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What's Possible

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If you've been following What's Possible for while, you've probably noticed the changes over the last few weeks. We've streamlined the appearance and organization of the blog and moved our non-blog content to a new home on the JohnsonControls.com site. We're very excited about the changes, and we think they'll help our users, customers and other interested parties find the news, information and insight they are looking for more easily.

 

The What's Possible blog will continue to be the home for interactive discussions and commentary from industry experts. In the coming weeks, we'll be having an extensive conversation around FDD, building analytics and the technologies that are shaping how smart buildings connect, and we hope you'll weigh in on the discussion.

 

Our new Industry Insights page will be the permanent home for long-form content, such as papers, articles, research reports, videos and more. You can see a snapshot of our page here, or visit www.JohnsonControls.com/IndustryInsights to explore.

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The landscape of building efficiency is changing. Facility and building managers have access to advanced systems and technology, making Information Technology (IT) team members a bigger part of the picture. Even the most basic building automation system (BAS) offers more control and customization than ever before.

 

Despite technological advancements that have made building data easier to access and analyze, evidence shows that most building owners and managers are not realizing the opportunities for cost savings and energy efficiency improvements. The building efficiency platform bridges this gap between potential and reality by collecting the wealth of data accessed through today’s sophisticated BAS, normalizing it and allowing it to be stored and pulled from the cloud via applications that deliver exactly the information and insight needed to make building—and entire enterprises—more efficient.

 

The graphic below shows how building efficiency platforms add a new layer to the traditional building automation system technology stack.

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This blog is adapted from the paper “Panoptix® Extends Building Automation System Capabilities.”

Today’s facility managers are often focused on energy efficiency initiatives to manage rising energy costs, reduce environmental impact and increase the value and attractiveness of buildings. While efficiency projects may often involve substantial capital investments, they can also generate impressive savings and compelling returns on investment, which is why energy efficiency initiatives come with high expectations. But, there is tremendous pressure to accurately measure and verify the energy savings and return on investment, even though building managers may not necessarily have the time, tools or ability to perform such verification.

The most obvious way to measure energy savings is to compare utility bills both before and after the implementation of an energy conservation measure (ECM). Utility bills, however, are just a starting point and rarely provide enough detail to fully understand the impact of the energy project.

There’s a great deal of complexity driving energy consumption in buildings. Building and facility managers need to consider a variety of factors and data points to accurately understand the impact of their energy projects, including actual data from utility meters or on-site submeters, occupancy schedules, weather conditions, and characteristics of the building that drive energy consumption. Facility managers dread the day that their CFO asks about the ROI of a seven-figure energy project, leading them to explain that it’s been a hot summer and utility bill expenses are up instead of down.

Juggling all these measurements and calculations by hand is possible, but it's time consuming and requires advanced data science or mathematical skills. With most building managers trying to do more with fewer resources, it is hard to justify investing the money and manpower simply to crunch the numbers for an energy conservation project. But with advances in building analytics software, it's getting easier for building managers to find solutions that can do the work for them —technology that pulls the data from the meters, equipment or BAS already installed in the building, the occupancy schedule, weather data and more; performs the calculations; and delivers the results in an easy-to-understand format.

With these advancements, building managers can acquire the reliable performance data they need to verify energy savings and report their results with confidence, a move that will help them win buy-in from stakeholders when it's time to make the next investment.

This blog was adapted from the paper: Increase ROI Credibility: Verify energy savings with the expert.

Poorly maintained, degraded and improperly controlled equipment wastes an estimated 10 to 30 percent of the energy used in commercial buildings1. Most building managers already know they can prevent much of this waste by detecting problems early, then prioritizing repairs, but the question is: How?

 

Traditionally, building operators and facility managers have relied on alarms generated by Building Automation Systems (BAS) to notify them of issues with equipment or systems. But building systems are evolving and with new technologies and tools like fault detection and diagnostics (FDD), building managers have a chance to look into the future and discover issues before they generate alarms.

 

To understand how, you first have to understand the difference between a fault and an alarm. An alarm is a real-time alert generated after a problem has occurred, when the BAS detects a breach of a monitored point. When operators are alerted to issues by alarms only, tenants may have already complained about discomfort as the troubled equipment slowly degraded over time. Monitoring alarms alone creates the potential for issues to go undetected for weeks or months, increasing energy consumption and operating costs. FDD, on the other hand, uses sophisticated algorithms to detect faults, or abnormalities in normal operations, that do not necessarily cross the thresholds that generate alarms.

