The Retrofit Triangle!Monetizing green building efficiency gains by linking        technology,        technology operation...
PANELISTS                                      The Retrofit TriangleDaniele Horton (Operations)D i l H t (O          ti  )...
Discussion Objectives:1. Recognize the need for   integrating technology,   operations and finance to spur   retrofits2. L...
Existing Building RetrofitsRetrofits are a win-win solution to environmental and economic challenges                      ...
The Retrofit Triangle!• Monetizing green building efficiency gains by linking technology, operations and finance• Breaking...
1. INVESTIGATE                          2. IMPLEMENT                          3. IMPROVESection IOPERATIONSDaniele HortonS...
1. INVESTIGATE                 7
Building Operations last a lifetime!Applying integrative design principles to help managing and financing buildingretrofit...
Set Goals & Create TeamApplying integrative project delivery (IPD) principles to help managing and financingbuilding retro...
Gather DataThe first step in the retrofit process is to   Level I ASHRAE     Walk-through surveygather data, perform audit...
Build an Energy ModelSoft Audit Process; good screening tool to identify Energy Efficiency OpportunitiesEnergy Modeling da...
Develop a Baseline• Develop a baseline or “business as  usual  usual” case to compare against the  value of the efficiency...
Identify OpportunitiesOften energy systems are original and retrofits can save 20%-50% in energy costs                    ...
Sample Retrofit OpportunitiesSustainable                 Water Efficiency                  Energy &                       ...
Right steps in the right orderStart with load reduction projects. There is no silver bullet! It’s ok to start in smallstep...
Analyze OptionsUsing advanced technology tools and cost analysis methods to get insightful data toenable superior analysis...
2. IMPLEMENT               17
FinanceInnovative financing options exist to help with accessing capital with attractive rates andterms for deep energy re...
LeasesEnergy Aligned Leases are key for sharingthe costs and benefits of green investmentsand address the split incentive ...
Contract,Contract Construct and CommissionSmart and integrated performance contractstructures take advantage of rebates,in...
3. IMPROVE             21
Measurement and Verification (M&V)Smart technologies and M&V tools assist with continuous buildings operationsimprovement ...
M&V: More Automation & VisibilityBetter technology, increased automation and higher performance drives building valueTypic...
Share the Success!Business benefits are the main drivers for green building retrofits Hard Value                          ...
Increased Building Performance TransparencyPerformance Ratings, standards and regulations for the Real Estate IndustryEnti...
Operations Conclusions                 • Advanced technology tools aid in                   gathering quality data to enab...
1.                                       1 ASSESS                                       2.                                ...
1.1 ASSESS           28
Financing is not the problem -Undefined risk is the problem EE upgrade overview:           Construction Risk is Complex   ...
Define the Investment Risk                           Unknown High Risk      Low Risk     Risk      Money flows to         ...
Investment risk can be viewed differentlyPeople Credit Real Estate                                       Cash flow        ...
But it s OK ! Complex risk challenges    it’shave been dealt with before.Expert 3rd party written reports using defined st...
Ownership & debt culture varies by “tribe”                                    tribe        1.        1 SFR / 1-4 units    ...
2.2 ACCESS TO CAPITAL                      34
Investment Capital Access Depends oneach Unique SituationHolding Period    MUSH vs.. InvestorBuilding Size     SBA vs.. La...
Source of Investment/Financing DollarsCASH    Owner Cap Ex budgetDEBT Traditional bank loanOTHER Utility, public, ESCO    ...
Construction Lending is specialized risky                           specialized,Upgrades have different risk profiles   1....
3.3 APPRAISE             38
“Market Value based on buyers sellers Market Value“         buyers,When property owners are                               ...
Value = dependable results over time•   Snapshots performance views not enough•   Make energy/resource use visible•   Beha...
Spinning the value flywheel – Learn & Earn1. As-Is, where-Is    baseline hi t i operation    b    li historic     ti2. Fru...
Deep Retrofits = Value Beyond Cost                  Savings Hard Internal • Expense Savings       "Not everything that  • ...
Building/Resource Management System isvital• A monitoring system is an investment not a cost                            in...
Operating data + Analysis = Reports“How much money“Ho m ch mone are you losing?”                   o“Audit = Action”  The ...
FINANCE CONCLUSIONSFinance Conclusions              • A monitoring system is an                investment, not a cost     ...
1. MODEL                                 2. MEASURE                                 3. MANAGESection IIITECHNOLOGYAniruddh...
1. MODEL           47
Building Information Modeling EnablesSustainable Building Operations                         MANAGEIntelligentmodel-basedp...
BIM Guides Evaluation Of EnergyConservation Measures (ECMs)  Plant Upgrades?              Lighting Upgrades? Building Enve...
