Buildings Energy Efficiency: A Necessary Consideration at Copenhagen

Over the opening days of the Copenhagen Climate Negotiations, which began this Monday, each country has been asked to consider how it can contribute to the 25-40% carbon emission reductions climate scientists believe to be necessary to keep climate change below the 2C mark.  Key issues at stake for the 170 nations represented include commitments to national and international carbon reduction emissions, financing of clean technologies and carbon emission reductions, and technology transfer to non-industrialized nations.   Leading up to the Copenhagen climate summit, deforestation has been primary focus of discussion as deforestation accounts for one-fifth of global carbon emissions and halting deforestation involves large financial investment, but no fundamental consumer behavior changes.  And with a Reducing Emissions from Deforestation and Degradation (REDD) agreement, developed nations would pay developing countries to not cut down their rainforests by treating the standing forest as a valuable commodity.  Such an agreement, if properly financed and implemented, will be necessary to meet global carbon emissions goals and avoid the numerous ecosystem and climate hazards associated with deforestation.

However, in order to meet national greenhouse gas abatement goals and make the economic and structural changes necessary to avoid or mitigate large-scale climate change consequences, industrialized countries must reduce both their total energy consumption and energy intensity.

Consuming 40% of all energy in the US and Europe and 30-40% worldwide, the building sector is one of the least energy efficient sectors and one in which efficiency investment has been generally highly fragmented, relying n the US on individual owners to finance energy efficiency new construction and retrofits.  Yet for many countries, especially the US and the European nations, cutting buildings sector consumption is not only essential to meeting these goals, but is also one of the most cost effective energy saving measures available (see the table from McKinsey, below). Furthermore, analysis by the World Business Council for Sustainable Development (WBCSD) indicates that market-driven reform can reduce building energy use by 60% by 2050, but will require a concerted and immediate effort on the part of industry, government, code and standard making bodies, and labor in order to achieve.

Graph demonstrating the cost effectiveness of buildings energy efficiency (McKinsey)

Looking at energy use in the residential sector as a case study, according to the 2005 Residential Energy Consumption Survey 59% of houses in the US were built before 1980 and in the vast majority of cases have not been substantively renovated or retrofitted. These hugely inefficient houses feature little or no insulation in the attics, walls, and foundations, inefficient HVAC systems, leaky ducts, poor air sealing, outdated windows and doors, and are often expensive to operate due to high energy waste rates, especially during peak heating and cooling periods.

US households spend on average just over $1800 annually on house energy consumption, with over 40% of that energy consumed in maintaining thermal comfort through space heating and air conditioning. However, energy consumption reductions of up to 50% have been proved cost effective in both the retrofit and new housing market by focusing on insulating and air sealing to reduce heating and cooling costs.  In the retrofit market, the efficacy of energy efficiency retrofits in decreasing annual operating costs of a building through energy savings is supported by analysis of the DOE Weatherization Assistance Program.  Independent reports conclude that for every $1 spent to weatherize a house (up to $5000 under the current program), the occupants save $1.67 in utility costs, a savings achieved through measures such as adding insulation, air sealing, installing airtight doors and windows, and occasionally upgrading HVAC equipment and ducts.

In the new homes market, Habitat for Humanity affiliates across the country have succeeded in building affordable housing units that are up to 50% more energy efficient to operate (achieving HERS scores in the low to mid-50s), feature materials with low embodied energy, and are cost-effective, saving the families hundreds of dollars per year in operating costs. (To see case studies on high performance Habitat building, see upcoming FAS report titled “Habitat for Humanity High Performance Building Guide”.)

The US Federal Government has begun to address the need for improved energy efficiency in the building sector through legislation in areas such as:  investments in weatherization (the American Recovery and Reinvestment Act of 2009), commercial and residential energy efficiency tax credits (among others, the Energy Improvement and Extension Act of 2008), federally backed energy efficient mortgages, and setting energy use goals and standards for federal buildings (the Energy Policy Act of 2005 and Executive Order 13423 of 2009).  However, all current US energy legislation will save only a fraction of President Obama’s recently announced target of 17% energy savings by 2020.  My comparison, the European Commission has just tentatively approved an “Energy Performance of Buildings Directive,” which mandates that all new construction be “near zero energy”; this directive is estimated to have the potential to reduce the EU’s greenhouse gas emissions by 70% of their energy savings target of 20% by 2020.