 

Using FDD and other advanced tools helps building managers detect abnormal energy consumption and identify hidden equipment faults before they grow into larger problems. When managers are able to stop problems from happening, they have the opportunity to identify potential cost and energy savings and prioritize maintenance to make these savings a reality.

This blog was adapted from the white paper: The Future is Here - Fault Detection and Diagnostics.

[1] Granderson, J. Piette, MA, Rosenblum, B, Hu, et. al. 2011, Energy Information Handbook Applications for Energy-Efficient Building Operations, Lawrence Berkeley National Laboratory, LBNL-5272E, p. 183.

It often comes as a surprise that “plug loads” — the innumerable devices in commercial buildings that use energy, such as computers, copiers, fax machines, kitchen appliances and electric space heaters — constitute as much as 50% of an office’s electricity consumption. What’s even more surprising is that recent empirical measures like this one run contrary to most simulation models, which typically estimate plug loads as 10% to 30% of a building’s electricity use. Regardless of what the actual plug load might be in your building, even the lowest estimates underscore the important role of your building's occupants in the building's overall energy usage.

 

That’s where energy information feedback comes in. Without feedback on your individual or department-level performance, plug load consumption, among other building consumption loads, may go largely unnoticed.

 

In 2013, energy waste that’s unaccounted for is a sign of an incomplete energy strategy. But how do you begin to engage occupants about the kilowatt-hours and BTUs they are wasting? Most people don’t intuitively understand units of energy, nor have they been challenged to think about the consequences of their consumption habits, especially those habits that take place away from home.

Engaging occupants in energy management means more than just reminding them to turn off the lights — it means they need to see the impact of their actions. After a  decade of real-world deployments, we've learned several key lessons about helping occupants become active energy managers:

 

Deliver energy and water use feedback as soon as possible

The difference between a monthly electricity bill and real-time monitoring isn't just timescale: Bills go to one person, but real-time feedback reaches many people. Real-time data at the level of a building, floor or department facilitates decision making across a much larger stakeholder group. Even occupants can experiment with different ways of curtailing consumption and instantly see the results of their actions.

 

User interface design matters

Traditional tools for building managers may be appropriate for some, but they don’t grab the attention of non-technical audiences. No matter how you deliver energy information to your occupants, the system is only going to be effective if multiple people can understand it and use it with ease. Consumer electronics and today's web experience provide superb industrial design and delightful user experiences. Your user interface much offer broadness of appeal and ease of use and be in  line with modern design best practices — things that people have come to expect from software. We are all consumers, and we can't check our expectations at the door when we go back to work or we go to school.

 

Unit equivalents make energy data intuitive

Expressing building resource consumption in everyday units can make the difference between fleeting interest and meaningful, long-lasting understanding. Think of these examples: appliance usage (how many days of running my hair dryer is this equivalent to?), embodied CO2 (how many trees would have to be planted to offset these emissions?), embodied energy (how many equivalent gallons of gasoline have we been consuming?) and caloric energy (how many pints of ice cream require the same amount of energy to produce?).

 

People respond to different modes of delivery and contextualization

Even among non-technical audiences, people will respond differently to how data is presented. In one example from Oberlin College, animated “empathetic” characters help occupants develop a deeper emotional relationship with the energy data by exhibiting a variety of behaviors. The character will tell the viewer how it feels about the current level of consumption, expressing either its sadness and dissatisfaction or its encouragement and approval. When consumption is higher than normal, the character suggests ways in which consumption might be curtailed.

 

Peer pressure lights the competitive flame

Perhaps the most important feature of a monitoring system is its ability to show performance in relation to your peers while uniting the community around a common cause. In higher education, the annual Campus Conservation Nationals (CNN), the largest nationwide energy and water use reduction competition on the planet, is held on university campuses across North America. This year 300,000 students on 120 campuses reduced 2.1 gigawatt-hours of electricity use — effectively removing 187 U.S. homes from the grid for one year. Successful campaigns like CCN demonstrate that friendly competition can go a long way toward fostering sustainable behavior.

