07 Nov 2011

Building Retrofits: Tapping The Energy-Saving Potential

No more cost-effective way to make major cuts in energy use and greenhouse gas emissions exists than retrofitting buildings. Now, from New York to Mumbai to Melbourne, a push is on to overhaul older buildings to make them more energy efficient.
By david biello

Of the hundreds of thousands of buildings in New York City, none is more iconic than the Empire State Building. Completed in 1931 as the tallest skyscraper in the world, the Art Deco edifice was meant not only to house thousands of office workers, but to serve as a dock for the coming age of dirigibles.

Now the 102-story building has a new tale to tell: efficiency. A recent $20-million retrofit — which included everything from cleaning and re-insulating more than 6,000 windows to caulking leaks in the building’s facade — reduced energy use by nearly 40 percent, according to air and energy program lawyer Katherine Kennedy of the Natural Resources Defense Council. And the Empire State Building is just the most visible example of a new trend — retrofitting old buildings to be more energy efficient. For example, billionaire businessman Richard Branson’s Carbon War Room and the Ygrene Energy Fund are leading a consortium that will invest as much as $650 million in similar retrofits in Miami and Sacramento.

Globally, businesses, national and local governments, and property owners have begun to retrofit millions of older buildings in a bid to cut down on energy use and reduce greenhouse gas emissions. These retrofits are the most cost-efficient way to combat climate change and save on rising power bills, according to analysts ranging from the McKinsey Institute to the
‘If it will pay out and save energy, building owners will do it,’ says one expert.
International Energy Agency. Melbourne, Australia, for example, plans to reduce energy consumption in 1,200 of its office buildings by the end of the decade. In the U.S., the Environmental Protection Agency is running a “Battle of the Buildings” in which 245 facilities compete to save the most on their utility bills through energy efficiency improvements. In recent years, five major international banks have joined four multinational energy services companies and invested $5 billion in retrofitting old buildings in 16 of the world’s biggest cities, from Mexico City to Mumbai.

“It’s effectively job creation, resilience to future climate change and keeping operating costs low, all at once,” says Karin Giefer, an associate and sustainability consultant at the engineering firm, Arup, who just wrote a report on such retrofits for the World Economic Forum. The bottom line, says Giefer, is that “if it will pay out and save energy, [building owners] will do it.”

Buildings currently account for approximately 40 percent of the world’s energy use. Roughly half of the buildings standing today will still be in use in 2050 — and those buildings could generally improve energy efficiency by at least 20 percent through simple fixes like better insulation. “The effort to reduce greenhouse gas emissions and adapt to climate change will be won or lost in cities,” New York Mayor Michael Bloomberg told a recent conclave of mayors at C40, an international planning group for 59 major cities engaged in efforts to combat climate change. “As the primary centers of economic activity globally, cities are significant consumers of energy and emit nearly three-quarters of the world’s carbon emissions.”

In June, C40 partnered with the World Bank to help secure funding for retrofitting projects. The first stage of the partnership will ensure that cities measure and report greenhouse gas emissions and reductions in broadly similar ways, allowing for comparison — and verification. In exchange, the World Bank will allow the cities — as yet unselected — to access its climate-related funds to finance such projects.

Similarly, the Carbon War Room, which Branson helped create to harness entrepreneurial thinking to fight climate change, and green energy financiers Ygrene will use a program known as PACE — property-assessed clean energy — to help fund commercial building retrofits worldwide. The program allows property owners to take out loans provided by the
New, inexpensive sensors provide real-time data to building managers that alerts them to anomalies.
consortium’s partners, including Lockheed Martin and Barclays Capital, to pay for energy efficiency improvements and then pay those loans back through a surcharge added to a building’s property taxes. A similar scheme had been employed in California and 26 other states starting in 2008 to enable homeowners to install solar power systems. But it foundered in recent years when major mortgage providers, including governmental entities such as Fannie Mae and Freddie Mac, objected to any additional liens on mortgaged properties.

“The PACE Commercial Consortium is the missing piece in the puzzle for cities looking to implement green plans,” Branson, head of the Virgin Group of companies, said in a statement in September announcing the funding. “I’m thrilled by the news of this ground-breaking mechanism, and believe it will unlock a trillion dollar market for green retrofits.”

Retrofits include everything from the prosaic — better windows and more insulation — to the advanced, such as systems that make ice at night when electricity is cheap and use it to cool a large building by day. Companies such as IBM offer software and sensor packages that help manage and improve a given building’s energy performance. For example, new, inexpensive sensors are placed on air ducts, boilers, chillers, computer rooms, lights, thermostats, water pipes, and other critical infrastructure. They then provide real-time data to building managers that alerts them to anomalies, such as defective equipment.

“It’s using information technology to make better decisions,” says Sharon Nunes, IBM vice president for smarter cities, noting that the software can do something as basic as pointing out when a building is running its heating and cooling systems at the same time.

Such efforts are not confined to major metropolitan areas. IBM is working with Dubuque, Iowa on energy and water efficiency measures, among other projects. “Smaller and medium-sized towns are the most innovative,” says Konrad Otto-Zimmerman, secretary general of the International Council for Local Environmental Initiatives, a municipal government group. He cited examples such as Freiburg, Germany and its bid to build passive houses that require limited heating and cooling — if any. In Cleveland, Ohio, architects and engineers are creating a new aluminum and glass façade around the old outer shell of the Celebrezze Federal Building to help improve its insulation.