Rapid Energy Modeling Streamlines EnergyAssessments Of Existing Buildings      Satellite     Detailed       Energy        ...
Conceptual Energy Analyses Allow EarlyStage Environmental Assessments
2. MEASURE             52
International Performance M&V ProtocolEndorses Calibrated Simulation                           Chart from International Pe...
Modeling And Measuring Optimize ECMs                        Net Zero Energy                                     gycalibrat...
Better Instrumentation Increases DataTransparencyBuilding Control System   Sub-meters   Sensors                           ...
3. MANAGE            56
Understanding Building Energy Management Services Technologies         Control               Visualization Hardware       ...
Innovative Hardware Technologies ThatDeliver High Return On Investment  Direct Digital Controls; Wireless, Smart   Thermos...
Control Layer Helps Monitor And ManageHardware  Smart Wireless Controls                  Demand Side Management Control  M...
Advanced Analytics Aid Decision Making    Statistical Analysis                    y    • Benchmarking    • Input Inference...
Visualization Technologies EnhancesCommunication And Visibility  Building Performance Dashboard               3D, Real tim...
Active Systems & Services Deliver End to                                  End-to-End Solutions for Sustainable Buildings  ...
Bringing It All Together             3               1                            MODEL       MANAGE                   ver...
Real-time, BIM-basedReal time BIM based Energy PerformanceDashboard                                         64
Alternate Incentive And Contract StructuresNeeded For Successful Retrofits                                 Owner          ...
Some Of The Standards AcceleratingRetrofitsPhase     Entity        Name               GoalModel     ASTM          BEPA    ...
Technology Conclusions Tech. Value      Benefits To      Benefits To Proposition       Finance         Operations    Data ...
Retrofit TriangleConclusions                    68
Operations Conclusions                     • Technology aids in g                                gy        gathering q    ...
FINANCE CONCLUSIONSFinance Conclusions                    •   Integration: transparency, data over time,                  ...
FINANCE CONCLUSIONSTechnology Conclusions                 •   Technology can bridge the gap between                     fi...
Key Take aways    Take-aways• Monitoring system is an investment, not a cost• “D t f ” = nothing h  “Data fog”   thi happe...
QUESTIONS            73
END! -- Thank You       THANK YOU!                    74
Section IVPANELIST BIOS                75
David HodginsIn hiI his role with th CCI EEBRP, D id consults t commercial portfolio         l   ith the      EEBRP David ...
Daniele Horton, LEED AP + O&M        HortonDaniele Horton has over 15 years of industry experience. She is the Sustainabil...
Aniruddha DeodharAniruddha Deodhar is Sustainability Program Manager at Autodesk, wherehe is responsible for end to end en...
James FinlayIn addition to managing and reviewing appraisals and a wide variety of commercialproperty types, he is also th...
END! -- Thank You
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Retrofit Triangle Greenbuild 2011 Session Pl12 V10

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Retrofit Triangle Greenbuild 2011 Session Pl12 V10

  1. 1. The Retrofit Triangle!Monetizing green building efficiency gains by linking technology, technology operations and finance Greenbuild International Conference and Expo Convening what comes next in the green building movement Thursday, April 14, 2011 1
  2. 2. PANELISTS The Retrofit TriangleDaniele Horton (Operations)D i l H t (O ti )Sustainability Manager Monetizing green building efficiency gains byThomas Properties Group linking technology, operations and financeJames Finlay (Finance) Every successful energy/resource efficiency retrofitVP, Sr. Commercial Appraisal involves an ongoing integration of three normallyManager,Wells Fargo distinct and separate functions: operations, technology and finance. This three sided relationshipAniruddha Deodhar (Technology)A i ddh D dh (T h l ) and it i f d its information exchange f ti h forms th R t fit the RetrofitSustainability Program ManagerAutodesk Triangle. An expert from each discipline will illustrate by examples the challenges and key elementsDavid Hodgins ( g (Moderator)) needed to create this vital linkage. When set up g pBuilding Energy Efficiency Retrofit correctly, data flowing from the building’sProgram, Clinton Climate Initiative energy/resource management operation can supportCollaborators: financing to achieve ever higher levels ofResearch: Genaro BugarinIllustrations: Jonathan Smith performance res lting in value creation resulting al e creation. 2
  3. 3. Discussion Objectives:1. Recognize the need for integrating technology, operations and finance to spur retrofits2. Learn what data is required to judge the investment risk and make finance available3. Understand how implementing efficiency retrofit projects translates to investment value with social and environmental benefits 3
  4. 4. Existing Building RetrofitsRetrofits are a win-win solution to environmental and economic challenges • 98-99% of the US building stock is made up of structures that are already built or near completion p • Carbon emissions need to be cut 80% by 2050 and US Buildings are responsible for 40% of CO2 emissions • Nearly 75% of U.S. Commercial Buildings are 20+ y old and ready for a g yrs y Retrofit • Building Retrofits Offer Lowest Cost, Highest Payoff • President Obama passed the “Better Buildings Initiative” to catalyze private‐sector investment through a series of incentives to make existing buildings more efficient.