 

Behavior change and occupant engagement have officially moved into the mainstream. As more building owners and managers migrate their building automation system data to the cloud, real-time displays of energy and water use can transform that data into a single visual centerpiece that increases engagement, insight and action within your building. It also can drive the adoption of efficiency measures by helping evaluate the right technical solutions to employ in a building, such as advanced lighting controls and smart power strip monitoring.

 

And it doesn’t stop with occupants. Giving management better information about energy use leads brokers, tenants, consultants and managers to interact differently with their buildings. Likewise, occupants who are informed and empowered can provide feedback for building managers in new ways: Did you, Mr. Facility Manager, notice that our energy use was unusually high last weekend? I noticed that the third floor lights aren't turning off; could you check that out?

 

About Gavin Platt

Gavin Platt is Chief Creative Officer and co-founder at Lucid, where he is the lead designer of BuildingOS and Building Dashboard. Prior to Lucid, Gavin worked at the A.J. Lewis Center, one of the most comprehensively monitored green buildings in the U.S. Gavin holds a B.A. from Oberlin College.

 

About Lucid

Over the past nine years, our team at Lucid has been pushing the boundaries of occupant engagement and empowering occupants in thousands of buildings to reduce their consumption. Lucid’s Building Dashboard® is among the first building energy management apps launched on the Panoptix® platform. Read more about Lucid's Building Dashboard on Panoptix.

The era of big data is gaining momentum, and we’re starting to understand how applications add value across different industries. In the commercial building sector, the most promising developments involve the intersection of big data analytics with two critical disciplines: building science and software development. By tapping into deep understanding of how commercial buildings operate, advanced analytics can power insight from increasing volumes of consumption data – accelerated specifically by the advent of smart metering infrastructure. Equally important is how software presents energy insights, especially as many building operators in the field are just gaining widespread access to web-based energy portals.

 

To understand how big data analytics can impact the commercial building sector, let’s take one relevant example – identifying efficiency opportunities.

 

While tried-and-true manual methods for driving building efficiency exist, they appear more and more outdated in the era of advanced analytics. Utilities spend incredible sums of money targeting commercial customers for participation in energy efficiency programs, including numerous pre-qualification steps before they find and convert the best candidates. On-site audits are still used pervasively to uncover building-specific opportunities, making the endeavor time-consuming and costly. And the end-result is often a lengthy report that sits unused on a shelf. Although the process generally identifies the right customers and often gives them tangible insights about their buildings, precious resources can be wasted.

 

What if analytics could dramatically speed this process and yield better insight?

 

A few simple data findings based on FirstFuel Software's extended database of remote commercial building audits suggest that analytics drastically change the commercial energy landscape:

  • First, 75% of all commercial savings opportunities can be found in just 25% of buildings.* Put conversely, the majority of buildings barely contribute to reductions in energy use and cost.  This insight shouldn’t be too surprising, as we know a wide gap exists between the buildings that are run efficiently and the not-so-efficient. But now we have the data to back it up. Even if facility managers were able to drive efficiency engagement and action in every building within their purview, the data suggests they shouldn’t bother. Instead, they should put their efforts toward discovering which 25% of buildings can give the 75% of savings. The rest simply do not deliver the results to match the effort.
  • Second, the belief that the biggest buildings offer the biggest savings opportunities is a bit misguided. Up to 40% of all energy efficiency savings are hiding in mid-sized buildings – more than the 35% found in large buildings.* This finding suggests that the traditionally low levels of attention paid to mid-sized buildings (50,000 to 150,000 square feet ) should be reconsidered. They represent a significant – and significantly overlooked – opportunity in commercial efficiency.
  • Last, in another insight that questions conventional wisdom, 50% of all efficiency savings come from simple operational improvements*  –  changes that require little-to-no on-site work and often offer near-immediate payback. Given the disproportionate focus on capital-intensive retrofits in today’s commercial building sector, many of these hard-to-identify but easy-to-implement operational improvements go unnoticed and unfixed. This is partially because traditional efficiency efforts focus more on building equipment and systems, and therefore miss operational opportunities that lie hidden within the potential of schedules, weather changes and occupancy patterns.

