Navigant Research Blog

The White House Leading the Way to a Greener Future

— August 5, 2016

HVAC RoofOver the past couple of weeks, Americans have tuned in to watch and listen to speeches at the Republican and Democratic National Conventions and hear each party’s endorsements of their presidential candidate nominees. In her speech at the DNC, First Lady Michelle Obama stated, “I wake up every morning in a house built by slaves,” a statement that has been the center of many conversations since then. The White House was, in fact, built by slaves, along with several other American structures that exist today. The purpose of this blog, however, is not to take a political stand on the first lady’s statement, but rather to examine the transformation of the White House through energy efficiency efforts.

Greening the White House

On a global scale, commercial and residential buildings account for 37%-45% of total energy consumption, and improving the efficiency of buildings to reduce overall energy use has been an increasingly important policy focus worldwide. Historically, buildings were not constructed with many of the energy saving technologies incorporated in new buildings today. Retrofits to improve a building’s efficiency focus on energy efficient lighting, HVAC, building controls, and water efficiency, among other building functions.

The Clinton Administration’s Greening the White House initiative, announced on Earth Day in April 1993, aimed to improve the energy and environmental performance of the White House and Old Executive Office Building by analyzing, designing, and implementing an energy saving program. The program consisted of an audit, feasibility study, early actions, demonstration spaces, long-term initiative, and technology transfer/outreach. Components implemented as part of the initiative include improving energy and water efficiency, utilizing renewable energy sources, reducing waste streams, improving indoor air quality, and improving overall building comfort and performance. Clinton’s administration replaced the White House’s incandescent bulbs with CFLs and changed out all windows in the Eisenhower Executive Office with double-paned glass windows. The improvements implemented saved $1.4 million in 6 years.

President George W. Bush continued Clinton’s work, and in 2003 installed the White House’s first solar electric system in the maintenance area of the main building. Additionally, Bush executed a recycling program for office paper and added additional solar systems that heated the water in the pool cabana.

The Current Administration’s Initiatives

Reducing America’s carbon footprint has been an important policy initiative of President Obama. Obama’s initiatives started in the White House and included the planting of a 1,000 SF garden and solar panels added to the roof of the White House in 2014, which generate 6.3 kW of energy. The Obama Administration has set a goal to reduce the federal government’s greenhouse gas (GHG) emissions by 40% from 2005 levels by 2025, an objective that is part of the country’s overall aim to reduce GHG emissions by 26%-28% from 2005 levels by 2025.

The U.S. Department of Energy launched the Better Buildings Initiative in 2011, partnering with organizations to increase investment in energy efficiency, reduce energy bills, and avoid carbon pollution. Initially 60 organizations with roughly 2 billion SF of building space accepted the Better Buildings Challenge to improve the efficiency of their building portfolios by 20% or more. Through this program, the government committed to $2 billion in third-party financing. More than 310 organizations representing 4.2 billion SF and 1,000 industrial facilities that have participated in the program, with public and private financing commitments of over $10 billion. The partners have shared their confirmed strategies, increasing overall success of energy savings in buildings.

The White House has historically served as a symbol freedom and democracy, but now also represents the efforts of the federal government in its goal to reduce the environmental impact of buildings.

 

Keeping Cool Without Climate Change

— August 3, 2016

HVAC VentAs a heat dome lingers over much of America, many are grateful for air conditioning. Though some credit air conditioning with shaping our history, evidence is emerging that it may also be putting humanity at risk. Globally, stationary air conditioning systems account for nearly 700 million metric tons of CO2-equivalent emissions, roughly the same emissions as all of Germany. The future may herald even more emissions as the growing wealth and growing populations of developing countries prompts the greater adoption of air conditioning.

Changing the current environmental influence of air conditioning is imperative to avert the catastrophic effects of climate change. In a new report published by the U.S. Department of Energy, Navigant outlines the changes in air conditioning technology needed to reduce greenhouse gas emissions and highlights the R&D pathways to get there.