  5. 5. The Retrofit Triangle!• Monetizing green building efficiency gains by linking technology, operations and finance• Breaking down the SILOS to monetize the benefits and spur green building retrofits I . Operations - Investigate, Implement, Improve II . Finance - Assess, Access Capital, Appraise III . Technology - Model, Measure, Manage T h l
  6. 6. 1. INVESTIGATE 2. IMPLEMENT 3. IMPROVESection IOPERATIONSDaniele HortonSustainability ManagerThomas Properties Group 6
  7. 7. 1. INVESTIGATE 7
  8. 8. Building Operations last a lifetime!Applying integrative design principles to help managing and financing buildingretrofit projects during ongoing operations. p j g g g pDesign / /ConstructionDesign Construction Operations (Life of Building)30% - 40% 60% - 70% life cycle costOne tiO time Event E t On-Going Process O G i PCapital Budgets Operating BudgetsFirst Cost Ongoing CostsIntegration for design Integration of financesolutions through and operations throughEco CharrettesEco-Charrettes technology! 8
  9. 9. Set Goals & Create TeamApplying integrative project delivery (IPD) principles to help managing and financingbuilding retrofit projects during ongoing operations
  10. 10. Gather DataThe first step in the retrofit process is to Level I ASHRAE Walk-through surveygather data, perform audits and link them data Level II ASHRAE Detailed survey andto the technologies best suited to achieve energy analysisa particular goal. Level III ASHRAE Detailed analysis of capital intensive capital-intensiveSTEPS:S S modifications (known as Investment grade audits) • Gather and track data • Establish baselines • Benchmark • Analyze • Get technical assessments and audits. 10
  11. 11. Build an Energy ModelSoft Audit Process; good screening tool to identify Energy Efficiency OpportunitiesEnergy Modeling data is used to: • Analyze retrofit options to achieve greatest energy savings within b d t t t i ithi budget • Achieve aggressive performance targets • Compare Model Results vs. Actual Data (Utility Bills) to identify potential anomalies with energy consumption • Assist in getting financing & rebates • Select mutually exclusive investments • Balance energy performance optimization Carbon footprint reduction optimization, reduction, energy savings and positive net present value 11
  12. 12. Develop a Baseline• Develop a baseline or “business as usual usual” case to compare against the value of the efficiency savings and investments.• Failure to recognize business-as- usual investments is a key barrier to energy efficiency.• These capital investments become avoided future costs when efficiency investments replace them, th f i t t l th therefore making the efficiency much more economical. CNP Case Study I 2003/2010 Electrical Consumption 61.6% Increase in occupancy with only a 1.3% p y y increase in kwh consumption due to deep energy saving retrofits. Over $12M Savings since 2003 12
  13. 13. Identify OpportunitiesOften energy systems are original and retrofits can save 20%-50% in energy costs City National Plaza . Before and After retrofit photos
  14. 14. Sample Retrofit OpportunitiesSustainable Water Efficiency Energy & Materials & Indoor AirSites Atmosphere Resources QualityRestore open spaces Install metering devices & Monitor , meter & commission Perform a waste Implement Indoor Air controls main building systems Stream Audit Quality BMP’sImplement erosion Perform ongoing Distribution Maximize heating and cooling Invest in trash Monitor Outdoor Aircontrol strategies system audits, leak detection efficiencies & Install variable compactors Delivery and increase and repair frequency drives on equipment natural VentilationInvest in alternative Install native & drought Lighting upgrades and controls Invest in recycling Reduce Particulates incommuting g resistant Landscapep ( (Efficient lights, Daylight g , y g infrastructure: Air Distribution (Install (transportation programs Harvesting, motion sensors etc. containers, loading high performance dock collection areas filters)Install EV charging Maximize Indoor Plumbing Install a building automation Infrastructure area Install Carbon Dioxidestations, bike racks, Fixture and Fitting Efficiency system , invest in DDC, wireless to support recycling (CO2) Monitorsprovide storage and (toilets, urinals, faucets, controls, energy optimization of construction wasteshowering facilities aerators and showerheads) software & demand response infrastructureLight Pollution Reduction Install efficient Irrigation Retrofit main building systems: Purchase(Shield exterior lamps, systems: Drip Irrigation, Smart chillers, cooling towers, boilers, entranceway matsinstall lighting controls Irrigation Controls, Soil fan motorsfor interior lighting) Sensors controls & Weather StationsHeat Island Reduction Implement a Cooling Tower Building Envelop: Seal windows , Invest in green(White roofs, light Chemical Management and install window films, retrofit cleaning equipment &colored paving etc…) water efficiency program windows with higher R-Value materialsStormwater Invest in on-site generation andManagement (Green renewable Energy systems (Fuel roof, rain capture, etc…) Cell, Wind, Geothermal & Solar  Energy)