 

These findings reveal just the tip of the iceberg. Advanced analytics can identify the 25% of low efficiency buildings, target the 40% savings from the mid-size segment and uncover the 50% operational opportunities at scale – which will arguably never be possible through traditional methods. Building operators can now be presented with actionable information and customized recommendations – not just hollow energy savings pitches – from the very first touch point. These insights can motivate them to adopt targeted efficiency improvements that deliver meaningful energy savings. This efficiency targeting and insight, without the need for upfront discussions and intrusive on-site evaluations, can be equally relevant for property and real estate managers.

 

As other industries have already experienced, big data analytics are starting to reveal what's truly possible in the world of commercial energy efficiency and management.

 

* Each quarter, FirstFuel pulls a 60 million square foot representative sample (most major building types and sizes) from its database of thousands of building audits to derive insight about the commercial energy efficiency sector.

 

 

About the Author

Erik Mazmanian is a Marketing & Strategy Manager at FirstFuel Software, where he helps drive the company’s product marketing, sales operations, and business development efforts. Prior to FirstFuel, Erik worked as a strategy consultant for The Corporate Executive Board, where he advised R&D executives on the management of technology and innovation. Erik holds a Masters of Business Administration from the Kellogg School of Management at Northwestern University and a Bachelor of Arts, with Distinction, from Trinity College (CT).

 

About FirstFuel

FirstFuel Software is the building energy analytics company that helps utilities and government agencies deliver scalable energy efficiency across their commercial building portfolios. The company’s Remote Building Analytics platform uses advanced meter data analytics to identify, enable, and track energy efficiency savings behind the meter in commercial buildings – all without onsite visits or device installations. Designed to be rapidly and cost-effectively deployed across hundreds or thousands of commercial buildings, FirstFuel changes the scale at which the sector can achieve its energy efficiency goals. Founded in 2009 and privately held, FirstFuel is headquartered in Lexington, Mass. For more, please visit www.firstfuel.com.

Regardless of building size, age, industry and location, challenges in the building management and efficiency industry have remained much the same for decades: Control costs, become more efficient and sustainable, and do more with what you already have.

 

Throughout the years, we’ve introduced new technology to meet the challenges we faced – and seen world-changing innovations alter the way we live day-to-day and how we interact with the built environment. Just imagine, a company may have grown from one building heated by a single coal stove to a global enterprise with campuses around the world, each containing dozens of buildings that each rely on hundreds of sensors, controls and individual pieces of equipment. If there’s one thing we’re seen, it’s that the complexity of our challenges has grown right alongside these advancements.

 

Most facility managers and energy managers find it difficult to control energy costs when they can’t get a coherent picture of where the costs are coming from. They’re looking across a variety of equipment used in different buildings of various ages used for different purposes. Even in the most modern LEED®-certified building, it can be difficult to accurately track energy savings and sustainability initiatives. And facilities’ budgets are continually being slashed, meaning that managers have fewer resources to maintain and improve their facilities, let alone track and analyze the vast amounts of data available.

 

Now technology is advancing to address these challenges again, offering streamlined views of data and analysis that help building managers make better decisions in less time. The panel and webcast event, “The Changing Role of Technology in Building Efficiency – A User’s Perspective,” offers some opinions on how technology is evolving to meet today’s challenges, but we’d love to hear from you as well. Please tell us how you see technology changing the game in building efficiency by leaving a comment below.

 

 

Watch the webcast.

Big Data. We're hearing the term everywhere. Millions of bits and pieces of information streaming everywhere, all the time. The term "Big Data" may be ubiquitous, but where is all this data coming from? As technological advancements continue to accelerate, sensors and other chips are being embedded into more and more of the world around us, constantly collecting and sharing data from everything from cellphones to stop lights.

We have barely begun to explore the possibilities for Big Data, and some see it as an opportunity for data scientists to shine, while others are experiencing difficulty in pulling the useful information out of the flood of data. Collected data must be analyzed, and often needs to be sorted and normalized, in order to be of any real use in practical applications. In the Building Efficiency industry alone, technology has drastically evolved the way people and equipment interact and many facility teams don't have the resources to process and analyze the mountains of data their equipment provides. In fact, in a recent survey of the Building Efficiency Panel, a group including more than 3,000 industry members, conducted by Johnson Controls, 60% of respondents claim they don't have access to the knowledge and expertise they need in order to take full advantage of their building automation system (BAS).