In order to fulfill any promises that are made at Copenhagen over the coming days and weeks, the US will need to set an ambitious buildings energy efficiency target akin to that approved by the European Commission.  This target must be supported by both public and private action and investment, including:  government legislation, incentives, and workforce training; private sector financial investment and the development of a strong, competitive, energy efficiency market; technological innovation both from industry and the national labs; and the rapid development and deployment of high performing building energy codes and standards.

Energy Efficienct Building Codes in the Waxman-Markey Bill

The FAS Building Technologies program has just released a policy analysis titled “Implementing Energy Efficiency in Building Codes Based on the American Clean Energy and Security Act of 2009”, written by FAS intern Amit Talapatra.  Link to the full PDF of the paper here.  

The purpose of this analysis is to provide better understanding of the implications of Section 201 of the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Climate Bill. This analysis examines specific provisions of the bill and investigates ways for the Department of Energy and private code-development organizations to implement these policies using existing tools and methods available to them. The topics covered here include: ways to meet new energy efficiency targets, methods for defining cost-effectiveness, procedures to assure state compliance and issues that may arise if private organizations do not meet the requirements of the bill. For each of these topics, this analysis focuses on the relevant language in the bill, determines what questions stakeholders are interested in and answers these by taking both technical and policy factors into consideration.

Standard Formats for Utility Bills: Why it Matters

When it comes to solving the nation’s energy crisis utility bills hardly seem like much of a big deal.  But improving access to the information in the billing records of the nation’s gas and electric utilities could provide powerful tools to increase the efficiency of energy use in the US.  This is particularly true in residential and commercial buildings that consume 70% of US electricity and are responsible for 40% of all US greenhouse gas emissions.

Unfortunately, utility bill information is stored in a huge number of idiosyncratic formats and is not accessible to individuals and organizations that could use it.  This complex, un-standardized landscape means that anyone interested in comparing their energy use with national averages, or understanding how their building is performing in terms of energy consumption, has to do an enormous amount of work sorting through confusing bill information.  The small investment it would take to get these billing records into standardized formats, and making them easily available to anyone with permission to use them, would pay large dividends, for example by helping individual consumers make better decisions when they are purchasing and operating buildings, and by helping officials managing public programs designed to encourage building energy efficiency make better management decisions.

In the future, detailed information about patterns of consumption may make sense when there’s widespread use of “smart meters” that keep track of energy use minute by minute, and possibly appliance by appliance.  But major gains are possible simply by reporting energy use for each month.  Here are some examples:

