If a study done right here in Washington, D.C. is any indication, there’s a tremendous amount of low-hanging fruit out there in terms of energy efficient gains for America’s office buildings.
Running the study was the Natural Resources Defense Council (NRDC), which partnered with The Tower Companies — a real estate development and management firm here in D.C. — to see how much could be gained by updating the systems in some of Tower’s buildings. They settled on three multi-tenant office buildings in the city’s downtown area — 1707 L Street NW, 1828 L Street NW, and 1909 K Street NW — and brought in two outside firms to retool the buildings’ automated systems, and to recommend other fixes and improvements. NRDC then collected data over the course of 2012 as the updates were brought online.
All three buildings were actually already high-performing in terms of energy efficiency: 1707 L Street had an Energy Star score of 71 in September of 2011, 1828 L Street had a score of 78, and 1909 K Street had a score of 86. Nonetheless, the process identified significant additional savings. 1707 L Street reduced its electricity use by 23 percent, 1828 L Street by 7 percent, and 1909 K Street by 17 percent — an average reduction of 13.2 percent across all three buildings, and a grand total of $218,703 in electricity use savings.
At the end of the study, all three buildings’ Energy Star scores had improved substantially — to 91, 87, and 88, respectively. And even though the research and results only covered 2013, the buildings will continue to benefit from those savings year after year into the future.
The two outside firms — AtSite, Inc. and HVAC Concepts, Inc. — went through the buildings to identify “operational stray.” Examples include automated systems breaking or developing bugs in the software, causing fans, pumps, or other systems to run when not needed, or thermostats getting set for a one-off meeting at night and never getting set back. “Part of the answer is that when a building is well managed there’s an assumption that the stray is not happening,” Philip Henderson — one of the study’s author — said when asked why building owners and managers hadn’t yet caught these problems. “You don’t know it’s happening until you discover it. And you don’t know how long it went on when you do discover it. And what we found in our study is that these kinds of systems reveal stray quickly.”
The study provided a concrete example of how this worked: After reviewing electricity usage at 1909 K Street, AtSite discovered and corrected some faulty controls that were signaling the chiller to turn on at times the building’s management system was set for the chiller to remain off. “While this problem might have been discovered eventually without AtSite’s service, it could have continued undetected for months,” the study pointed out. “This delay would have resulted in wasted energy, wear and tear on the building equipment, and possible disruption to tenants when equipment failed.”
“I think if you back away from the detail,” Henderson explained, “what you find from a sensible building owner or operator perspective is a very simple idea: the savings come from catching stray quickly.”
The total costs of the project for the three buildings was $144,320 in 2012. Up against the electricity use savings of $218,703, that’s a return on investment of 66 percent. And because 2012’s costs included the installation of the new systems and procedures, the annual operating cost to achieve those same electricity savings going forward will be a significantly lower $65,520. (It’s helpful to look at results across multiple buildings since every one is a little different, with higher or lower costs.)
“I think to date there’s been an assumption that these kinds of systems and services are very expensive to implement. But when you think about it as a subscription concept — as a service — and your building is under contract, the cost is coming in as the savings are being realized,” Henderson said. “And what we found in our study is that it’s a profitable venture for the owner or operator.”
Admittedly, Tower’s expenses were probably lower than the typical expenses for similarly sized buildings because Tower negotiated its rates based on a portfolio that included 11 buildings in all, and because Tower’s buildings were initially designed in a way that made the installation of new meters, wiring, and other systems less costly than usual. But a typical building would also start out with far more opportunities for efficiency gains. So after factoring in the higher installation and upgrade costs, the NRDC still concluded that “even more substantial gains are available in typical buildings.” In fact, given the size of the gains found in the already-advanced buildings, the researchers suggest that “large amounts of electricity are used in commercial office buildings to do no useful work.”
These sorts of improvements come with benefits for tenants as well as management: electricity costs are generally passed through to tenants, so lower costs mean lower rent. Improved energy performance can also cut down on maintenance and repair by increasing the lifespan of a building’s systems. Henderson brought up the need to educate tenants, owners, and utilities on the economic value to be gained from further advances in energy efficiency. Cities like Philadelphia, Chicago, Boston, New York, and Washington, D.C. are also starting benchmarking policies which require public disclosure of a building’s energy usage. That, Henderson said, should also drive visibility for these projects.
But the biggest recent change has been good old-fashioned technological advancement. “For a long time there have been companies that could come in and help the owner or operator manage their buildings better,” Henderson elaborated. “What’s new is the very robust capability that new metering, new networking devices, and new information technology gives companies to implement at much lower cost and to monitor many more buildings at lower cost. So it’s growing fast for those reasons.”