FMJ - May/June 2017

The Power of Energy-Efficiency Certifications

Gurram Gopal and Ana Sanchez 2017-05-11 22:00:01

The green building sector is among the fastest-growing industries worldwide. According to a 2015 Green Building Economic Impact Study issued by Booz Allen Hamilton for the U.S. Green Building Council (USGBC), green construction will create more than 3.3 million jobs in the United States and contribute US$29.8 billion to the gross domestic product by 2018. Both private and public institutions are looking for ways to become more sustainable and save money, and labels such as ENERGY STAR and Leadership in Energy and Environmental Design (LEED) are becoming popular among facility owners and managers. Facility managers are under pressure to improve sustainability in their facilities. At the same time, some managers have questioned whether energy-certified buildings actually deliver on energy performance expectations. If you are a facility professional, you might ask if it is worthwhile to pursue an energy certification, and if so, which one? The research and analysis discussed here will help you get started. ENERGY PERFORMANCE CERTIFICATIONS ARE USEFUL AND VALUABLE Energy performance certifications are procedures that measure the energy efficiency of a building and take into consideration the energy consumed — including the functionality of all building appliances — to provide adequate comfort to its users. Energy performance certifications are some of the key policy instruments used by governments to reduce energy consumption, improve energy efficiency and enhance environmental and social sustainability in the building sector. Some of the direct benefits associated with building certifications include carbon dioxide emissions reductions, potential energy savings, increase in overall property values and improved data on building performance. They provide useful information that can be used by prospective buyers to compare energy efficiency across a building portfolio to aid in decision making. Certifications also identify potential facility upgrades for energy improvements. Certification schemes can be mandatory, such as the European Union Energy Performance of Buildings Directive (EPBD), or voluntary, such as LEED or ENERGY STAR. LOWERING SOURCE ENERGY IS KEY There are diverse methodologies for assessing energy, which makes it difficult to evaluate and compare the assessment processes and associated ratings. Two terms are commonly used in the discussion of energy consumption. The term “site energy” refers to the amount of heat and electricity used by a building as reflected in utility bills. However, the total energy consumption, particularly in the U.S., is often based on “source energy,” which is the total amount of raw fuel that is required to operate a building. This includes the transmission, delivery and production losses incurred in delivering the site energy. The U.S. Environmental Protection Agency (EPA) has published normalized source-site conversion factors to facilitate conversion from site energy to source energy. ENERGY PERFORMANCE STANDARDS AND ASSESSMENTS VARY Energy performance assessments are quite different across regions and countries. Energy efficiencies can be measured in many ways and methodologies are not standardized, making it very difficult to compare or translate results. However, there have been some notable past attempts at standardization — a good example is the European Union’s EPBD. ENERGY CERTIFICATION CHOICES The first green building rating system was the Building Research Establishment’s Environmental Assessment Method (BREEAM) introduced in the United Kingdom during the 1990s. In 2000, the USGBC provided a rating to improve the environmental performance of buildings through its LEED rating system for new construction. Subsequently, there has been a proliferation of standards, ratings and certification programs to achieve sustainable and efficient buildings. Energy certificates show the outputs of the energy performance assessment. The information provided by a certificate can be in one of two forms: A comparative label, which gives a specific building’s ranking when compared with similar buildings, or a positive endorsement label, which certifies that a building meets a specific standard (e.g., ENERGY STAR). Depending on the certification, there are three types of assessing organizations: • First party: Comes directly from an organization that is associated with the entity making the claim or who may benefit from the claim. • Second party: Performed by an interested party, such as a trade association. • Third party: Conducted by an independent party that has no financial interest or ties to the outcome of the assessment. In addition, green product certifications and rating systems can be classified according to how they certify. For example, multi-attribute certifications base assessments on life cycle parameters (e.g., energy use, recycled content and air and water emissions from manufacturing, disposal and use, etc.), whereas single-attribute certifications focus on a specific parameter such as water, energy or chemical emissions. Commonly used building rating or certification systems in the U.S.: • ENERGY STAR: Single-attribute government certification using a benchmarking method • LEED: Multi-attribute green building rating and certification system through independent third-party verification • Green Globes: Multi-attribute green building guidance and assessment • Living Building Challenge: Multi-attribute performance-based standard and certification program Popular programs outside the U.S.: • Building Environmental Assessment Method: Multi-attribute comprehensive standard and supporting process (Hong Kong) • BREEAM: Multi-attribute, multi-tiered process with pre-assessment (UK, EU, EFTA member states, as well as the Persian Gulf ) • Comprehensive Assessment System for Built Environment Efficiency: Multi-attribute assessment tool (Japan) The research findings addressed here focus on two popular certifications in the U.S. with broad international appeal: LEED and ENERGY STAR. LEED AND ENERGY STAR HAVE BEEN BROADLY DEPLOYED LEED is one of the most popular green certifications for buildings worldwide. It's been adopted in 150 countries, and as of March 2015, more than 40 percent of square footage that had been LEED-certified was outside the United States. LEED standards provide a framework and scoring mechanism for assessing building performance and meeting sustainability goals, focusing on six areas affecting human and environmental health: sustainable site, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation and design. ENERGY STAR is