  15. 15. Right steps in the right orderStart with load reduction projects. There is no silver bullet! It’s ok to start in smallsteps as long as continuous improvement is made overtime. p g p There is no silver bullet! The goal is to continue to make progress and improvements over time… OI RO Fan and Plant Meter & Load Motor Upgrades Tune up Lighting Reductions Systems Time and Capital OutlaySource: BOMA BEEP (BOMA Energy Efficiency Program) 15
  16. 16. Analyze OptionsUsing advanced technology tools and cost analysis methods to get insightful data toenable superior analysis and decisions.Economic decision tree: Using NPV to choose between mutually• Evaluate Individual and Bundled exclusive investments (sample analysis): Measures• Perform a Gap Analysis• Use NPV to choose between mutually exclusive investments. y• Create Pathway to Very Low Energy/Net Zero• Tell a Compelling Story Source: Energy Star Building Manual . Chapter 3 Investment Analysis: http://www.energystar.gov/ia/business/EPA_BUM_CH3_InvestAnalysis.pdf 16
  17. 17. 2. IMPLEMENT 17
  18. 18. FinanceInnovative financing options exist to help with accessing capital with attractive rates andterms for deep energy retrofits Key Financing Mechanisms Purchasing Loans, Bonds Lease Operating / Capital Leases Performance ESCO financing Contracting New Financing g PACE, On-bill Financing, , g, Options Energy Service Agreements (ESA) 18
  19. 19. LeasesEnergy Aligned Leases are key for sharingthe costs and benefits of green investmentsand address the split incentive dilemma thatcan hinder retrofits. Benefits to investorswill be impacted by leases, holding periods,and the ability to have tenants pay for thebenefits they receive. Sample Green Leasing Checklist for Landlords &Lessons Learned: Tenants to Discuss and Mutually Agree Upon: y g p• Address the split incentive barrier through Financial responsibility and ownership of benefits of green Energy Aligned Leases* investments• Incorporate green / energy aligned leasing ENERGY STAR Rating provisions into your master lease to allow LEED Certification pass through costs as operating expenses Strategies for reducing travel demand and car dependency Efficient water management• Can work with most lease types and Management of energy use and greenhouse gas emissions 19 structures Purchase of Green Power• Leases should counts savings over the length Smart Metering of a projected payback period, instead of the Controllability of Systems useful life of the improvements Management of indoor environment quality Green Cleaning & maintenance Efficient waste management Sustainable Purchasing Policy Waste minimization and recycling Green TI Guidelines 19
  20. 20. Contract,Contract Construct and CommissionSmart and integrated performance contractstructures take advantage of rebates,incentives and innovative financing structuresto fund retrofits.Lessons Learned: • Financing structures involving properties with debt / mortgages are more challenging • REITs have to go to revolving credit facilities or investors and therefore money spe o cap a is money that o ey spent on capital s o ey a can’t be distributed to investors. Using financing structures such as ESA & PACE means less debt on their books… and more f d available f b k d funds il bl for investors 20
  21. 21. 3. IMPROVE 21
  22. 22. Measurement and Verification (M&V)Smart technologies and M&V tools assist with continuous buildings operationsimprovement so that you can do more with lessDRIVERS KEY FUNCTIONS MAIN TOOLS BENEFITSIncreasing energy Gather Data Ongoing Metering Higher Energydemand & Smart Meters EfficiencyIncreasing cost of Analyze Data Building Lower Operatingpower Automation and Maintenance CostsIncreasing Present data in Commissioning Better Indoor Aireconomic pressures simple and useful Quality • Occupancy ways • Earnings • CapitalIncreasing focus on Predictive, Wireless Greater Occupantenergy performance f adaptive and d ti d Solutions, S l ti Comfort C f t, • Tenants automated Direct Digital Controllability and • Government actions Controls Productivity • InvestorsIncreasingly gy Accumulate Software Lowercomplex building knowledge with Applications environmentalmanagement key feedback loop impactperformanceindicators (KPI’s)Increasingly limited Connect building Dashboards Increased NOIbuilding structure to the and propertymanagement functions it exists valuesresources to fulfill 22