But taking advantage of Big Data and gleaning the actionable information from the stream is vital for building owners, facility managers and sustainability champions who want to see the whole picture of how their buildings are working and how they can impact energy use and costs. As we continue to see a proliferation of intelligent devices, there are also new opportunities for improving how things work and examining existing patterns in maintenance schedules, occupancy patterns and HVAC systems—and that's just the beginning.

 

Technology, energy and facilities experts are already actively discussing where this technology will take us. Technology experts from Microsoft and Johnson Controls recently discussed the Internet of Things (IOT) and its implications for building management and energy efficiency. Both IDC Energy Insights and the Institute for Building Efficiency have done extensive research on how Big Data can be used in smart buildings, and even mainstream newspapers are discussing how new technology is making it easier for everyone—even analytics novices—to understand the data and how it relates to the realities of their roles and their buildings.

 

 


There continues to be significant differences of opinion within our industry about the value and best approach for measuring and verifying energy savings in energy efficiency retrofit projects.  These opinions range from the perspective that measurement and verification (M&V) is a tax (i.e., additional cost) on projects and should be minimized to an opposing viewpoint that M&V is a tool to improve building performance whose value should be maximized.  I believe that advanced metering and analytics technology can satisfy both perspectives by reducing the cost of whole building M&V while also providing tools for building operators to track and improve building performance over time.

 

Shortly after energy savings performance contracting became popular in the late 1980’s, there was a need to standardize and streamline the process for Measurement and Verification (M&V) of energy savings.   In performance contracting, building efficiency improvements are paid for over time from utility and operational cost savings that arise from projects designed and installed by an Energy Service Company (ESCO).  The ESCO measures, verifies and guarantees the reduction in energy consumption and often helps the owner secure third party financing for the improvements.   Rigorous measurement and verification not only assures the owner that the ESCO has achieved the guaranteed savings but also provides additional security to the financial institution providing the funding.

 

In 1995, an industry coalition, led by the U.S. Department of Energy developed a standard M&V methodology called the International Performance Measurement and Verification Protocol (IPMVP).  The IPMVP protocol, now managed by the Efficiency Valuation Organization, is the basis for measuring and verifying energy savings performance in almost all ESCO performance contracts.  Executing an M&V plan is time consuming and requires specialized knowledge.  Because of this, there has been a trend in recent years to rely on the simpler retrofit isolation verification options instead of the more complex whole building verification option using historical and post-retrofit utility bill data.

 

Whole building M&V is especially applicable for projects with multiple, interacting improvement measures and projects with a significant retro-commissioning or operational improvement component.  In this case, pre-retrofit utility bill, weather and occupancy data is used to create a regression model of building performance.  After the retrofit, utility bill data is analyzed against the predicted baseline energy performance to determine actual savings.  This analysis is usually completed annually by a specially trained engineer that also verifies that the building is being operated and maintained as expected and identifies the root cause of any deviation in performance.  Luckily, recent advances in metering and analytics software can reduce the cost, and improve the effectiveness of whole building measurement and verification.

 

Rather than performing the analysis once a year, a better idea is to use analytics software applications to continuously monitor building performance against the baseline using monthly or shorter term interval meter data.  This software is essentially a virtual “nega-watt” meter that tracks and accumulates energy savings in a way analogous to an energy consumption meter.  By reviewing this “nega-watt” meter, savings performance is continuously monitored, providing early indication of performance problems or savings short-falls.  The software can even automatically detect shifts in the baseline caused by changes in building operation or occupancy.  This is one of challenges of whole building M&V, particularly when monitoring performance over a longer period of time in commercial buildings.  This capability not only provides a cost effective way to verify energy savings against contractual guarantees, it provides building operators and engineers with valuable tools to monitor and tune building performance over time.

 

The figure below shows historical energy use at a Midwestern community college that underwent an energy efficiency retrofit in early 2005.  The first two years of energy use was used to create the baseline model and the fourth year shows a 21% energy reduction in the first year after the retrofit.

