, organized by ULI Los Angeles in conjunction with VerdeExchange. Asking whether architects and engineers could do better on energy efficiency opened up GSA’s dialogue with them to different ideas. In many cases, architects and engineers were designing to hit targets and not bringing up more ambitious approaches, Kampschroer said.
“We forced people to sit down and rethink everything together,” he said.
Energy and energy efficiency were recurring topics at the conference, as developers and planners wrestle with ways to improve the efficiency of buildings and communities. New technology and government mandates have helped push the issues to the forefront, but speakers emphasized repeatedly the need for a different way of thinking about short- and long-term goals.
At all levels of the industry, landlords, planners, and builders are looking for better ways to have an impact. Last year, ULI’s Center for Sustainability launched the ULI Tenant Optimization Program to help landlords, tenants, and designers integrate energy efficiency into buildings and create financial benefits through energy conservation.
“For us, we’re really trying to expand beyond just expressions of energy efficiency to a more holistic view of sustainability,” Russell Fortmeyer, a sustainability leader for Arup, speaking on the panel.
Several panelists argued that the equations for determining sustainability need to be reconsidered. Some buildings may reach standards because they are attached to a grid that uses a large percentage of renewable energy, whereas a building across the street may use a utility that relies on coal, Fortmeyer noted.
“It is much, much harder to improve buildings just on the metric of energy,” said Fortmeyer. He advocates use of carbon, not power consumption, as a more holistic metric for measuring performance. “If you start to think of the city and buildings in terms of carbon, you can easily start to see how a building site extends well beyond the boundaries we’re traditionally thinking of,” Fortmeyer said. “If you really interested in a more impactful project, you have to expand your site.”
The economic realities of energy efficiency were at the heart of many of the conversations, especially for homebuilders, who need to integrate energy conservation into their build-and-sell calculations. “We are continually trying to find the value equation for people buying our homes,” said Adrian Foley, chief operating officer for homebuilder Brookfield Residential California.
Energy consumption is not very interesting to most homebuyers, Foley said. But the cost of smart technology providing constant feedback on energy use has dropped from $30,000 to $1,500 per home in recent years, he said.
Nevertheless, it is still up to the owner to make smart choices. “We look for technology to be a sexy solution to a boring issue,” Foley said. Real energy conservation will come from a “transformational experience” for homeowners, when the feedback on energy use leads to a habit change, he said.
Homebuilder Lennar has made smart technology and energy conservation a part of the sales pitch, said Robyn Beavers, vice president of tech and investments at the firm. For example, solar panels were installed in new homes in some projects, allowing buyers to save money on costs from day one.
“It’s not just an expense; it’s another feature of the home,” Beavers said. But with all types of gadgetry in new homes, the challenge with energy consumption is to “try to brand an invisible thing,” she said.
The next step for new communities is coming up with a model for intelligent, distributed energy networks that take the burden off individual buildings, several panelists agreed. “It’s a new way of planning infrastructure,” Beavers said. But new entities have to step up to run the network for the long term because the homebuilder and the local energy company may not be interested in maintaining and operating the grid. “It no longer has to be a utility; that’s what’s coming,” Beavers said.
Though technology and government standards have pushed progress in new buildings, the real challenge is older buildings—both residential and commercial, experts agree. But a shift is underway toward finding new ways to address the stock of existing structures, panelists said.
In December, Los Angeles passed an ordinance requiring that energy and water use be tracked for private buildings larger than 20,000 square feet (1,900 sq m). “If anything, it brings to the owner’s attention that something is wrong with the building,” said Osama Younan, executive officer of the Los Angeles Department of Building and Safety.
“I think the private sector is the one who’s going to lead these new ideas, new innovations, new technologies,” Younan said. “But the private sector and incentives have limits. If you really want to change the market, you need to get into the world of regulations.”
A similar benchmarking initiative in Seattle was “incredibly helpful” in identifying problems and spurring a competitive streak in building owners to do better, said Martin Howell, energy group leader for Arup. “One of the things learned from Seattle is to start tying upgrades to capital improvement projects,” Howell said.
Several speakers supported a move from prescriptive to performance-based programs. “We switched very, very strongly away from prescriptive specifications to performance specifications,” Kampschroer said of the GSA.
In one case, the GSA withheld one-third of payment to a builder until the building met performance goals for one year. But many different approaches to getting results exist, including a different way of addressing human psychology, Kampschroer said.
“It doesn’t always have to be convincing somebody to do a positive act to save energy,” he said. Making energy conservation the default setting—requiring users to override that setting in order to change performance—can result in immediate savings.
“Seventy to 80 percent of the time they don’t choose to override,” he said. He emphasized the notion that energy conservation does not need to be expensive. “You don’t have to put in any extra money to make it green,” Kampschroer said. “You just have to do it right.”
Finding new ways to finance and defray costs was another recurring theme of discussion, with panelists debating different ways to fund energy improvements.
“You have to have a million arrows in your quiver,” said Sara Neff, vice president of sustainability at developer Kilroy, during a panel on disruptive financing. From lease bonds to an offering from Sustainability Partners to infrastructure improvements funded through energy savings, the focus was moving beyond traditional approaches.
“There are a million ways to get out of upfront capital,” Neff said. “Upfront capital is so ’90s.”