Jerry Yudelson: The Business Case for Net Zero Energy Buildings

NET-ZERO-ENERGY BUILDINGSMAKING THE BUSINESS CASE:

Jerry Yudelson, PE, LEED FellowYudelson AssociatesTucson, Arizona

SMACNA National ConventionOctober 21, 2013 — Maui, Hawaii

NET-ZERO-ENERGY BUILDINGSLEARNING OBJECTIVES:

1. Understand the concept of net-zero-energy buildings2. Learn from examples what systems are being used in low-energy buildings3. Become conversant with the business case for Net Zero buildings4. Gather ideas for positioning your business to take advantage of this trend

WHAT HAS CHANGED IN 5 YEARS?LOOKING BACK

1. New HVAC technologies2. Market demand for green buildings3. Cost of green buildings4. Financing for solar5. Cost of solar6. New goals – Net Zero

DPR Const. OfficePhoenix

Public Service Bldg.Salt Lake City

SEATTLEBULLITT CENTER

ENERGY USE INTENSITY©

MULTIPLES©

WHAT WILL CHANGE IN 5 YEARS?LOOKING FORWARD

1. New HVAC technologies2. ASHRAE design standards3. Cost of solar (-)4. Cost of energy (+)5. Regulatory environment6. Market demand7. New technologies

EUI GOALS

PATH_TO_NET_ZERO©

DRIVING FORCES FOR NET ZEROLOOKING AHEAD

1. Policy directives from Gov’t/NGO/Universities, etc.2. LEED3. Living Building Challenge/certification4. Demonstration projects multiplying5. Rapid cost reductions – solar PV6. Financing for commercial rooftop solar7. Increasing energy costs/concerns

1. Large buildings – not enough roof area2. Higher initial costs3. Technical difficulty of low EUI’s4. Lack of integrated design process5. Climate determines solar output6. Market demand7. Energy costs/ROI

INHIBITING FORCESLOOKING AHEAD

Generally, building energy use from all operating demands will be equal (or less) on an annual basis than energy generated by on-site renewable sources.

HVACElectricalLightingWater HeatingPlug and Process Loads

Buying power from green sources doesn’t count (much)!Seasonally: in winter, buildings demand more power than they produce and in summer, they generate more than they use.

DEFINING ZERO ENERGY BUILDING (ZEB)

Net zero site energy buildingNet zero source energy building Net zero energy cost buildingNet zero energy emissions building

ZEBDEFINITIONS

• Building energy use from all operating demands will be equal (or less) on an annual basis than energy generated by on-site renewable sources that are connected to the building’s energy systems– Within building footprint (the best!)– On the site but not all within building footprint (e.g., parking

structures, ground-mounted, etc.)• Generated from combustion of renewable sources (e.g., biomass) and some on-site solar thermal/electric energy• Generated from off-site renewable sources (e.g., buy offsets)

Source: S. Pless and P. Torcellini, NREL/TP-550-44586, June 2010

HIERARCHYZONE DEFINITIONS

Definition Pluses Minuses Other IssuesSite ZEB • Easy to implement.

• Verifiable through on-site measurements.• Conservative approach to achieving ZEB.• No externalities affect performance, can track success over time.• Easy for the building community to understand and communicate.• Encourages energy-efficient building designs.

• Requires more PV export to offset natural gas use. • Does not consider all utility costs (can have a low load factor). • Not able to equate fuel types. • Does not account for non-energy differences between fuel types (supply availability, pollution).

Source ZEB • Able to equate energy value of fuel types used at the site. • Better model for impact on national energy system. • Easier ZEB to reach.

• Does not account for non-energy differences between fuel types (supply availability, pollution). • Source calculations too broad (do not account for regional or daily variations in electricity generation heat rates). • Source energy use accounting and fuel switching can have a larger impact than efficiency technologies. • Does not consider all energy costs (can have a low load factor).

• Need to develop site-to-source conversion factors, which require significant amount of information to define.

Cost ZEB • Easy to implement and measure. • Market forces result in a good balance between fuel types. • Allows for demand-responsive control. • Verifiable from utility bills.

• May not reflect impact to national grid for demand, as extra PV generation can be more valuable for reducing demand with on-site storage than exporting to the grid. • Requires net-metering agreements such that exported electricity can offset energy and non-energy charges. • Highly volatile energy rates make for difficult tracking over time.

• Offsetting monthly service and infrastructure charges require going beyond ZEB. • Net metering is not everywhere well established, often with capacity limits and at buy-back rates that may be lower than retail rates.

Emissions ZEB • Better model for green power. • Accounts for non-energy differences between fuel types (pollution, greenhouse gases). • Easier ZEB to reach.

• Need appropriate emission factors.

ZEB DEFINITIONSSUMMARY

Solar AC generation ranges 1200-1800 kWh/KW (peak) annually in U.S.If a 110,000 sq.ft. building uses 1.5 million kWh/year, you need a ≈1000-kWp system to get net zero

Actually, need solar thermal also, for hot water needsCost $5 million +/-, or ~$45/sq.ft., net of incentivesStill an expensive proposition for a typical office

Living Building Challenge requires this resultMost LEED buildings get to ZEB only by buying green power from outside sources

OF COURSE! BUT . . .IS IT EVEN POSSIBLE?