  23. 23. M&V: More Automation & VisibilityBetter technology, increased automation and higher performance drives building valueTypical Building Technology Today• Pneumatic • DDC I Wireless• Analog • Image capture + sensors• Manual gauges • Intelligent Processing• High operations cost • Large memory • ProgrammableBLIND! VISIBLE!Manual Instrumentation, Not Automation facilitatesProgrammable, No Diagnostics… superior management andEquals: Wasted Energy, Higher performanceDowntime, More Labor Required 23
  24. 24. Share the Success!Business benefits are the main drivers for green building retrofits Hard Value Soft Value 8.5% Reduction in operating costs Market differentiation & reputation 6.8% Increase in building values Growing tenant demand 9.2% Increase in ROI Reduced obsolescence 6.4% Increased occupancy Lower energy cost risk 6.2% Increases in rent Increase in regulationsSource: McGrall Hill, Green Outlook 2011: Green Trends Driving GrowthDeep Retrofit Success Stories Investment Cost Investment Cost City C National Plaza Empire S State Building $11M $13.2M $13 2M Office Office Annual energy savings Annual energy savings Los Angeles, CA New York, NY $4.3M $4.4M 3.2 Million GSF 2.8 Million GSF Energy Reduction Energy Reduction 2 (51) Story Towers (102 Stories) 37.5% 38% $11 M (Investment Cost) $13.2 M (Investment Cost) $4.3 Million Annual $ $4.4 Million Annual $ Energy Savings Energy Savings 37.5% Energy Reduction 38% Energy Reduction 24
  25. 25. Increased Building Performance TransparencyPerformance Ratings, standards and regulations for the Real Estate IndustryEntity Name ScopeUSGBC (2010) LEED Building Performance Global PartnershipGreenprint Greenprint index GlobalFoundation (2010) ( )GRESB Global Real Estate Global(2009) Sustainability BenchmarkCDP Carbon Global Disclosure projectUN-PRI (2009) SBCI Common Carbon Metric GlobalENERGY STAR Energy Star Portfolio Manager American(Prior to 2004)CR (2007) The Climate Registry AmericanBREEAM International Sustainability European(2010) Alliance (ISA)Green Rating Green Rating EuropeanAlliance (2010)IPD (2008) Eco Ledger EuropeanCalifornia (2007) AB1103 MunicipalityBetter Building Benchmarking Working Group MunicipalityPartnership (2008)New York City LL 84 Municipality(2011) 25
  26. 26. Operations Conclusions • Advanced technology tools aid in gathering quality data to enable better analysis and decision-making • Innovative financing structures can help get through the cost barrier to pay for retrofits... But accessing these requires good pre- and post-project d ! d d j data! • Sharing modeling data can help get access to capital whether internal or 3rd capital, party • Ongoing M&V tools enable continuous building operations improvement • Sharing data post retrofit can help support hard and soft value creation and higher property values
  27. 27. 1. 1 ASSESS 2. 2 ACCESS CAPITAL 3. 3 APPRAISESection IIFINANCEJames FinlayVP, Sr. Commercial Appraisal ManagerWells Fargo 27
  28. 28. 1.1 ASSESS 28
  29. 29. Financing is not the problem -Undefined risk is the problem EE upgrade overview: Construction Risk is Complex Compare, select Imprecise models upgrades d Lack of collaborationNew financing options Use technology Scope too ambitious F i n R Collaboration a n c i i s k Lack of baseline Finance Risk n g Relationships p to measure against Risk  Well  Adjusted  defined  defined Rate of  Risk Return 29
  30. 30. Define the Investment Risk Unknown High Risk Low Risk Risk Money flows to investments Corp. Junk  Bonds US  Treasury ??? when there is a clear and measurable risk Not  ot adjusted rate of OK OK OK return.Use technology to establish point of beginningand then track on-going performance 30
  31. 31. Investment risk can be viewed differentlyPeople Credit Real Estate Cash flow Risk Reversion*, value at sale Regulations R l tiUtility Prices y Incentives, disclosure requirements 31
  32. 32. But it s OK ! Complex risk challenges it’shave been dealt with before.Expert 3rd party written reports using defined standardsE t3d t itt t i d fi d t d d 32
  33. 33. Ownership & debt culture varies by “tribe” tribe 1. 1 SFR / 1-4 units 14 2. Small C & I: SBA, mom & pop/o e use $ pop/owner-user < $2MM 3. Medium C & I: larger owner- user/part owner-user, local investor – $2MM t $10MM to 4. Large C & I: multi-tenant leased investment – >$10MM $ 5. Multifamily: medium / large investor grade apartments, condos 6. Specialty: gas station, fast food, hotel/motel, theater, data centers 7. 7 MUSH: Municipal, University, S h l M i i l U i it School (grades 1-12), Hospitals 33
  34. 34. 2.2 ACCESS TO CAPITAL 34
  35. 35. Investment Capital Access Depends oneach Unique SituationHolding Period MUSH vs.. InvestorBuilding Size SBA vs.. Large C&IUpgrades Choice EE or Distributed GenerationSplit Incentive Green Leases 35
