PA/NJ codes and building performance policy presentation March 2013
1. Codes & Disclosure Mandates:
The key to market transformation?
PA/NJ Sustainability Symposium
March 12, 2013
Cliff Majersik
Executive Director
Institute for Market Transformation
cliff@imt.org
Twitter: @IMTCliff
2. Institute for Market
Transformation
Washington, DC
Non-profit national best practices center for
design, adoption, and implementation of
building energy performance policies
Leader on building energy code
development, enforcement and compliance
Policy advisor to federal, state and local
governments and to industry groups
U.S. hub for the Global Buildings
Performance Network,
DATA Alliance, a partnership with large
building owners
3. Building Sector Greenhouse Gas Emissions
Percentage of Total Carbon Emissions
from Building Sector
75 74
70
65
62
51
38
US Chicago Dallas Minneapolis New York City Philadelphia Washington, DC
Energy use in buildings costs Americans roughly $500 Billion annually
And accounts for almost 10% of global carbon emissions
4. Link between Codes and Energy Performance Policy
Energy Codes
Construction Operation Renovation Operation
time
Energy Performance Policy
5. Energy Codes and the Potential
Energy codes establish the energy performance
requirements for new and renovated buildings.
The 2012 IECC requires
buildings to be 30% more
energy efficient than the
2006 IECC.
Source: Misuriello, H., S. Kwatra, et al. (2012). Building Energy Code Advancement through Utility Support and Engagement. Washington, DC, American Council for an Energy-Efficient Economy.
6.
7. Compliance is key
• Compliance with energy codes
is below 50% in many places
• Compliance is a low-cost
solution with an incredible ROI
$1 invested in compliance =
$6 in energy savings
8. Rental Premiums for Green Commercial
Buildings in the US
Jackson, 2009 Pivo & Fisher, 2010 Wiley et Fuerst & Eicholtz, 2010
al., 2010 McAllister, 2011
9. 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 20% Eicholtz et al 2010*
PREMIUM
15%
10%
5%
0%
RENTAL PRICE SALE PRICE OCCUPANCY RATE
10. Jones Lang LaSalle Research
Q4 2011 | Green Gauge
Philadelphia MSA Non-Green v. Green Office Buildings
Previous 12-month review Non-Green Green
Total S.F.
–
85,961,173 s.f. Projected: - 27,839,009 s.f. Projected:
Overall vacancy
16.1% Projected: 12.0% Projected:
YTD net absorption
674,123 s.f. Projected: 361,227 s.f. Projected:
Overall vacancy for
green office buildings is
Under construction or renovation
0 s.f. Projected: 499,000 s.f. Projected:
4.1% less
Average rent
than non-green
$22.67 p.s.f Projected: - $26.45 p.s.f. Projected:
buildings.
n Non-Green buildings = 909 properties
n Green buildings = 101 properties Source: Jones Lang LaSalle
10
11. Commercial Building Policy Landscape
WASHINGTON STATE [2009]
SEATTLE
[2010]
BOSTON and CAMBRIDGE
[policy interest]
MINNEAPOLIS [2013]
NEW YORK CITY [2009]
CHICAGO
PHILADELPHIA [2012]
[policy interest]
SAN FRANCISCO [2011] BOULDER WASHINGTON, DC [2008]
[policy interest]
CALIFORNIA [2007]
AUSTIN [2008]
Red Text: City adopted policy
Black Text: City policy interest or consideration
State adopted policy
Previous or current state legislative proposal
12. Covered Properties
New York City San Francisco
Buildings 50k SF+ Buildings 10k SF+
~16,000 buildings, 2.5 billion SF ~2,700 buildings, 205 million SF
13. BUILDING AREA (IN SQUARE FEET) COVERED ANNUALLY
Existing policies will Philadelphia
244.5 million SF
impact more than Seattle
45,000
304 million SF
Washington State
properties 247 million SF
Austin
totaling more than 113 million SF
4.3 billion SF of California
floor space in major 347 billion SF
real estate markets Minneapolis
over the next few 110 million SF
years Washington, DC
294 million SF
New York City
2.5 billion SF
San Francisco
205 million SF
Source: IMT (February 2013)
14. NYC’s 2012 Benchmarking Results: Variations in Energy Use
• Older buildings tend to have lower Energy Use Intensities (EUI) and higher ENERGY STAR
scores than newer buildings.
• Energy use varies greatly between property types, uses, and locations.
• Some properties using 3-7x more energy than other buildings with similar uses.