From Air Conditioning to Energy System

One of the next-generation air conditioning technology research areas highlighted in the report is the integration of air conditioning and other building systems. Fundamentally, air conditioning is the transfer of heat from inside a building to outside a building, which requires the use of energy. Meanwhile, additional energy is spent creating heat for other needs: domestic hot water, cooking, and manufacturing processes. At times, buildings may require both heating and cooling just for thermal comfort. This happens during temperate days where the sunny side of a building may need cooling while the shady side needs heating, or in the scenario of the notorious space heater under the desk.

In a perfect building, waste heat could be reused productively. This is a fundamental shift from individual building processes to a building energy system. Indeed, this is already beginning to happen. Ground-source integrated heat pumps that provide space heating, space cooling, and water heating are already commercially available. Energy recovery ventilators similarly transfer thermal energy between air that is exhausted from a building and fresh air brought into a building.

Deeper building integration is not only necessary, but forthcoming. Axiom Energy, Ice Energy, and CALMAC all have solutions that turn air conditioning and refrigeration systems into energy storage, folding these systems into the Energy Cloud. Moreover, air conditioning controls are beginning the transition into the Internet of Things as more data from different sources can be used to optimize performance. This pivot to an energy system and deeper integration can transform air conditioning from a threat to humanity into a resource that meets the changing energy needs of the world.

 

The IoT and Intelligent Buildings: An Optimization Roadmap

— June 7, 2016

Intelligent BuildingThere is a lot of discussion around the importance of buildings in tackling big challenges, ranging from climate change to energy resilience. Intelligent building solutions are the tools that maximize the flexibility and responsiveness of facility operations to manage energy consumption, allowing for reduced greenhouse gas emissions and response to grid pressures. The intelligent buildings market has been maturing through investments made predominately by the largest customers managing large portfolios and facilities. Technology, and specifically Internet of Things (IoT) and data-driven services, are the evolutionary developments of the intelligent buildings market that now enable optimization of the market as a whole. The opportunity is huge, and as a result, technology giants are making big investments. New partnerships and acquisitions set the stage for deeper market penetration with enterprise customers as well as the midmarket.

Enhancing the Enterprise

Navigant Research has tracked the development of the intelligent buildings market and specifically the evolution of software solutions. Building energy management systems  have been the focus of our research, as they are the offerings that first disrupted the building automation and facilities management industry. This market continues to evolve, and the focus on investment increasingly spans both energy and operational efficiency. The growing demand for showcasing operational efficiency has been the foundation for big moves on the business front, including partnerships and acquisitions.

Siemens and Capgemini recently announced the Navigator platform, a “joint engagement to provide analytics-based services for connected buildings.” The move underscores the magnitude of opportunity to engage enterprise customers in the intelligent buildings market. As the press release framed it, “Together with Capgemini, Siemens is now further developing this Navigator platform to help corporate real estate owners drive business results and meet energy efficiency goals, while maximizing the lifecycle potential of their customers’ real estate assets.” Other major technology players have announced similar partnerships, including Hitachi’s launch of its Insight Group, which is expected to deepen partnerships with tech partners such as SAP and Microsoft. The investment and commitment of both the building technology and information technology and services giants validates the bullish outlook on the intelligent buildings market for enterprise customers.

Setting the Stage for Midmarket Penetration

The midmarket is another important segment of the facilities industry because of the sheer number of these facilities and a legacy of inefficiency in operations that presents big opportunity for optimization. Navigant Research’s new Building Energy Management Systems for the Midmarket report presents the outlook for investment to 2025. The acceleration of the IoT market and continued growth in customer awareness sets the stage for rapid investment in BEMS for the midmarket, which we estimate to reach $1.6 billion by 2025 (at a 24% growth rate from 2016). Our optimistic outlook on the market is built on clear market signals, including similar partnership and acquisition trends that we are tracking in the enterprise segment.

For example, Current by GE announced the acquisition of Daintree Networks to enhance its IoT and energy management capabilities. As a company press release states, “This acquisition will enable Current to expand its building automation platform and its energy-as-a-service offering to small- and medium-size facilities through the deployment of Daintree’s open, standards-based wireless control systems.” There are others taking advantage of the new opportunities in the midmarket through IoT; for example, Intel has made numerous partnerships with companies from Lucid to Building Robotics.

