Can We Achieve 30% or Better? Yes We Can (and Have)

By John Jennings, BetterBricks Market Manager, New Construction

The recent press release by NAIOP (now known as the Commercial Real Estate Development Association) attempts to throw cold water on the growing momentum for sustainable energy efficient buildings. They assert that increases of energy efficiency of 30 percent or more relative to ASHRAE 90.1-2004 aren’t economically feasible.

Those who have been designing, building and promoting high performance buildings for a long time are finding the study very difficult to swallow. But let’s all use it as a learning opportunity. Energy efficiency advocates now can see where the commercial real estate mainstream is in their thinking and efficiency experts can take this opportunity to inform NAIOP and others that these buildings are being achieved today - and they are financially feasible.

First of all, just in the Northwest - where electricity rates are lower than those used in the study - there are a lot of buildings that have achieved significant levels of energy efficiency. These buildings range from high rise office buildings, to schools, to university buildings and even healthcare facilities. In a recent meeting of the BetterBricks Integrated Design Lab Network, lab directors presented a list of over 50 buildings that they have been involved with that have achieved levels better than 30 percent over Washington or Oregon code (which are slightly better than the corresponding levels of ASHRAE 90.1).

A recent study of 121 LEED buildings by the New Building Institute (NBI), found that on average these buildings were achieving savings of 28 percent with one-quarter above 50 percent and some as high as 75 percent. NBI’s Getting to Fifty program also contains a register of buildings achieving close to, or better than, 50 percent savings. For anyone needing more evidence, there is the USDOE High Performance Building Database and the magazine High Perfomance Buildings, that presents detailed case studies every month.

Several Northwest buildings further illustrate what is achievable. These include the Idaho Central Credit Union office in Chubbuck, Idaho; Banner Bank in Boise, Idaho; OHSU Center for Health and Healing in Portland, Oregon. The Idaho Central Credit Union office is a typical small city bank branch with 68,000 square feet built in 2007. It achieved energy savings of 35 percent. The 180,000 square foot Banner Bank building built in 2006 appears on the outside to be a fairly conventional mid-height office building. Yet it has received LEED Platinum certification and measured energy savings have been around 48 percent. According to the developer, Gary Christiansen, these savings were achieved at no incremental cost.

The OHSU project is much more complex. It is essentially a 15-story, 401,000 square foot “bedless hospital” with surgery suites, labs, diagnostic facilities, pharmacy, doctors offices, pool and spa. A recent post occupancy evaluation has found the building savings to be close to 45 percent over ASHRAE 90.1-2004, with an incremental cost for energy efficiency measures of less than 1 percent of total cost.

What bothers me the most though is the approach NAIOP took to the analysis and the way the results were disseminated. Rather than research the state of the market, they base their claims on energy simulation modeling of one existing building design. As a result, they lock out many of the key elements designers can manipulate to improve performance. No consideration was given to building orientation, massing, daylighting, shading, natural ventilation, etc.

The study simply adds a number of conventional efficiency measures to a generally inefficient base building. This obviously has limitations. It is understood by most building scientists and efficiency experts that there is an economic limit for simple additive efficiency measures. Estimates range from savings of 25 percent to 40 percent. To achieve higher levels of savings cost effectively requires an integrated design approach where cost efficiencies result from down-sizing or eliminating mechanical and electrical equipment due to synergies between systems (i.e. taking advantage of the interactive effects between heating and cooling and lighting).

The NAIOP press release discounts integrated design by saying it “was impractical in the study’s building prototype.” A number of advanced strategies were “not included in the study due to lack of modeling capability, sufficient data or project scope.” Instead, the study just increased the efficiency of the HVAC equipment for the same size load instead of a reduced load and smaller sized equipment. The study then concluded that to get to 30 percent or beyond would require adding photovoltaic (PV) panels, driving the cost sky high. They are correct that adding on-site renewable energy-based generation should come at the end, but only after all feasible efficiency is achieved, when the costs of the renewable systems can be reduced to meet the lower load. To meet the 2030 Challenge targets will require first maximizing the efficiency of the design (using climate resources, adjusting schedules and space or use programming, lowest possible loads, most efficient systems, etc.) then adding renewable energy.

Another important consideration is the method used to determine economic feasibility. While simple payback (used in the NAIOP study) is certainly one limited measure of financial performance it leaves out of the analysis the long-term financial benefit from energy savings over the building's lifetime. A better measure is life cycle cost analysis. Astute developers who deftly balance leasing terms so that tenants and building owners both benefit from these savings can increase the property’s finances and marketability. A simple payback analysis is just that – simple. It paints an incomplete picture of the project economics.

The press release uses the study findings to take a stab at policies seeking to set building energy codes to higher levels. Codes set the legal minimum and thus level the playing field. Codes do not set one method for all as stated by the press release. Instead, codes set prescriptive requirements for each climate zone and also provide an optional performance path target to allow designers to find innovative ways to meet those targets.

Ironically, in June 2008, NAIOP came out with a policy on energy efficiency that seems to contradict recent statements by its Executive Director in the press release. The policy states that NAIOP commits to:

Encourage the real estate development industry to employ every technically feasible, cost-effective, sustainable strategy available to increase energy efficiency of new and existing buildings, and to employ cleaner, low carbon energy alternatives (including on site energy), wherever possible.
Advance public policies that accelerate ongoing energy efficiency and sustainability gains; support cleaner (including on site) energy alternatives; and promote, wherever practical, less carbon intensive transportation options to and from buildings.
Engage in educational programs, seminars and conferences to help employ best practices for energy efficient development.”

There are simply too many examples of buildings achieving energy savings of 30 percent or higher – with owners and occupants readily willing to expound their benefits – for the NAIOP study to have any credence.

Now we need to begin working together to figure out how to best achieve the 2030 Challenge targets for all new construction over the next 20 years. This process is beginning with numerous “Net-Zero Building” conferences and articles. We need to broaden the dialogue to include the real estate and development community.