Of course, such retrofits have been a good idea for a long time. The U.S. government has had a retrofit program since the 1980s, yet only 1 percent of the country’s nearly 5 million commercial buildings have been redone. “It
‘We can knock 30 percent off energy use with things like insulation and more efficient boilers,’ says one developer.
comes down to the fact that nobody trusts anybody else’s numbers,” Arup’s Giefer says of conflicts between government entities, financiers, utilities, and operations managers to get such projects done. And projects actually undertaken, which represent a small fraction of those possible, reported energy savings of closer to 12 percent than 20 percent, according to a UN Environmental Programme report. Improved technologies and growing concerns about climate change are likely to boost retrofitting efforts in the coming decades, though many hurdles remain.

In the case of New York City, while a small percentage of buildings are responsible for nearly half of all electricity demand, disconnects between those who pay the energy bills — tenants — and those who would pay for any energy efficiency improvements — owners — impede action. The city will now require buildings larger than 50,000 square feet to document their energy use, which may inspire energy efficiency upgrades.

Updating building codes will also be critical, mandating more insulation, for example, or even allowing for things like solar arrays on rooftops, currently blocked by a fire code that requires clear roof access. “We can easily knock 30 percent off our energy use with very simple things like insulation and more efficient boilers,” notes New York City developer Jonathan Rose, whose company is responsible for the Via Verde subsidized housing development in the South Bronx that incorporates a host of energy efficiency measures, including simple things like cross-ventilated apartments outfitted with ceiling fans to help keep cool.

The need to make buildings more efficient will become more pressing, especially in summer as rising temperatures spur the use of more air conditioning. On July 22, during a major heat wave, New York City broke its record for electricity demand, with the city’s more than 6 million window air conditioner units virtually all in use. “I am much more concerned about window AC units than [electric] cars,” says Colin Smart, manager for demand response at New York City utility Consolidated Edison. Window air conditioners all tend to turn on at the same time when it gets hot, while any future demands on the grid from plugged-in electric cars will likely be staggered throughout the day.


Green Roofs are Starting
To Sprout in American Cities

Green Roofs are Starting to Sprout in American Cities
Long a proven technology in Europe, green roofs are becoming increasingly common in U.S. cities, with major initiatives in Chicago, Portland, and Washington, D.C. While initially more expensive than standard coverings, green roofs offer some major environmental — and economic — benefits.
Another challenge is that buildings often have unique designs and engineering systems, making it difficult to devise programs that will work on a broad scale. “Buildings are funny things,” Arup’s Giefer says. “They’re prototypes, they’re finicky.”

Revamping human minds to incorporate simple behaviors like turning off lights when leaving a room may prove as important as any building renovations for energy. In fact, the real battle to make buildings more efficient may be won in the minds of those running the buildings, such as New York City’s legion of superintendents. In light of that, the U.S. Department of Energy graduated its first class of “Green Supers” this year. “I was under the impression that these techniques were very expensive,” Victor Nazario, superintendent of a residential building on Manhattan’s Upper East Side, said during his address to his fellow classmates at graduation, each of whom spent 40 hours studying energy efficiency, air flow leak detection, and other green building operations. “It’s just time, it’s just dedication, and just applying it.”


David Biello has been covering energy and the environment for nearly a decade, the last four years as an associate editor at Scientific American. He also hosts 60-Second Earth, a Scientific American podcast covering environmental news. In previous articles for Yale Environment 360, Biello has written about geothermal technology and solar thermal technology and has explored the progress of carbon capture and storage technology.

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Our government want everybody to increase their energy efficiency, and at the same time Freddie and Fannie, government agencies, say they do not want us to invest in increased energy efficiency.

Who is talking, and who is not listening?

Posted by Sid Abma on 10 Nov 2011

Great article David. Thanks for posting all of the links. 38% energy savings on the Empire State Building is amazing. I'm glad they did it, but the price tag seems a little high to atract those kinds of retrofits on a wide scale nationwide.

We just retrofitted a 17-floor office tower in Dallas and achieved a 20% energy cost savings, and the building will reduce it's CO2 output by 1.2 million lbs every year for the life of the system. All we did is install an advanced building energy management system consisting of cloud-based software and wireless digital thermostats. We didn't install any new insulation, windows, or HVAC units, so the retrofit was completed in under a week.

In your linked story about The Empire State Building, you mention that they expect to save $4.4 million a year in energy costs. With a $20 million price tag for the retrofit, they are looking at a 5 year payback. While the energy cost savings for our Dallas tower is 20% as opposed to The Empire State Buildings 38%, we are looking at a 1 year payback on the investment, which is much more attractive to investors.

You can see the case study here:

Posted by Mario Bravo on 18 Nov 2011

Are you suggesting that most people would expect a 100% ROI on a 20M$ investment?

Come on! This case study "may be a good example" of a building in desperate need for love. But in real life, unfortunately, not everyone has found true love. So they say.
We have to stop looking for the perfect project. Just do it!

PS: about this case it really fair to expect the same savings for the full year as in the first 4 months of troubleshooting the HVAC?

Posted by JP Beaulieu on 29 Nov 2011



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