Thursday, March 13, 2008

Energy Use in Commercial Buildings

Today we are at an “energy nexus” directed at global warming taking center stage, green buildings becoming fashionable, and fuel and electricity costs spiraling upwards. It is an “energy nexus” because energy is at the heart of each. Energy [production] is a major contributor to global warming. Energy [efficiency] is a major component of “green” buildings and [the cost of] energy is unquestionably at record high levels.

This nexus has commercial real estate at a financial crossroads. If steps are not taken to improve the energy efficiency of buildings, the government will undoubtedly do it for us. Already it has created considerable concern at the political level with a stream of legislation either passed, planned or in the works. At last count, 27 states, 15 counties and 87 cities have either passed or are in the process of introducing legislation that incorporates energy efficiency is some form as a key component.

While it is impossible to stem the tide of this legislation, such legislation should not really be necessary considering the obvious benefits of increasing building energy efficiency and going “green.” A recent study by CoStar found that “green” buildings can have as much as 30% more value upon sale, experience higher asking rents ($2 or more per square foot), have higher occupancy rates (2% or more higher), and lower operating costs (resulting from lower energy cost, reduced insurance cost and often, tax credits). Tenants also benefit by reduced absenteeism and increased productivity. This has resulted in a number of major players in our industry, including CBRE, Jones Lang LaSalle, Transwestern, GE Real Estate, Hines and ProLogis, committing to move aggressively in this direction. It also adds considerable credibility and momentum to the movement.

Making new commercial buildings energy efficient is not difficult since the owner is starting with a clean slate. Unfortunately, new buildings pale in number compared to existing buildings. For existing commercial buildings, the industry must focus on energy conservation measures and diligent creative management practices.

Typical energy conservation measures thoughtful property managers have applied are identified below. Heating and cooling are generally the single biggest energy cost component (representing about 30% of energy use), followed closely behind by lighting (representing about 25% of energy use).

Typical tactics to reduce energy use in an existing building include:

(1) HVAC System
  • use of programmable thermostats
  • checking that all thermostats are functioning and properly set
  • time-clock controls that can turn systems, such as space cooling and space heating devices, hot water pumps, heat exchanger circulation pumps, and supply, return and exhaust fans, on and off according to building occupancy requirements
  • use of outside air economizers
  • leak testing air supply and return ducts
  • repair any hot water, steam or chilled water line leaks
  • air dampers, damper controls and linkages should be working properly
  • insulate heating and cooling ducts and plenums, hot water, steam, condensate return and chilled water piping
  • make sure combustion systems are cleaned and tuned regularly and replace filters in accordance with the manufacturer’s recommendation
  • clean and tune chiller systems regularly

(2) Service Water System
  • set a temperature limit on the hot water used for purposes other than comfort heating
  • insulate water heater, storage tank and piping
  • time-clock control of hot water recirculation pumps
  • use of low volume shower heads and low flow model toilets

(3) Lighting Systems
  • reduce interior and exterior lighting load with high efficiency lighting
  • use interior and exterior lighting controls to turn off lighting when it is not necessary

(4) Commercial Refrigeration
  • clean and tune refrigeration equipment on a regular basis, particularly the condenser coils and evaporators

(5) Motor-driven equipment
  • repair any leaks in air and water lines
  • clean or replace filters according to the manufacturer’s recommendations

(6) Building
  • install insulation, if possible, in the space between the ceiling joist and roof rafter
  • install individual electricity use meters in tenant space to encourage energy conservation (rather than allocating electricity cost solely on a square foot basis)
  • require the Energy Star rating for any new equipment purchased 

In the final analysis, there really is little choice for building managers but to “jump on the train that is leaving the station.” The alternative is a building that will quickly become obsolete.

Would you like to share what you are doing, and the results you have obtained? My hope is this blog will become a forum for the exchange of great cost effective ideas and strategies to increase building energy efficiency. We want to know what works and what doesn’t and don’t hesitate to provide reviews on your experience with new equipment.

Tony Buonicore, P.E.


Poor Richard said...

global warming....yawn....who are you trying to kid? go drink some more of the green kool-aid....

Tony said...

Whether or not you believe that man-made emissions (for example, carbon dioxide) are causing global warming is the subject of scientific debate. My point is that if global warming causes building owners, managers and operators to move toward energy conservation and energy efficiency, that is good for our industry because it will reduce building operating costs and ultimately increase NOI and property value. If it takes "global warming" to get building owners and managers to act in this energy use realm, then I'm all for it. I don't believe in green kool-aid, but I do know that reducing energy costs will make cold hard cash!

Joe Derhake, PE said...

Everyone can appreciate the value of saving on energy bills but increased rents (even if small) will result in a great return on investments. I find the CoStar Study easy to believe because tenants view green buildings as a big plus.

As Tony pointed out, government regulations is having a great effect too. In California laws like AB 1103 will have a great effect on the behaivor of building owners.

Christopher said...

what a great post.
Tony i hope you dont mind me referring to some of the new and up coming energy efficient technologies you have stated here as part of my build efficiency project.

As for poor richard... ur name describes u in several ways...
poor judgement of the undeniable scientific evidence of accelerated global warming caused by men
and poor because those who utilise energy efficient methods do save money and increase profits with or without "global warming"