 

Picture1.jpg

(click image to enlarge)

 

Persistence of savings is a common problem with building retrofit projects, leading to lost savings and the need to re-commissioning buildings every five to seven years.  With the advanced metering and analytical tools available today, not only can M&V costs be significantly reduced, but a building’s performance can be continuously monitored, tuned and optimized.

 

In the community college example above, additional savings of one to two percent were generated for each of the six years following the retrofit.  These savings were achieved through operational improvements that were identified by the M&V engineer tracking the energy savings.  This is the kind of chart that any building operator or energy engineer would be proud to display in their office.   The example also demonstrates that the same analytics capabilities that can help reduce the cost and complexity of energy savings measurement and verification can be leveraged to improve the performance of buildings over time.  Perhaps it’s time to change the name of M&V to MV&I (Measurement, Verification and Improvement) to be more reflective of the additional benefits that energy analytics it can bring.

You probably don’t remember when the electric thermostat was invented, but we do.

 

It was 125 years ago, and it was the catalyst for the concept of building efficiency. We have been innovating and improving on this concept for over a century. And now, we’ve reinvented it with the introduction of our Panoptix® solution.

 

What if your buildings could think for themselves? Tell you when a system needed repair or tuning?  What if they could diagnose and even self-correct problems before they occur? Or advise you how to reduce energy consumption or improve occupant comfort. You might think this is a far fetched concept that is reserved for the newest and most sophisticated buildings of the future. But in fact, it’s a reality that has already started with the introduction of the Panoptix solution. From new buildings to the world’s oldest structures, it’s time your buildings talked back.

 

These buildings won’t just inform you. They’ll inspire you. Whether it’s a high-rise office building, a sophisticated hospital complex or a small, rural K-12 school, you’ll see new heights of building efficiency that’ll drive you to achieve new levels of performance.

 

Self-connecting, self-commissioning, self-correcting. Systems that call their own technicians. Comparing old and new performance measurements. If only all of us were as intuitive and responsive as these buildings.

 

This is our vision of the future, and we can’t wait to share it with you. Visit us this year at the Greenbuild International Conference and Expo in San Francisco, Booth 4161 N.


I just returned from the Clinton Global Initiative (CGI) Annual Meeting in New York City.  This is always an inspirational experience, listening to leaders in government, business and civil society talk about the commitments and progress they have made to turn ideas into action.  To date, CGI members have made more than 2,100 Commitments to Action, which are already improving the lives of nearly 400 million people in more than 180 countries.

 

Last year, The Natural Resources Defense Council, Johnson Controls, Jones Lang LaSalle and Goldman Sachs entered into a CGI commitment on a new three year project to grow demand for green build-outs in commercial tenant spaces.  The Greenprint Foundation, Malkin Holdings LLC, Vornado Realty Trust and YR&G are participating partners in the project.  The team will work with early-adopter tenants to incorporate green measures into their build-outs, document the business case, provide a roadmap for green build-outs and aggressively publicize the benefits.  A video progress report on the project was shown at this year’s annual meeting.

 

As we learned in the Empire State Building retrofit project, over half of the energy savings potential is from tenant space improvements, and the return on those incremental investments is positive over the term of the lease.  For years, the green building industry has focused on increasing the supply of green buildings with the hope that tenants will be attracted to, and pay a premium for, space in high-performance green buildings.  Our approach is unique in that it focuses on creating tenant demand for green commercial buildings as the driver for increasing the energy efficiency market.  Through careful monitoring and analysis of the high-performance demonstration projects, that it is more cost-effective to build-out a high-performance tenant space in a high-performance building.  This should increase market demand for green buildings which, as we learned in Economics 101, should increase supply.

 

Even today, we can see evidence of supply and demand in action.  A recent global study by our Institute for Building Efficiency asked 3500 facility, real estate and energy management executives about their plans and policies regarding leasing and tenant build-outs.  In the survey, 25% of participants were willing to pay a premium for space in a certified green building and 24% planned to build out tenant space to high performance (above code) standards.  Based on these results, we would expect that green buildings should start to increase in value, driven by increased demand.