IoT may seem to be a buzzword, but it is increasingly evident the technology trend is changing the game for building energy and operational efficiency. Expect significant partnership and acquisition announcements through the rest of 2016 as the market continues on a fast pitch to broad customer adoption.

 

Retrofits Are Key to an Energy Efficient Building Stock

— April 12, 2016

modern square and skyscrapersEven if all new buildings from today on were built to be net zero energy, it would take several decades for the change to have an appreciable effect on overall building energy consumption. Indeed, 50% of commercial buildings in the United States were built before 1980. Moreover, older buildings adhere to outdated standards—if they adhere to any standards at all—and often have higher energy intensities than new construction. Retrofitting these older buildings is the only path toward substantially reducing the energy footprint of the existing building stock.

Efficiency through Retrofits

In the world of retrofits, installing energy efficient heating, ventilation, and air conditioning (HVAC) systems; LED lighting; and building controls can help building managers lower the levels of energy consumption of building systems. For example, the 85-year-old Liberty Tower in Dayton, Ohio is using each of these strategies to improve energy efficiency. All interior and exterior lights in the 114,000-square-foot facility are being replaced with LEDs, the building’s existing steam boiler is being replaced with two vertical fire tube boilers, and the building controls are being replaced and upgraded to provide advanced programming measures.

Switching to LED lighting provides a substantial savings opportunity in existing buildings. In the case of Liberty Tower, the new lighting system is expected to use 60% less energy than the system it’s replacing. However, more savings are possible in LED retrofits through the addition of controls. Because LEDs provide better dimmability than fluorescent lights, they are better suited to controls. Even though the reduced energy consumption of LEDs reduces the amount of energy available to be saved, controls can allow an additional way of fine-tuning the amount of energy being used, thus providing more savings.

Lights can be dimmed when natural light is present or when a space is unoccupied to provide more savings. However, the level of light output during normal operation can also be adjusted based on feedback of occupants so that energy is not wasted providing more lighting than is needed. Additionally, LED lamps fail differently than incandescent or fluorescent lamps—they gradually grow dimmer at the end of their lifespan. As a result, using lighting controls to initially provide less than the entire output of the LED and steadily increasing output as the lamp fails could decrease the frequency at which lamps need to be replaced. This provides operational savings in addition to energy savings.

Upfront Costs

Though savings from retrofits can be substantial, so too can the costs. For the Liberty Tower retrofit project, the total cost is estimated to be $870,000 and provide annual utility cost savings of $99,000, generating a payback period of 8 years. The payback period, for better or for worse, is considered by many in the industry as an easy shorthand for determining whether or not a given energy efficiency retrofit project or technology will be viable for a particular installation. Most building owners require a payback of 3 years or less, though this depends on the ownership and use of the building.

Liberty Savings Bank owns the Liberty Tower and occupies about 10% of the total floorspace, with the remainder leased to tenants. Because the company is family-owned and occupies part of the building, it can accept a larger payback. However, only about 60% of commercial floorspace in the United States is occupied by its owner. Consequently, larger ticket upgrades, such as deep building envelope or HVAC system upgrades, remain difficult to sell within the retrofit market.

Moreover, because retrofits are prioritized by their payback period and generally have a long lifespan, opportunities with unattractive longer payback periods are the ones that remain. Without either a change in technology or an outside force, the energy savings potential of these opportunities may go unrealized. In the case of Liberty Tower, the project is expected to generate more than $70,000 in utility rebates, making the economic case more practical. With commercial buildings accounting for more than a third of total U.S. energy consumption, regulations and incentives will be the key to reducing the energy footprint of the existing building stock.

Join Benjamin Freas at the Navigant Research’s Retrofits for Commercial Buildings: Moving the Needle on Energy Efficiency in Existing Buildings webinar on Tuesday, April 19, 2016 at 2:00 pm EDT to learn more about energy efficiency in buildings.

 

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