  • Legislation could require that billing records and benchmarking data be disclosed to potential buyers at time of sale.  Labels providing data on a building’s energy use have been developed in Europe and are being considered in California and other parts of the US.  Most labels being considered include both calculated energy demand (called “asset rating”) and measured energy consumption (called an “operational rating”).   The US Environmental Protection Agency has developed a tool called a portfolio manager that lets building owners compare the energy performance of their buildings with the performance of similar buildings in similar climates.  At present nothing similar is available for residential buildings. The burden on the user would be greatly reduced if billing data can be uploaded automatically, using standardized formats.
  • If billing records for a building are available online with suitable permissions, a utility, or a third party like Google could provide a service where a consumer could go on line, identify themselves with an appropriate password, and get access to the building’s history of energy use by month – preferably several years of data.  This could then be automatically compared with energy use from similar structures in similar climates, and estimates of the reductions likely to result from cost-effective retrofits.  Consumers might well be motivated to take action.  Benchmarking tools for this purpose have already been developed by the Environmental Protection Agency.
  • Good building energy audits involve entering data about a structure into a computer model that estimates a building’s energy use and also computes the savings that would result from different retrofit measures that could be taken (adding insulation, replacing windows, etc.)   Unfortunately these models are often wrong since the outcome depends on the skill and experience of the person using them.  Accuracy can be improved if the models include an analysis of the actual energy consumption of the structure.  Monthly consumption data, made available to building auditors by permission of the building owner, can be used to track the sources of inaccuracy in the data input and, and algorithms could be developed over time that would suggest corrections to the user.   Improved models will lead directly to retrofits that show better performance and are more cost-effective.   The cost of doing this would be greatly reduced if auditors could access consumption data directly over the internet using appropriate network security tools.  In the future most auditors are likely to be using wireless, handheld units at the building site to collect data and perform the energy use estimates.  These could also have direct access to the data.  The software for these tools would need to be adjusted for each utility if each company keeps data in a different format – at a significant increase in cost.
  • Utility data available online could also be used to strengthen project management for retrofit programs.  The performance of individual auditing and contractor teams could be continuously measured and compared based on the actual impact their work had on energy use in the buildings they serviced.   The persistence of savings could be measured over a period of years and the actual performance of different approaches to retrofits compared in ways that could lead to continuous improvement of the programs.  This, of course, would require collecting and maintaining data on the kinds of measures undertaken and  the cost of the installations in a standardized format.
  • Energy use data collected in a consistent form would also permit continuous analysis of progress, or lack of progress, of city, state, and national programs to improve energy efficiency.  It could be used, for example, to compare programs in different cities, and track the impact of different policy interventions in considerable detail.  While care would need to be taken to ensure that identifiable personal information is not released, statistical agencies have considerable experience in analyzing data scheduled for publication to ensure that this doesn’t happen – and they have a good track record of success.  The novelty in this new system, of course, would be that the data would be gathered online.  Careful design of network security would needed.
  • The introduction of “smart grid” technology will open more opportunities for collecting detailed information about building performance.  The new systems will let building owners and utilities adjust consumption to avoid system peaks and provide information useful for understanding the consumption of specific equipment in the buildings that can, among other things, be used to understand the impact of any retrofit measures undertaken in the building — with statistically significant samples.   The smart grid will require standardized approaches to measuring and reporting consumption data.

Taken together, the benefits of a consistent national format for the energy consumption of individual utility customers would be considerable.  The benefits would include much improved management and accountability for retrofit program funds, and more energy savings per dollar invested.  While some utilities may complain about the cost of converting existing data formats to a new format, the overall costs would be small compared with the savings that could be achieved.

Weatherization Article by John Millhone

I want to share a recently published paper by John Millhone, senior advisor to the FAS Building Technologies Program. John authored a paper for FAS recounting the history of the Weatherization Assistance Program, as well as recommendations for future actions, which can be found here.

John is currently a visiting scholar at the Carnegie Endowment for International Peace in the Carnegie Energy and Climate Program. He is currently evaluating and commenting on U.S. energy policies and focusing on clean energy and economic stimulus initiatives. He is also providing analysis to the U.S.–China provincial and municipal energy efficiency management program for the Carnegie Endowment.

John’s paper for the Carnegie Endowment examines if the massive increase in funding for the Weatherization Assistance Program can be spent well, or if it is simply money thrown at a “feel-good program”.  According to the paper, the answer to this question will “depend on the ability to successfully complete three tasks:

  1. Accelerate the administration of the program, including bringing together a federal, state, local, and private sector implementation structurewith transparent monitoring and verification of the results.
  2. Secure the support and participation of stakeholders with an interest in the success of the program, not only because their support is essential,particularly in the southern states, but also to build confidence in the directionof the stimulus package.
  3. Translate the federal stimulus investment into a self-sustaining,ongoing activity that relies on other funding sources and is recognized as vital in meeting long-term national goals.”

John analyzes each of these three tasks, discussing the potential problems and opportunities associated with each, and he provides recommendations for successfully accomplishing each. The full paper, which I highly suggest reading, can be found here.