 

The good news is that we can see the economic principles of supply and demand at work today in Australia.  IPD Green Property Investment Index assesses the financial performance of commercial buildings that hold a Green Star or National Australian Built Environment Rating System (NABERS) ratings.  The assets in the index represent about 90 per cent of Australian commercial office space by capital value.  The study results suggest that tenants prefer buildings with Green Star and high NABERS energy ratings, which is pushing up effective rents and asset values.  Green Star returns were strongest in Sydney, with rated buildings (12 per cent) outperforming the market (9.2 per cent) by 280 basis points.  Higher-rated NABERS energy buildings (4 to 6 Star) consistently outperformed low-rated (0 to 3.5 star) buildings in Melbourne, Sydney, Brisbane and Canberra.  In Melbourne, the 4-6 star rating delivered a total return of 12 per cent, 160 basis points higher than the lower rated properties.

 

The Australian study, which clearly shows the impact of increased demand for green buildings on property values, proves what many in the industry have believed for years – that bad buildings are bad for business.

 


clay.nesler

Groundhog Day for Big Data

Posted by clay.nesler Aug 30, 2012

In the month of May alone, there were five conferences dedicated to the topic of big data and the built environment.  I attended a number of them and it seemed like we were often engaged in variations of the same basic conversation focused on somewhat different topics with somewhat different audiences.  There is a feeling that all the data the industry needs is readily available but hidden away in utility bills, file folders, energy audits and real estate transaction records.  The general problem is that this data is not available in an electronic, consistent and accessible format.  The proposed solution is that we just need to dump all this data into a database and magical things will start to happen.

 

I would suggest that a lot of the interesting building data analysis completed to date has been based on limited, but structured, data sets like CBECS (whose data is almost ten years old) and LEED submittal data.  The analysis is much less likely to be based on the messy, ad hoc and incomplete data sets that are so often talked about as the “mother lode” of building data.  There have been a number of proposals for creating various types of building databases, some based on data that isn’t generally available and some producing information of questionable value.  Just as good buildings need good architects, so do good databases.  And perhaps even more important, we need to identify the problems really worth solving to guide the architects who design and populate those databases.

 

In June, the Institute for Building Efficiency hosted a roundtable dialogue session with industry experts to discuss the impact big data can have on buildings.  The roundtable discussed trends in building data management and explored areas for future research.  The discussion focused on identifying problems worth solving and what data and analysis is needed to solve them.  Five key themes emerged from the roundtable discussion including the need for:  1) data to improve building benchmarking, 2) data to support better energy management, 3) data to help non-experts be more efficient, 4) data to enable third-party financing and asset valuation and 5) data to improve community and utility resource planning.

 

One of the “a-ha” moments during the recent data conferences and an example of a problem worth solving was a discussion about the aggregation and third-party financing of energy efficiency retrofits.  It turns out (much to the horror of the energy efficiency community) that the fact that a more efficient home reduces energy costs is of limited value to lenders, at least in the near-term until more data becomes available.  What matters is the likelihood that the home owner will pay back the loan (i.e., the borrower’s credit worthiness) and reducing their monthly utility bills has a secondary impact at best.  But what if investing in energy efficiency correlated with repayment history and high FICO scores?  In commercial buildings there are no FICO scores so having data that demonstrates owners of higher-performing buildings are better credit risks might be the only practical way to convince lenders and bond rating agencies to invest in aggregated portfolios of retrofits, an essential step in creating a secondary market for efficiency retrofit financing.

 

In future blogs, I will comment on other aspects of building data management related to the themes resulting from the dialogue session.  In the mean time, I suggest we focus the discussion on defining problems worth solving, data worth storing and analysis worth sharing.

 


Last week, Energy Secretary Chu visited Milwaukee and Mayor Barrett announced that the City of Milwaukee would be joining the Better Buildings Challenge.  This is a great move for the city, especially with the active support of the local real estate community including BOMA and the Milwaukee Business Improvement District.

 

Milwaukee already has an innovative energy efficiency financing program called Milwaukee Energy Efficiency (Me2) that provides a range of different incentives to stimulate investment in commercial energy efficiency retrofits.  One option that is particularly attractive is the Clean Energy Financing Program which helps building owners finance retrofits through a PACE-type of surcharge on their property tax bill.  This allows the building owner to secure competitive financing from third parties, to pass through retrofit costs and benefits to tenants without having to modify lease structures and to transfer the loan obligation upon a change of ownership. 

