Introduction to Commercial Building Energy Efficiency through EPAs ENERGY STAR program Week 1: Why Energy Efficiency Matters 1 Course Overview This course was developed by the United States Environmental Protection Agency (EPA) This is a 3-unit modular course designed to introduce students to the benefits and barriers of commercial building energy efficiency through an in-depth look into EPA's ENERGY STAR program
EPA also offers an 11-unit expanded course covering the benefits and barriers of commercial building energy efficiency in more depth Visit: www.energystar.gov/course 2 Outline Why Should We Care About Energy Efficiency? What are the Barriers to Energy Efficiency and How do We Solve Them? How the ENERGY STAR Program Fits In Energy Efficiency Potential in Commercial Buildings Central Conclusions
3 Class Objectives Upon completion of this unit, you will be able to: Understand the many benefits of energy efficiency to our economy, health, and community. Understand the potential for efficiency in the commercial building sector. Discuss the barriers and solutions to achieving energy efficiency. Identify how EPAs ENERGY STAR program helps drive efficiency in commercial buildings. Discuss the overall return on investment at stake if energy efficiency is deployed at scale. 4
Why Should We Care About Energy Efficiency? 5 What is Energy? Energy is the ability to do work and comes in different forms: Heat (thermal) Light (radiant) Motion (kinetic) Electrical
Nuclear energy Chemical Gravitational Electricity is a secondary energy source, which means that we get it from the conversion of primary sources of energy, like coal, natural gas, oil, nuclear power, and other natural sources. Electricity enables people to power devices like televisions, computers, and cell phones, which cannot be directly powered with primary energy sources. Source: https://www.eia.gov/energyexplained/index.cfm?page=about_home
6 Benefits to Energy Efficiency 7 Source: Capturing the Multiple Benefits of Energy Efficiency. International Energy Agency, 2014. What are the Barriers to Energy Efficiency and How do We Solve Them? 8 Barriers to Energy Efficiency Energy efficiency measures can require a
substantial upfront investment Efficiency potential is fragmentedspread across billions of devices in many sectors These attributes of energy efficiency give rise to opportunity-specific barriers McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 9 Opportunity-Specific Barriers 1. Structural barriers: Individual decision-makers may have incentives to prioritize low upfront cost instead of an investment in efficiency that would pay off in
the long-term. 2. Behavior barriers: Individuals using energy may not have a strong enough incentive to improve efficiency by changing their behavior (i.e. shutting off lights, turning off their computer). 3. Availability barriers: Even decision-makers interested in pursuing efficiency may not have the resources they need to do so (i.e. capital budgets, building management systems, etc.).
McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 10 Opportunity-Specific Barriers McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 11 Opportunity-Specific Solutions Unlocking the full potential of energy
efficiency requires addressing all barriers in a holistic rather than piecemeal fashion. The array of solutions falls into four broad categories: 1. 2. 3. 4. Information and education Incentives and financing Codes and standards Third-party involvement McKinsey Unlocking Energy Efficiency in the US Economy
https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 12 Opportunity-Specific Solutions Recognize opportunityspecific solutions, and the overarching strategies to achieve energy efficiency on a national scale McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 13
Major Areas of Opportunity Include: Evolution of building design to yield zero net energy and ultra-low-energy buildings Taking building energy retrofits to a much higher level, including more widespread and deeper retrofits for larger savings per building Initiatives to change wasteful energy-using behaviors among consumers and businesses Better systems integration, including through intelligent efficiency, i.e., the use of sensors, controls, big data, and computer chips to monitor and control energy use in real time Improvements to the many types of equipment (such as computers, televisions, and elevators) that collectively account for growing miscellaneous energy loads 14
American Council for an Energy Efficiency Economy (ACEEE). (2015). Energy Efficiency in the United States: 35 Years and Counting. Washington, DC. http://aceee.org/sites/default/files/publications/researchreports/e1502.pdf How the ENERGY STAR Program Fits In 15 What is ENERGY STAR? A government-backed, voluntary program that helps businesses and individuals protect the environment through superior energy performance by providing energy-efficient solutions for homes, businesses, and institutions.
2016 In addition to energy and 1999 1992 water, waste tracking is First ENERGY STAR 2003 First ENERGY STAR introduced in EPAs qualified building First Designed to Earn the qualified product ENERGY STAR Portfolio 1995 ENERGY STAR building and
Manager tool First ENERGY STAR first ENERGY STAR qualified qualified home plant ENERGY STAR Products: 20 Years of Helping America Save Energy Save Money and Protect the Environment. http://www.energystar.gov/ia/products/downloads/ES_Anniv_Book_030712_508compliant_v2.pdf?e66c-c7c9 16 Source: Fairfield Research, July 2011 Survey of Good Housekeeping readers 17
EPAs ENERGY STAR Program EPAs ENERGY STAR program specifies the most energy-efficient products, buildings, industrial plants, and new homes all based on the latest government-backed standards. Every ENERGY STAR label is verified by a third-party certification process. 5.5 billion products EPAs ENERGY STAR, History https://www.energystar.gov/about/history 30,000 buildings
130 industrial plants 1.7 million homes 18 ENERGY STAR Certified Buildings More efficient than 75% of similar buildings Use 35% less energy
(on average) Cause 35% fewer greenhouse gas emissions (on average) 19 Why focus on buildings and plants? Energy waste in commercial buildings 30% 20 Why focus on buildings and plants?