Weatherization Ramp Up

The Weatherization Assistance Program Technical Assistance Center has a great page of information about ramp up capacity and planning for the program to handle the $5 Billion on its way from the stimulus bill. The page contains information about ramp up capacities, workforce scenarios and projected workers needed, and impacts and savings.

While there is still a lot of planning to be done, this page is a great insight into a lot of the discussions that have already been happening.

Read more here.

The Stimulus: A Final Analysis

On Tuesday, President Obama signed the $787 Billion American Recovery and Reinvestment Act into law. The act is estimated to save three and a half million jobs over the next two years.

We’ve kept an eye on it through its development, and I want to give an update as to what made it out the other side and into law. My comments on building related portions are below. A more inclusive evaluation of the stimulus’s green measures by the Alliance to Save Energy can be found here and here.

Continue reading

More From President Obama On Retrofits

President Obama held his first prime-time press conference yesterday, fielding questions focusing on the current economic crisis and the bailout currently being debated on capitol hill.  Responding to a question on finding bipartisan solutions in the bailout, President Obama continued to support the idea of energy-efficient retrofits as a means of job creation and economic stimulus:

“This is another concern that I’ve had in some of the arguments that I’m hearing. When people suggest that what a waste of money to make federal buildings more energy-efficient — why would that be a waste of money? We’re creating jobs immediately by retrofitting these buildings or weatherizing 2 million Americans’ homes, as was called for in the package. So that right there creates economic stimulus, and we are saving taxpayers, when it comes to federal buildings, potentially $2 billion. In the case of homeowners, they will see more money in their pockets. And we’re reducing our dependence on foreign oil in the Middle East. Why wouldn’t we want to make that kind of investment?”

I couldn’t agree more.

The full text of President Obama’s press conference is available here.

UK Home Retrofits

It looks like we’re not the only ones seeing the value in home energy retrofits as a means of reducing energy use and CO2 emmissions, as well as a way of creating jobs. The UK is set to announce a plan to offer a complete “eco-makeover” for one in four homes. The campaign will involve providing roughly 7 million houses a complete retrofit to improve insulation. Householders could also be encouraged to install small-scale renewable and low-carbon heating systems such as solar panels and wood-burning boilers. Details of the program have not been announced yet, but it is expected to be voluntary, possibly through loans that can be paid back over 25 years from the expected savings on energy bills.

Read more about the announcement here.

President Obama on the Weatherization Program

In an interview with CBS’s Katie Couric on Wednesday, President Obama was asked about spending measures in the House version of the stimulus package that have been criticized by Sen. Mitch McConnell and others, including $6.2 Billion for the Weatherization Assistance Program. President Obama makes the case for the weatherization program as a means to jump start the economy by creating jobs immediately, saying “We’re going to weatherize homes, that immediately puts people back to work and we’re going to train people who are out of work, including young people, to do the weatherization. As a consequence of weatherization, our energy bills go down and we reduce our dependence on foreign oil. What would be a more effective stimulus package than that?”

The President is correct.

As a paper by the Federation of American Scientists demonstrates, the Weatherization Program is the longest running, and perhaps the most successful US Energy Efficiency Program. The program, which underwrites a portion of the cost for improving the energy efficiency of low-income homes, reduces heating costs by an average of 31 percent, resulting in significantly lower energy bills that are so important in trying economic times like these. The program also creates roughly 52 jobs for every $1 million of federal investment. The stimulus package’s investment of $6.2 Billion into the Weatherization program will result in roughly 300,000 jobs created.

The program carries a great potential to alleviate both the economic and energy woes our country currently faces. Investing in weatherization through the stimulus bill also provides the opportunity to create a more modern, streamlined and effective system for improving residential energy efficiency in the future. To do so, and to ensure the best use of stimulus funds, the weatherization program needs to improve the software tool that weatherization centers use to determine which retrofits are cost-effective, upgrade and standardize the training for energy auditors and weatherization crews, and start collecting data from the field about the real energy savings and costs of different weatherization measures to continuously improve the program.

FAS applauds President Obama and the members of congress for recognizing the potential of the Weatherization Program, and we look forward to seeing this potential realized.