NGA National Governors Assoc: IMT presentation on Benchmarking
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NGA National Governors Assoc: IMT presentation on Benchmarking
- 1. Energy Benchmarking and Disclosure Laws Cliff Majersik Executive Director, Institute for Market Transformation cliff@imt.org @IMTCliff
- 2. 2
- 4. Building Sector Greenhouse Gas Emissions Percentage of Total Carbon Emissions from Building Sector 75 75 74 70 65 62 51 38 US Chicago Dallas Minneapolis New York City Philadelphia Salt Lake City Washington, DC The building sector is the dominant user of energy and generator of CO2 emissions in the U.S. This is more true in cities due to density.
- 5. Link between Codes and Energy Performance Policy Energy Codes Construction Operation Renovation time Energy Performance Policy Operation
- 6. Rating and disclosure drives demand and competition
- 7. Rental Premiums for Green Commercial Buildings in the US Jackson, 2009 Pivo & Fisher, 2010 Wiley et al., 2010 Fuerst & McAllister, 2011 Eicholtz, 2010
- 8. Added Value of ENERGY STAR-Labeled Commercial Buildings in the U.S. Market Wiley et al 2010* 30% Fuerst & McAllister 2009/11 Jackson 2009 25% Pivo & Fischer 2010* AVERAGE PREMIUM Eicholtz et al 2010* 20% 15% 10% 5% 0% RENTAL PRICE SALE PRICE OCCUPANCY RATE
- 9. A Virtuous Cycle When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates. 9
- 10. U.S. Benchmarking Policy Landscape
- 11. Covered Properties New York City Buildings 50k SF+ ~16,000 buildings, 2.5 billion SF San Francisco Buildings 10k SF+ ~2,700 buildings, 205 million SF
- 12. NUMBER OF PROPERTIES COVERED ANNUALLY Each year, existing policies will impact more than 51,000 properties Boston 1,600 Chicago 3,500 New York City 15,300 Philadelphia 1,400 Seattle 3,600 Washington State 4,600 Austin 2,800 San Francisco 2,700 Minneapolis 625 Washington, DC 2,000 California 13,600 Source: IMT
- 13. BUILDING AREA (IN SQUARE FEET) COVERED ANNUALLY Totaling approximately 5.8 billion SF of floor space in major real estate markets Chicago 900 million SF Boston 250 million SF Philadelphia 244.5 million SF Seattle 295 million SF Washington State 247 million SF Austin 113 million SF California 347 million SF Minneapolis 110 million SF Washington, DC 357 million SF New York City 2.8 billion SF San Francisco 205 million SF Source: IMT
- 14. Early Energy Intensity Findings in New York City The poorest performing buildings use 4 to 8 times the energy of the highest performing buildings. By improving the poor performers citywide energy reductions of 18% to 31% could be achieved.
- 15. Small Businesses and Job Creation First report documenting job growth from energy benchmarking policies Profiles of small businesses adding staff and increasing client bases KEY TAKEAWAY: Financing not the key barrier. Primary issue is demand. 15
- 16. Small Businesses and Job Creation “As a Silicon Valley venture capitalist … I tell our green startup companies to focus on San Francisco or New York City. That’s where the action is going to be.” - Elton Sherwin, venture capitalist, senior managing director, Ridgewood Capital “The Greener Greater Buildings Plan has spurred the New York Market to interest and activity around energy efficiency. Over the past year, we have begun working with over 75 million square feet of real estate in New York and over 400 new clients.” - Lindsay Napor McLean, COO, Ecological “When an owner sees a benchmarking score that is lower than expected, they’re a little more receptive to improvements to bring the score up, which in turn lowers their utility costs.” - Kevin Dingle, president, Sustaining Structures 16
- 19. Building Owner Building Physical and Operating Characteristics Energy Consumption Tenants Bill Payer(s)
- 20. The Data Access and Transparency Alliance (DATA) is a collaborative effort led by the commercial real estate industry and green building organizations to provide building operators with energy consumption data to advance energy-efficiency and energy cost savings in buildings. More information can be found: http://www.energydataalliance.org/
- 22. Utility Meter Data Sensitivity
- 23. Thank you! Cliff Majersik Executive Director, Institute for Market Transformation Washington, DC cliff@imt.org @IMTCliff
- 24. Building owners often can’t get energy data for their buildings Barriers: •Separately-metered tenants •Lack of clear procedures •Utility policies and state privacy laws •Lack of standardization
- 26. Partners of Green Lease Library http://www.greenleaselibrary.com/
- 27. Green Lease Leaders Recognition Program Green Lease Leaders is a recognition program developed by www.GreenLeaseLibrary.com, with support from the Institute for Market Transformation (IMT) and the Department of Energy’s Better Buildings Alliance. The Green Lease Leader designation recognizes companies or broker teams that have successfully implemented green lease language into their new or existing leases. The website and application process will be launching this January 2014.
- 28. International Policy Timeline 1997: Denmark requires energy certification for homes and buildings 2004: Norway, part of the European Economic Area, formally agrees to implement the EPBD and building certification requirements 2007: Brazil adopts voluntary building rating regulations that become mandatory in 2012 2010: EPBD Recast The EPBD is recast to strengthen the energy performance requirements for all EU Member States 1999: Australian Capital Territory requires energy certification for homes 1996 1997 1998 1999 2000 2001 2002 2002: The European Parliament adopts the Energy Performance of Buildings Directive (EPBD), requiring all EU Member States to establish mandatory energy certification schemes for homes and buildings 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2008: China adopts a mandatory energy rating program for government buildings. 2008: Turkey adopts a mandatory certification scheme 2010: Australia enacts mandatory energy rating for commercial structures.
- 29. Takeaways Boldest action is in cities - Federal outlook remains uncertain; state and local action to continue Leading cities are looking beyond disclosure - Integrated policy frameworks emerging with focus on poor performers Support from business sector is critical
Editor's Notes
- In large cities with significant public transportation, buildings typically account for 70% or more of CO2 emissions and energy usage.There are two types of policies that regulate energy consumption in buildings: building codes, and energy performance policy.
- This view is a little simplified, but in general, building codes touch the building at initial construction and then again during renovation. Energy Performance Policy complements traditional building codes by focusing on the operational phase of the building lifecycle.
- Early Studies have been helpful, more research needed
- NewYork City: Properties over 50,000 SF account for ~2% of building stock by number, but 50% of floor area.
- Here’s the map of utility programs—includes electric, gas, steam. Lines up pretty well with map of mandatory benchmarking policies—has often been a catalyst for utility programs. Some of the CA utilities had programs in place before there were benchmarking policies in their jurisdictions. ComEd in Illinois also developed its Energy Usage Data Service back in 2008 (though Chicago now has a benchmarking requirement).
- Utilities have implemented successful programs, but there are three main challenges for utilities:1. Privacy concerns– This issue is most pronounced for multi-tenant buildings that are separately metered—one solution is to aggregate meters. But utilities often receive little guidance from regulators on appropriate meter threshold. Issue is more confusing/complex b/c privacy concerns in the context of benchmarking have been debated in parallel with privacy and security issues raised by smart grids and more granular data. Expectations of privacy for multi-tenant commercial buildings low—aggregated data is much less sensitive than real-time data.