 

In our annual Energy Efficiency Indicator study of real estate and facility management executives, access to capital continues to be identified as the greatest barrier to investment in energy efficiency in the U.S.  The study also showed that organizations that set energy or carbon reduction goals, whether internal or external, invested in twice as many efficiency measures as those organizations that didn’t.  Similarly, organizations that leveraged external financing also invested in twice as many efficiency measures.  The combination of the Better Buildings Challenge, which seeks to achieve a 20% energy consumption reduction by 2020, and the financing support of Me2 should provide a powerful incentive for Milwaukee building owners to make improvements that will reduce costs, improve asset values and create local jobs.

 

I work in a one hundred year old building in downtown Milwaukee that is part of a seven building campus, which includes the LEED Gold certified Brengel Technology Center which was built in 2001.  The other six buildings have also undergone significant energy efficiency improvements in the past decade including updated chillers, air handing units, controls and lighting.  The energy use intensity of these older, renovated buildings is comparable to that of our newer, high performance buildings proving that energy efficiency is not just for new buildings.  Hopefully, other building owners in downtown Milwaukee will follow suite and reap the many benefits.

 

Milwaukee is already famous for its beer and brats.  Hopefully this challenge and Me2 program will expand on Milwaukee’s reputation and make it known for its beer, brats and better buildings.

On the 20th anniversary of the Rio Earth Summit, representatives of over 190 countries have assembled in Rio de Janiero to reach consensus on a global roadmap for sustainable development.  A big change over the past twenty years is the increased role of the private-sector in both the debate and proposed actions.  More representatives of business and industry have attended Rio+20 then any other UN conference in history.  They now represent the second largest stakeholder group with numerous side-events and other activities scheduled throughout the conference.   I spoke at seven such events this week and attended many others, joining sustainability executives from a large number of leading Fortune 1000 companies.

 

One of the objectives of Rio+20 is the registering of commitments for action from governments, civil society and the private-sector.  Johnson Controls made a public commitment during the conference and announced the release of the second edition of our building energy efficiency policy toolkit. The commitment includes working with non-governmental organizations around the world to use the toolkit with developing countries to create effective policies promote energy efficiency in new construction and existing buildings.  Our partners on the development and deployment of the toolkit include the Business Council for Sustainable Energy, the Center for Clean Air Policy, the US Green Building Council and the World Green Building Council.

 

Johnson Controls also made a commitment, and was recognized at a dinner hosted by Prince Albert II, for working with the UN Foundation to establish a new Global Building Energy Efficiency Partnership (GBEEP).  This partnership was created in support of UN Secretary-General Ban-Ki moon’s Sustainable Energy for All initiative which seeks to mobilize action from all sectors of society in support of three interlinked objectives by 2030:  1) Provide universal access to modern energy services; 2) Double the share of renewable energy in the global energy mix; and 3) Double the global rate of improvement in energy efficiency.  The GBEEP partnership will be a collaborative forum for private, public and civil society organizations to accelerate and scale the global deployment of energy efficiency in the built environment.

 

While the debate and discussion among the member states moves steadily towards consensus, it is clear that the voice of the private-sector has been heard and that the next ten years of sustainable development with benefit greatly from their greater involvement and contribution to the green economy.

The Institute for Building Efficiency released its 2012 Energy Efficiency Indicator study today at the 23rd annual Energy Efficiency Forum in Washington, DC.  Once again, the trend of leading indicators related to interest, importance and investment were positive in all major regions of the world surveyed. 

 

The survey asked 3,500 executives from  the US, Canada, China, India, Australia, Brazil, UK, Germany and France, who are responsible for energy management and real estate decisions, about their energy management practices, investment plans and priorities.  The survey also tracks key investment drivers, barriers and the impact of government policies.

 

Some highlights from this year’s study are that 85 percent of global participants believe that energy management is very or extremely important – up 25 points in the past two years.  Fifty-two percent of participants plan to increase investment in energy efficiency and renewable energy, lead by China at 81 percent and India at 74 percent. 

 

Green building certification is also on the rise with 43 percent planning to certify new construction projects and 44 percent planning to certify existing buildings.  Interestingly, about a quarter of global respondents are willing to pay a premium for space in a certified green building and an additional quarter build out their tenant space to high performance (above code) levels.

 

In future posts, I will share more insights into specific details of the study.

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