Low- to no-cost reduction potential 10% 21 Why focus on buildings and plants? U.S. CO2 Emissions 45% Commercial buildings & industrial plants
22 Energy Efficiency Potential in Commercial Buildings 23 Commercial Sector Potential The commercial sector will consume 20% of the 2020 baseline end-use energy Commercial sector has the potential to reduce consumption by 29% by 2020* This requires $125 billion in upfront investment Provide present-value savings of $290 billion
Avoid 360 million tons of GHG emissions by 2020 *By deploying all net present value-positive energy efficiency improvements McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 24 Low-cost Efficiency Improvements
Operations and Maintenance Occupant Behavior Lighting Controls Base Building Equipment 25 Barriers to Commercial Sector Energy Efficiency: Existing Buildings
Agency issues Elevated hurdle rate Capital constraints Lack of awareness McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 26 Solutions to Commercial Sector Energy Efficiency: Existing Buildings Mandate efficiency at time of retrofit
Create value with voluntary standards Finance through a public-private partnership Provide monetary incentives McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 27 Student Discussion Scenario: A small portfolio owner (5 buildings) wants to increase their overall energy efficiency by 20% within 3 years. Exercise:
1. Break into groups with each one focused on a different type of barrier (structural, behavioral, availability, agency issues, elevated hurdle rate, capital constraints, lack of awareness). 2. Each group should identify possible barriers within that type to achieving the goal. 3. Each group should identify possible solutions to overcoming the barriers they identify. 28 Success Story: Staples Staples has been an ENERGY STAR partner since 1999
Set a 2020 global goal of reducing energy by 25% compared to a 2010 baseline Enacted a comprehensive management program using: Technological solutions Behavioral changes Process-based solutions Saves over $1 million in operating expenses annually Reduced electricity intensity by 7.5% from 2010-2015 29
Success Story: Food Lion Food Lion has been an ENERGY STAR partner since 1998 Set a 2020 global goal of reducing energy by 20% compared to a 2008 baseline More than 1,000 stores earning ENERGY STAR Certification Implemented LED retrofit program in 104 stores, saving 33,735 kWh in 2016 Over $5 million in cumulative energy savings 30
Student Discussion Scenario: You and several colleagues want to start a green team at your company and need to convince your organizations leadership to take steps towards energy efficiency in your building. Exercise: 1. Break into groups and develop a communications message outline. Include the top 3 benefits for your organization to take energy efficiency seriously. Make sure to also address possible barriers and solutions. 2. Present your message with the class as if they were your organizations leadership. 31
Central Conclusions 32 Central Conclusions Energy efficiency offers a vast, low-cost energy resource for the U.S. economy But only if we craft a comprehensive and innovative approach to unlock it Significant and persistent barriers will need to be addressed at multiple levels to stimulate demand for energy efficiency and manage its delivery across more than 100 million buildings and
billions of devices McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 33 Central Conclusions A holistic approach, if executed at scale, would yield gross energy savings worth more than $1.2 trillion, well above the $520 billion needed through 2020 for upfront investment in efficiency measures ~$50 billion/year investment over a decade
McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 34 Central Conclusions Such a program could reduce end-use energy consumption in 2020 by an estimated 9.1 quadrillion BTUs, roughly 23% of projected demand, potentially abating up to 1.1 gigatons of GHG annually 23% U.S. non-transportation energy consumption reduction > total annual non-transportation energy consumption of Canada GHG abatement = removing entire U.S. passenger fleet
Equivalent to shutting down global energy use for 2 weeks McKinsey Unlocking Energy Efficiency in the US Economy https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Sustainability/PDFs/US_energy_efficiency_full_report.ashx 35 Student Assignment Identify potential barriers and solutions to energy efficiency in each building. Building Year Built Capital
Investment Notes 1 1912 $100,000 Warehouse converted to office building Inefficient base building systems Will need significant capital for efficiency retrofits and historic preservation Multiple tenants all sustainability-focused or
corporate responsibility companies 2 1999 $50,000 Multi-family building in a growing neighborhood with newer apartments Need to quickly increase competitiveness Low-occupancy and high tenant turn-over Focus on reducing occupancy costs 3
1975 $250,000 Main office headquarters of growing firm with multiple branches Focus is on occupancy comfort In a city offering tax credits for efficiency projects Will not be occupied during renovation 36 Review
37 Review Questions What are three potential impacts that climate change will have on your organization or community? What are additional barriers and solutions to energy efficiency that we did not cover? What are some of the different benefits that energy efficiency improvements can have? How does encouraging buildings to become more efficient fit with the mission of the EPA? 38
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