Lessons Learned from 100 Years of Building Innovations - Part 2: Opportunities Abound Today in Existing Buildings

In the last post we talked about how modern technologies and building practices are boosting building performance.
But with construction starts remaining low, the real opportunity to unlock energy savings potential lies within the current building inventory. In this post we’re expanding on the energy saving opportunities with existing buildings.

For the foreseeable future, the greatest energy, operating and service performance-improvement opportunities can be found in the world’s inventory of existing buildings. These buildings represent an attractive target for efficiency improvements because they account for about one-third of the electricity consumed, according to the U.S. Environmental Protection Agency (EPA) and Energy Efficient Buildings Private-Public Partnership, and generate about 18 to 20 percent of greenhouse gas emissions.

Energy retrofitting of European buildings would yield an estimated 20 to 50 percent improvement in energy consumption, reduce greenhouse gas emissions by more than 12 percent and create more than 3 million jobs, according to the European Buildings under a Microscope report, prepared by the Buildings Performance Institute of Europe.

This is a watershed moment in the evolution of the high performance building movement as technologies and practices mature and the body of evidence supporting adoption of these principles continues to grow.

So what factors are driving the adoption of energy conservation measures (ECMs) by current building owners? Here’s a brief list:

Continuing improvements in the economy will likely cause organizations to resume historic levels of capital investment. This includes spending on new construction, building additions and HVAC system retrofits, provided that building owners can achieve an acceptable rate of return on their investment. 

The expanded capabilities of building-modeling software make it easier to analyze and predict the long-term impact of choosing high performance building alternatives during the design and construction phases. Meanwhile, the “green premium” is shrinking; the USGBC estimates that the incremental cost of choosing high performance building features ranges from 0 to 6.5 percent. Trane has found that the cost of implementing energy conservation measures is recouped many times over a building’s long occupied life. For example, replacing outdated lighting fixtures, lamps and controls offers one of the best rates of return on investment, often paying for itself in three years or less. Rapid improvements in LED lighting technologies promise to extend the opportunity for improvements.

While energy prices have not been as volatile at the electric meter as at the gasoline pump, commercial and industrial utility rates have grown at a compounded rate of about 3 percent per year over the last 15 years, according to the EIA. Meanwhile, the Department of Energy (DOE) reports that overall demand for electricity is on the rise, with the commercial sector as a whole consuming 72 percent more power in 2010 than it did in 1980. Technology advances enable organizations to mitigate the impact of rising energy costs and increased consumption.

Evidence continues to grow that better-performing buildings yield better-performing organizations. For example, research by Michigan State University shows that workgroups moving into Leadership in Energy and Environmental Design (LEED)-certified buildings achieve higher levels of productivity. A CoStar Group study found that commercial buildings with Energy Star or LEED credentials commanded premium rents, enjoyed higher occupancy rates and sold for higher prices on the open market. A study by the Building Commission of Victoria, Australia, found that worker productivity can be enhanced by about 30 percent with an optimal indoor environment.

Organizations of all kinds are under extreme pressure to do more with less – less budget, fewer resources and a smaller staff. Building automation systems, which are key enablers of optimal building performance, automatically perform tasks that used to require human intervention with the intelligence to optimize results. Wireless communications technology, applied in these systems with open communications standards, will prove to be a breakthrough in improving controls and energy optimization in the commercial existing building market.

Sensors embedded in mechanical systems will provide critical data used by intelligent service programs to analyze, predict problems and take corrective actions with building HVAC equipment which leads to improve reliability, extend equipment life and efficient operation.

Environmental performance goes hand-in-hand with energy efficiency. Exact rules, reporting requirements and milestones are up in the air in many jurisdictions. However it is a sure bet that organizations of all types will be compelled to comply not just with more stringent national, state and local regulations but also with higher expectations from customers, shareowners, employees and the community.

In the last post in this series, we’ll talk about how better-performing buildings are on the horizon and analyze why there’s no sense waiting for the “next big thing” before jumping in to energy savings opportunities.