a voluntary program created by the EPA to help individuals and businesses save money through superior energy efficiency, with the added benefit of lower greenhouse gas (GHG) emissions. For commercial buildings, this program offers building managers a standardized comparable metric for energy-efficiency benchmarking. Building operation characteristics and a full year of utility bills are entered into the EPA’s online benchmarking tool, Portfolio Manager. This tool provides a score on a 1-100 scale, indicating how the building compares to similar buildings nationwide. A score of 50 indicates that the building is performing at the industry average, while a score of 75 or higher earns the ENERGY STAR label. The U.S. Department of Energy’s Energy Information Administration conducts a national Commercial Building Energy Consumption Survey (CBECS) every four years to gather data on building characteristics and energy use from thousands of buildings across the country ENERGY STAR ratings are part of the LEED assessment in the area of energy. QUESTIONS ABOUT LEED CERTIFICATION AND ENERGY STAR RATING During the past eight years, there has been ongoing criticism around LEED ratings for new construction (LEED-NC), especially since energy assessment for LEED-NC is based on simulated performance at the time of building design and not on actual energy performance after the building is built and occupied. A number of researchers have asserted that LEED buildings show no savings in energy consumption and GHG emissions when compared with non-LEED buildings. Many of these comparative studies use the CBECS median data as the reference point for energy consumption. Even though benchmarking with CBECS appears logical, it is inaccurate when presented without adjustment (e.g., when the reference points are calculated without normalizing for either weather or the nature of building operations). RESEARCH PROJECT In order to account for weather and building operations, the research discussed here used EPA’s Portfolio Manager Median Property Value for properties that are eligible to earn an ENERGY STAR score. It is calculated after normalizing for location, climate, building activity, occupancy, building hours and other factors depending on the building type. This figure offers a better representation of the average energy consumption of similar buildings. For this research project, we worked with a leading analytics provider for corporate and commercial real estate and studied 15 new construction buildings of their clients in their database, composed of three industrial, distribution or warehouse facilities, three mixed-use properties, four multifamily housing properties and five offices. RESULTS: CERTIFIED PROPERTIES DO OUTPERFORM Based on the analysis, the study sample outperformed comparable sites in the EPA’s Portfolio Manager across all facility types, in both site and source energy use intensity (EUI). The study sample also outperformed comparable CBECS median data in all cases except one. The analysis indicates that using the CBECS as a benchmark can lead to non-realistic results. Average site EUI savings for the sample properties were more than 30 percent and source EUI savings were more than 20 percent when compared to the Portfolio Manager Median Property values. We performed similar studies for 188 LEED-Existing Buildings (EB) certified offices from the analytics provider’s client database. LEED-EB offices appear to have higher EUI than conventional counterparts using CBECS, but when using Portfolio Manager Median Property values, LEED buildings show energy savings. Average site and source energy savings for LEED-EB offices are estimated to be 50 percent and 81 percent respectively when compared to the Portfolio Manager Median Property values. This also confirms the inappropriateness of using CBECS median data (without adjustment) as benchmarks. LEED-NC buildings do show better energy performance than conventional counterparts and LEED-EB offices outperform conventional buildings. The research also revealed a positive correlation between ENERGY STAR certification and energy performance, and our study indicated that each ENERGY STAR point accounts for a total energy reduction of approximately 1.25 British thermal units per square foot per year (kBtu/ft2/year) in our range of ENERGY STAR values. TAKEAWAYS According to the International Energy Agency, it is advice on energy-efficiency improvements rather than merely a rating that mobilizes the market to deliver energy-saving measures. Although energy certificates do reveal a building’s energy performance, recommendations for enhancing the efficiency of building elements are more valuable. Consequently, facility owners and managers should seek advice from professional engineers and consultants as well as use software that provides visibility into building performance by capturing and integrating multiple data sources into simple, contextualized dashboards, reports and tasks. Managers can then monitor and optimize whole-portfolio energy and sustainability performance more cost effectively. REFERENCES 1) U.S. Green Building Council (USGBC). (2015). Green Building Economic Impact Study. Prepared by Booz Allen Hamilton. 2) International Energy Agency. (2010). Energy Performance Certification of Buildings – A policy tool to improve energy efficiency. 3) Scofield, J. H. (2013). No evidence LEED building certification is saving primary energy. APS News, 22(7). DR. GURRAM GOPAL is an industry professor in industrial technology and management at Illinois Institute of Technology with a keen interest in sustainability and corporate social responsibility. He has published more than 50 papers and articles and has presented extensively at academic conferences, including the Principles for Responsible Management Education conference in New Delhi, India, sponsored by the U.N. Global Compact. In 2011-12, he received a Fulbright Scholar Award to teach and conduct research at Galway Mayo Institute of Technology in Ireland, and is a Fulbright Specialist candidate from 2013 to 2018. During his career in industry and in academia, he has been actively involved in LEED projects and has worked with students to create innovative programs on sustainability using LEED-certified facilities. ANA SANCHEZ is an industrial engineer who displays a passion for sustainability, strategy and operational excellence. Through her professional experiences in investment banking, supply chain and operations and energy consulting, she produces data-driven insights with actionable recommendations to continuously improve business operations and services.

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