  36. 36. Source of Investment/Financing DollarsCASH Owner Cap Ex budgetDEBT Traditional bank loanOTHER Utility, public, ESCO SBA Utility On-Bill y ata Grant Performance Da Incentives Contracting PACE, PACE Plan C Solar programs, DG programs 36
  37. 37. Construction Lending is specialized risky specialized,Upgrades have different risk profiles 1. Construction lending specialized1. On‐site power – • Costly to manage Solar photovoltaic, wind, hydro • Small loans not practical2. Energy Efficiency (EE) –2 Energy Efficiency (EE) 2. Often credit based, not collateral 2 Often credit based not collateral Insulation, windows,  sensors 3. EE complex to verify3. Power offset  4. Financing matters,  just not as  solar thermal, fuel cells, cogen much as imagined, won’t change Existing Buildings N New C Construction t ti 37
  38. 38. 3.3 APPRAISE 38
  39. 39. “Market Value based on buyers sellers Market Value“ buyers,When property owners are Sales Compconvinced something makes i d thi k Income Incomesense, that’s the marketInformation + intuition Three Hits Quantity + Quality at Value at ValueOwner’s “skin in the game” is themost conservative test t ti t t Cost* Decision To  Decision To Investments Data +  Act Analysis y No Action 39
  40. 40. Value = dependable results over time• Snapshots performance views not enough• Make energy/resource use visible• Behavioral economics can be tricky• Lots of people, all need to be convinced Occupants Appraiser GovernmentOwner Underwriter examiner Operations Chief creditC level Banker B k staff officer RE agent 40
  41. 41. Spinning the value flywheel – Learn & Earn1. As-Is, where-Is baseline hi t i operation b li historic ti2. Fruit on the ground 1 building Maintenance3. Low Hanging Fruit 6 payback < 2 years y y 24. Medium Payback VALUE  2-7 years STAGES5. Long Payback 5 >7 years 36.6 Net Zero (Energy/Resources) The true goal, or even better the 4 Living Building Challenge 41
  42. 42. Deep Retrofits = Value Beyond Cost Savings Hard Internal • Expense Savings "Not everything that  • Reversion counts can be  counts can be counted, and not  Soft Internal everything that can everything that can  • Productivity be counted counts." • Employee Attraction p y Soft External • Reputation • Corporate Mandate 42
  43. 43. Building/Resource Management System isvital• A monitoring system is an investment not a cost investment,• Payback on reliability, visibility, lower risk + record keeping• Monitors the Resource Quintet – Energy, Water, Waste, Carbon, IEQ (Indoor Environmental Quality) 43
  44. 44. Operating data + Analysis = Reports“How much money“Ho m ch mone are you losing?” o“Audit = Action” The Resource Appraisal: a new type of due diligence report is needed 44
  45. 45. FINANCE CONCLUSIONSFinance Conclusions • A monitoring system is an investment, not a cost i t t t t • Integration: transparency, data over time, time manage risk, behavioral risk economics • Public/private credit enhancement, enhancement incentives • Value beyond cost savings: risk and reputation • Need credible due diligence reporting by experts, just like other risks have been assessed in the past… The Resource Appraisal 45
  46. 46. 1. MODEL 2. MEASURE 3. MANAGESection IIITECHNOLOGYAniruddha DeodharSustainability Program Manager y g gAutodesk 46
  47. 47. 1. MODEL 47
  48. 48. Building Information Modeling EnablesSustainable Building Operations MANAGEIntelligentmodel-basedprocess PLAN BUILD DESIGN 48
  49. 49. BIM Guides Evaluation Of EnergyConservation Measures (ECMs) Plant Upgrades? Lighting Upgrades? Building Envelope? Renewables? Model courtesy of DesignGroup and the National Audubon Society
  50. 50. Rapid Energy Modeling Streamlines EnergyAssessments Of Existing Buildings Satellite  Detailed  Energy  Images Model Analysis Photos Aerial  Aerial Conceptual  Images ECM  Model Prioritization  Laser  &  Optimization Survey capture model analyze
  51. 51. Conceptual Energy Analyses Allow EarlyStage Environmental Assessments
  52. 52. 2. MEASURE 52
  53. 53. International Performance M&V ProtocolEndorses Calibrated Simulation Chart from International Performance Measurement & Verification Protocol, Concepts and Options Determining Energy and Water Savings Volume 1, Efficiency Value Organization, Sep 2010 53
  54. 54. Modeling And Measuring Optimize ECMs Net Zero Energy gycalibration design alternatives Plant Upgrades y what-if analyses Renewables R bl ECM 2 financial metrics ECM 1 lifecycle cost analyses 54
  55. 55. Better Instrumentation Increases DataTransparencyBuilding Control System Sub-meters Sensors S Building Floor Cubicle
  56. 56. 3. MANAGE 56