Source: New York City Local Law 84 Benchmarking Report (August 2012)
15. NYC’s 2012 Benchmarking Results
...if all buildings
Multifamily Office
operated at least
the…
50th percentile - 18%
reduction in energy
use, 20% reduction in
GHG emissions
75th percentile - 31%
reduction in energy
use, 33% reduction in
GHG emissions
Source: New York City Local Law 84 Benchmarking Report (August 2012)
16. Building Energy Performance Policy
Building Energy
Energy Code
Operator Efficiency
Compliance
Certification Upgrades
Municipal
Lighting Retro-
Building
Upgrades commissioning
Efficiency
Energy Audits Sub-metering Green Leasing
Benchmarking and Disclosure
18. International Policy Timeline
2004: Norway,
part of the European
Economic Area, formally
agrees to implement the 2010: EPBD Recast
2007: Brazil adopts voluntary The EPBD is recast to
EPBD and building building rating regulations that
certification requirements strengthen the
become mandatory in 2012 energy performance
1997: Denmark requires energy requirements for all
certification for homes and buildings EU Member States
1999: Australian Capital Territory
requires energy certification for homes
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2002: The European
Parliament adopts the 2008: China adopts a mandatory
Energy Performance of energy rating program for
Buildings Directive (EPBD), government buildings.
requiring all EU Member 2008: Turkey
States to establish adopts a
mandatory energy mandatory 2010: Australia
certification schemes for certification enacts mandatory
homes and buildings scheme energy rating for
commercial
structures.
19. If every state
COMMERCIAL COMPLIANCE E Evaluations
Select Commercial ComplianceVALUATIONS
adopted & fully
complied with the State Study Compliance Rate
2012 IECC, ID
NY
Ecotope. 2008.
VEIC. 2012.
10-20%
36%
businesses and Under 40%
consumers would ME ERS. 2011.
15% met less than 25% of the code
20% fell within 25-50% range;
20% fell within 50-75% range
save about $40
0-50%
billion annually CA HMG. 2009.
Ducts in existing buildings: 0%
Duct testing: 0%
on energy costs by Window replacement: 32%
Cool roofs: 50%
2030. GA Towson, Bill. 2011. 80%
ID, MT, OR,
Ecotope. 2008. 80-90%
WA
(real 2008 dollars)
Editor's Notes
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.
Significant progress has been made over time to reduce the maximum allowable energy use in buildings. National model codes (International Energy Conservation Code 2012 / ASHRAE 90.1-2007) are adopted at the state/local level. During this process, certain sections of the code can be omitted. At a national level, focusing on electric savings alone, a long-term look at the potential energy savings from building energy codes finds that electricity use can be reduced by 123 million megawatt-hours, which is 30 percent of the projected growth in electricity consumption, over the next 15 years, IF there is full compliance with the residential and commercial building energy codes. Source: April 2011 whitepaper by the Institute for Electric Efficiency.From a program cost standpoint, code compliance activities impose a low cost on ratepayers as the incremental costs of advanced efficiency construction features are borne principally by the builder or owner. A recent study by the Institute for Market Transformation (IMT), in consultation with more than 30 other energy efficiency organizations, found that the achievement of 90% nationwide compliance with building energy codes could save an annual 200 tBtu by 2020 at a cost of only $1 for every $6 in energy savings (IMT 2010). able energy use in buildings.
Stronger energy codes have transformed construction immensely over the past 30 years. (Point to insulation R values; magnify if possible.)
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.
More than 3x the floor area of every Walmart, Target, Home Depot, Barnes & Noble and Costco store in America
Newer buildings tend to use more energy per sqft than older ones, but this does not necessarily reflect energy efficiency per unit of economic activity.Energy use intensity:large office buildings > small office buildingslarge multifamily buildings < small multifamily buildingsBenchmarking data for commercial buildings published in Sept. 2012.Approximately 75% overall compliance, 10,000+ buildings reported.
Methodology for calculation: the “absolute” method, analyzes how much energy would be saved if all buildings reached the current average level, and if all buildings reached the 75th percentile. The multifamily and office sectors are broken into ten percentile ranges (deciles), with the vertical axis representing median Source EUI for each decile and the horizontal axis representing the gross square footage of each decile. The area of each column is the total energy used in each decile. For each sector, the top dashed line represents the median energy use, and the lower dashed line represents the 75th percentile. This method shows that if all buildings became at least as efficient as the current average, energy consumption would be reduced by 18%; if all buildings reach the 75th percentile, energy consumption would be reduced by 31%.
Given that codes touches buildings at only a few points in time, government agencies are assessing how they can reduce energy consumption and green house gas emissions through other methods. They are asking themselves questions like: How can markets work more effectively?How can demand for energy efficiency be increased?How can policy help reduce energy costs for businesses and consumers and create jobs?How can greenhouse gas reductions be achieved in existing buildings?The answer that is emerging is building energy performance policy. The most frequently discussed building energy performance policy is benchmarking and disclosure, but this category includes a number of related mandates and supporting programs. Think NYC’s Greener Greater Buildings Plan.
Even though stricter energy codes are being passed, compliance rates for the energy section of codes is low, so the potential savings aren’t being realized. Compliance is the responsibility of design professionals and builders with the final authority of enforcement falling on the local code officials. Compliance rates for energy codes remain low: Building departments understaffed and underfundedNeeds depend on volatile construction volumes; difficult to rebuild capacity after construction rebounds.Uneven enforcement by code officialsMain responsibility (and priority!) is life-safety codes Code officials inadequately trainedIncreasing complexity of energy codesBut, even if codes were implemented perfectly, they would still only touch the building lifecycle during a few points: initial construction, and renovation. As cities and states increasingly grapple with how to reduce their energy use and carbon footprint, they have moved to regulating buildings throughout their lifecycle through Energy Performance Policy, which applies to the operational phase of buildings.