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Jul 21, 2011

Chicago can seize opportunity for deep energy retrofits

 

Chicago Mayor Rahm Emanuel recently announced a program to make the city’s buildings more energy-efficient. Now that he’s taken a bold step to save taxpayer dollars and create hundreds of jobs by shaving the energy consumption of City Hall, the Harold Washington Library and other government buildings, what’s next?

Emanuel plans to issue a request for proposals from energy service companies (ESCOs), that—upon being selected—will analyze each of the nearly 100 buildings for energy saving opportunities.

This program is a shining example of how local initiatives can help grow the U.S. retrofit industry, which is key to reducing fossil fuel consumption in buildings (which produce over a third of carbon emissions and consume 40 percent of the fossil fuels), when climate scientists and others have called for an 80 percent reduction in global carbon emissions by 2050.

Moreover, promoting a U.S. retrofit industry that uses whole-systems approaches for cost-effective deep energy savings in buildings at a broad scale will advance the U.S. in the so-called clean energy race.

By retrofitting more than 6.5 million square feet of space, the Chicago program certainly has the breadth to accrue significant energy savings. But, does it have enough depth to capture the full opportunity, providing taxpayers most bang for their buck?

Using deep energy retrofits vs. conventional retrofits

Most retrofit projects target 15 to 20 percent savings for a 10 to 15 percent return on investment, so it’s reasonable to expect Chicago to aim for similar results. However, a report by BetterBricks shows that 50 recent existing building retrofits have achieved 30 to 80 percent savings with a similar return on investment (half of the buildings have measured savings, the other half’s savings are estimated).

How can these buildings achieve factor three, four or even five energy savings over what is commonly achieved for no added cost? The answer is a commercial-building retrofit approach that Rocky Mountain Institute (RMI), a non-profit think-and-do tank, has defined a “deep energy retrofit.”

Deep energy retrofits improve the economics of efficiency and achieve bigger energy savings at similar cost, driving much larger savings than conventional, shallow retrofits. Using a whole-systems approach, deep retrofit practitioners bundle efficiency measures together to form one integrated design to be implemented over perhaps several years. This approach requires greater upfront investment in design and analysis, but always delivers much greater energy savings and other benefits too.

Deep energy retrofits, when executed properly, do the following in comparison to conventional retrofits:

Improve the economics of efficiency
Bundling efficiency measures together often enables synergies between measures that reduce their capital cost (see, e.g., the $17m saved in the Empire State Building project by Johnson Controls Inc., Jones Lang LaSalle, Clinton Climate Initiative and RMI). In addition, as part of the careful planning and analysis process, measures can be coordinated with end-of life equipment/component replacements and tenant fit-outs to further reduce cost—not to mention inconvenience.

Fundamentally enhance building value
Deep energy retrofits can create several different forms of value through newer equipment/components, creating a more pleasant and healthy space that requires very little energy cost. Depending on the building owners and their organizational or business strategy, the retrofit can be designed to increase net operating income, improve public perception or meet other objectives.

Manage risk
Deep energy retrofits require that an integrated team understands how a building works as a system and, as a result, enables retrofit practitioners to explain to owners all of the uncertainty with implementation and subsequent building performance—effectively managing owner’s risk. The deep energy savings also insulate the occupant or owner from increasing energy prices.

Achieving deep energy savings across a portfolio

It is common for municipalities like Chicago to issue a request for proposals to retrofit each building. However, an approach that focuses on individual buildings would fail to capitalize on the program’s biggest asset: scale.

A system-wide approach to retrofitting a large portfolio like Chicago’s leverages scale to cost-effectively save more energy than individual-building approaches. Here are a few of the specific opportunities:

1.Quickly finding buildings within the portfolio that are ripe for a deep energy retrofit using RMI’s right-timing indicators

2. Minimizing soft and hard costs for deep energy savings across the portfolio through:
    a. Repurposing deep retrofit measures in similar climate zones and building types  
    b. Streamlining measurement and verification by using the same plans, vendors, service providers
    c. Purchasing materials in bulk

3.    Packaging efficiency investments together to obtain financing that is more cost effective

Finding the Full Opportunity

Now you know why deep energy retrofits are important and advantageous, but there are a number of barriers to overcome. Fortunately more and more resources for deep energy retrofits are emerging.

To help jumpstart deep energy retrofits in a city like Chicago, both property managers and retrofit practitioners need to fully understand their value, ideally through verified case studies. They also need some level of familiarity with the deep energy retrofit process and a way to obtain financing.

Perhaps the most exciting initiatives and programs to meet these needs are the New Buildings Institute Getting to 50, BetterBricks Existing Building Renewal Program, the DOE Commercial Building Alliances and Partnerships, and Rocky Mountain Institute’s RetroFit Initiative

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