  57. 57. Understanding Building Energy Management Services Technologies Control Visualization Hardware Analytics Active Systems
  58. 58. Innovative Hardware Technologies ThatDeliver High Return On Investment Direct Digital Controls; Wireless, Smart  Thermostats; Pulse, Real‐time Smart Meters 58 Occupancy; Motion; Daylight; CO2 Sensors Elevator Upgrades; Data Center Efficiency Efficient Lighting, Daylight Harvesting Variable Frequency Drives; Economy cycles Variable Frequency Drives; Economy cycles High SEER RTUs; Turbocor Compressors
  59. 59. Control Layer Helps Monitor And ManageHardware Smart Wireless Controls Demand Side Management Control Motion, Occupancy and Lighting  Controls Security and Access Control 59
  60. 60. Advanced Analytics Aid Decision Making Statistical Analysis y • Benchmarking • Input Inference Empirical Analysis • Historical Information • Advanced Data Mining Predictive Analysis • Calibrated Simulation • Rules Engines • NNeural Networks lN kBuilt Upon Billions Of Time Series Control Data Points 60
  61. 61. Visualization Technologies EnhancesCommunication And Visibility Building Performance Dashboard 3D, Real time, BIM based Visualization 3D, Real‐time, BIM‐based Visualization Portfolio Analysis and Benchmarking Building Performance Labeling B ildi P f L b li
  62. 62. Active Systems & Services Deliver End to End-to-End Solutions for Sustainable Buildings Demand Response Building Automation Energy Services Integrated Building Management (Energy,  Facilities, Operations, Asset, Maintenance) , p , , ) Lighting, HVAC Retrofits Lighting HVAC Retrofits
  63. 63. Bringing It All Together 3 1 MODEL MANAGE verify optimize 2 MEASURE 63
  64. 64. Real-time, BIM-basedReal time BIM based Energy PerformanceDashboard 64
  65. 65. Alternate Incentive And Contract StructuresNeeded For Successful Retrofits Owner BIM Digital Modeling  Based Web Collaboration and Collaboration Architect/ User Contractor Engineer E E S S F S Lessons from Integrated Project Delivery 65
  66. 66. Some Of The Standards AcceleratingRetrofitsPhase Entity Name GoalModel ASTM BEPA Data CollectionModel RESNET COMNET Energy Assessment Software ComplianceModel ASHRAE 90.1 Building Energy StandardModel Open Source gbXML BIM Based Energy AnalysisMeasure ASHRAE BACNet BEMS ControlMeasure Open source Project Haystack Taxonomy For Building Equipment & PointsMeasure ASHRAE SPC205 HVAC Equipment PerformanceManage ASHRAE SPC201 Smart Grid Information Model gManage ISO ISO 5001 Energy Management Systems gy g yManage Various Building Energy Asset and Operational Ratings Labeling 66
  67. 67. Technology Conclusions Tech. Value Benefits To Benefits To Proposition Finance Operations Data • ↓Risks • ↑ PerformanceTransparency • Data for Visibility Appraisal • Aid M&V Infinite • Key Metrics • ↑ Data G th i D t Gathering Computing • Proof to ↑ Value • Optimize ↑ROI ECMsConvergence • Manage Risks • ↑ Visibility • Communicate • Improves O+M Value
  68. 68. Retrofit TriangleConclusions 68
  69. 69. Operations Conclusions • Technology aids in g gy gathering q g quality y data, which enables clear analysis and decision-making • Robust performance data can help get access to capital, whether internal or 3rd party • Sharing data post retrofit helps support hard and soft value creation, and higher property values • Ongoing M&V tools enable continuous building operations improvement Investigate, Implement, Improve
  70. 70. FINANCE CONCLUSIONSFinance Conclusions • Integration: transparency, data over time, manage risk, behavioral economics • Public/private credit enhancement, incentives can defray costs • Value beyond cost savings: risk and reputation • Need credible due diligence reporting by experts, just like other risks have been assessed in the past The Resource past… Appraisal Assess, Access Capital, Appraise 70
  71. 71. FINANCE CONCLUSIONSTechnology Conclusions • Technology can bridge the gap between finance and operations • Data Transparency helps to quantify, reduce, reduce and manage risk • Modeling through BIM allows for rigorous analysis of potential combinations of ECMs • Performance visibility leads to behavior change and opportunities for continuous improvement • Performance measurement provides data for Resource Appraisal, and supports property valuation Model, Measure, Manage 71
  72. 72. Key Take aways Take-aways• Monitoring system is an investment, not a cost• “D t f ” = nothing h “Data fog” thi happens• Make the numbers mean something to the intended audience• Technology allows for quantification and management of risk at each project stage• Ti operational d t t k value d i Tie ti l data to key l drivers… rents and occupancy t d• Implementing efficiency retrofit projects translates to investment value with social and environmental benefits
  73. 73. QUESTIONS 73
  74. 74. END! -- Thank You THANK YOU! 74
  75. 75. Section IVPANELIST BIOS 75
  76. 76. David HodginsIn hiI his role with th CCI EEBRP, D id consults t commercial portfolio l ith the EEBRP David lt to i l tf liowners undertaking resource efficiency projects, and works with Cities todevelop programs to facilitate and incentivize such projects. David hasconsulted on the development of over 30mm square feet of resource p qefficiency projects, and is currently consulting with several large US citiesto develop and implement financing programs to accelerate the commercialenergy efficiency market. David’s areas of expertise include resourceefficiency retrofit finance performance contracting portfolio strategy and finance, contracting, strategy,environmental policy.Commercial Sector Project Development ManagerClinton Climate InitiativeBuilding Energy Efficiency Retrofit Program624 S Dunsmuir Ave #102Los Angeles , CA 90036Office: (857) 277 – 4291dhodgins@clintonfoundation.orgdh d i @ li t f d ti 76
  77. 77. Daniele Horton, LEED AP + O&M HortonDaniele Horton has over 15 years of industry experience. She is the Sustainability Managerfor Thomas Properties Group, where she administers the sustainability p p p, y performance of thereal estate portfolio nationwide spanning entitlement, design, construction and operations.She runs the LEED EB O&M Certification program for the firm’s nationwide portfolio of 33office buildings and has managed the LEED Certification of more than 13Million sf to date inhouse. The company has been recognized by several institutions for their leadership in p y g y psustainability including the NAREIT Leader in the Light Gold Award, Energy Star LeaderAward and has most recently been ranked as the highest environmental performer amongpublic funds in North America by the Global Real Estate Sustainability Benchmark.A LEED AP since 2003, with a Professional Certification in Construction Management and aCalifornia Real Estate License, she sits on the California Sustainability Alliance GreenBuildings Committee, the BOMA LA Sustainability Committee, the USGBC-LA Board ofDirectors and founded and Chairs the first Existing Buildings Committee in the country country.Previously, Ms. Aquino worked as an architect and planner in Brazil and the US. She earnedher Masters in Sustainable Development from Harvard University and her Bachelors inArchitecture & Urban Planning from Catholic University of Goias in Brazil.Sustainability ManagerThomas Properties Group515 South Flower Street, 6th FloorLos Angeles, CA 90071 AngelesOffice: 2132332530dhorton@tpgre.com 77
  78. 78. Aniruddha DeodharAniruddha Deodhar is Sustainability Program Manager at Autodesk, wherehe is responsible for end to end energy solutions. He recently led one of end-to-end solutionsAutodesk’s Sustainable Buildings Living Labs strategies - rapid energymodeling, that make attaining green energy retrofits in commercialbuildings quicker and more cost effective. He also co-developed C-FACT, a co developed C FACT,novel, business friendly approach to corporate greenhouse gas reductiontargets.Aniruddha brings more than a decade’s experience in high technology in decade sAsia, Europe and North America. Aniruddha received his M.B.A withDistinction from the Kellogg School of Management and B.A.Sc. ComputerEngineering with Honors, from Nanyang Technological University, g g , y g g y,Singapore.Sustainability Program ManagerAutodesk1 Market Street, Suite 500,San Francisco CA 94105Office. 415-356-3242aniruddha.deodhar@autodesk.com 78
  79. 79. James FinlayIn addition to managing and reviewing appraisals and a wide variety of commercialproperty types, he is also th primary appraisal manager f LEED d i t t h i l the i i l for designed and d dhigh performance real estate collateral. These valuations can also include solarphotovoltaic arrays and other types of on-site distributed power systems. Sinceearly 2006 h h b l he has been the appraisal/valuation representative of the b k’ h i l/ l i i f h bank’sEnvironmental Initiative Team. To date Wells Fargo has extended over $3.25 billionto high performance / “green” real estate. Prior to being an appraiser he was acommercial leasing and sales agent based in Santa Monica for a total more than 20years in commercial real estate. He currently chairs the USGBC LA Chapter’sCommercial Real Estate & Finance subcommittee and holds a B.A in MechanicalEngineering and Economics at the University of Kentucky, he is a General CertifiedAppraiser, and has a CA Real Estate Sales license.VP, S i Commercial AVP Senior C i l Appraisal M i l ManagerWells Fargo707 Wilshire Blvd, 11th FloorLos Angeles CA 90017Office: 310-821-8111James.F.Finlay@WellsFargo.com 79
  80. 80. END! -- Thank You

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