GREEN BUILDINGBUSINESS CASE:

FINANCIAL Energy/water savings Higher rents/occupancy +Net operating income Higher resale value Tax benefits

REPUTATIONAL Recruit/retain talent Increase stock value Marketing Public relations Investors/donors Value retention

ENVIRONMENTAL Sustainability Storm water management Renewable energy Risk mitigation

SOCIAL Health gains Employee morale Improved productivity

TWO UNIQUE ROI GOALSTWO TYPES OF OWNER

OWNER-OCCUPIERLong-term OwnershipOccupancy of Entire BuildingSame Entity Owns/OccupiesAppeal to Employees/VisitorsInterested in Lowering Op. Costs

INVESTOR-OWNERShorter-term OwnershipMany TenantsAppeal to Tenants’ “Green” Req’sInterested in Rental IncomeIncrease Asset Value for Resale

MEETING SUSTAINABILITY OBJECTIVESEMPLOYEES’ VIEW OF COMPANY

— Ranking against peers— Ability to attract and retain

engaged employees— GHG reporting; Energy Disclosures— Corporate sustainability reporting

MAINTAINING PRODUCTIVE WORK ENVIRONMENT

OWNER/OCCUPIERROI MOTIVATION

ROI MOTIVATIONOWNER-OCCUPIER

INCREASING REVENUE/ASSET VALUE— Valuation driven by rental income (e.g., NOI Metrics)— Comparison to other investment opportunities— Always maintain market flexibility (e.g., Sell property)

STAKEHOLDER PERCEPTION OF FIRM— New reporting requirements in energy efficiency and

GHG emissions

SMART BUILDINGS ADVANCE SUSTAINABILITY GOALS— For both institutional investors and tenants

ROI MOTIVATIONINVESTOR-OWNER

LIVING BUILDING CHALLENGEPERFORMANCE DISCLOSURE

Bullitt Center, Seattle, WA

NET ZERO DEPENDSON HEIGHT

USING PV TOGET NET ZERO

HIGH PERFORMANCEDESIGN APPROACH

SAME TOTAL BUT:Engineering costs lessInvest in architectureActive to passiveFragile to robustLonger lifeLess cost vs. life-cycleSimpler design better

COST TRANSFER

DESIGNINTEGRATED

2012 ZEB/ZEC STUDYNEW BUILDINGS INSTITUTE

ZEB AND ZERO ENERGY:CAPABILITY COUNTS

ZEBs AND ZECsBY TYPE

ZEB AND ZEC BUILDINGS:TECHNOLOGY PENETRATION

High-Efficiency Lighting

High-Efficiency Envelope

High-Efficiency HVAC

Heat Recovery

Ground-Source Heat Pump

UFAD/Displacement

High R-Value Glazing

Natural Ventilation

Daylighting

Cool Roof

Radiant

COST PREMIUMSFig.7

DEMONSTRATE FINANCIAL COST-EFFECTIVENESS– Return on Investment (ROI)– Increase in building value– Risk mitigation– Intangibles (i.e., value of green label)

ACTUAL BUILDING PERFORMANCE– Projects need continuous commissioning– Renewables have to work as planned– Behavioral issues & plug loads must be proactively managed

ISSUESFIRST COST CONCERNS

WIDESPREAD LOW-ENERGY DESIGN KNOW-HOW– Cost premium for good design getting smaller

MORE STRINGENT ENERGY CODES– Reduces first-cost premium for net-zero– Better products at conventional costs

SOLAR POWER COST REDUCTIONS/EFFICIENCY GAINS+ INCREASES IN CONVENTIONAL ENERGY COSTS

– Shorter payback for savingsCARBON REDUCTION GOALS MAY INCREASE PERCEIVED/ACTUAL VALUE OF GREEN OR NET-ZERO BUILDINGS

ISSUESDESIGN KNOW-HOW

PHASE I: 220,000 SQ.FT.PHASE II: 138,000 SQ.FT. (OCCUPIED 18 MONTHS LATER)

NREL — GOLDEN, COLORADOCASE STUDY:

DESIGN/BUILD3 finalists from RFQ processDesign to 10% level to confirm cost

$63 MILLION BUDGET (FIXED)GOVERNMENT PROJECT RULESOUTSIDE “PROCESS” CONSULTANT“FIXED-PRICE, VARIABLE-SCOPE” APPROACH

PROCUREMENTPROJECT

MISSION CRITICAL (3)HIGHLY DESIRABLE (15)STRETCH GOALS (8)

NREL PROJECTOBJECTIVES

MISSION CRITICAL GOALS

MISSION CRITICAL (3) Safety – Jobsite/At Work LEED Platinum ENERGY STAR Label

OBJECTIVESPROJECT

HIGHLY DESIRABLE GOALS

800 staff capacity 25,000 BTU/sq.ft./year Architectural integrity Meet future staff needs Meet ASHRAE 90.1-2007 Support culture/amenities Expandable building Ergonomic work areas

Flexible workspace Support future technologies “How to” occupant manual “Real-time PR” campaign Secure outsider collaboration Building information modeling Substantial completion by 2010 (24 months)

HIGHLY DESIRABLE (15)

Net-zero design approachMost energy-efficient in the worldLEED Platinum “Plus”ASHRAE 90.1-2007 + 50%Support public toursVisual displays: current energy efficiencyNational/global recognition and awardsSupport reduced personnel turnover

IF POSSIBLE (8)PROJECT OBJECTIVES

LOW-ENERGYSTRATEGIES

NREL RSF ENERGY CONSUMPTION

TASK LIGHTS1%

LIGHTS11%

EXT USAGE0%

DOMEST HOT WATER

0%VENT FANS

PUMPS & AUX1%

SPACE COOLING8%

SPACE HEATING15%

MISC24%

SERVER ELEC32%

SERVER COOL0%

SERVER RM FAN1%

LIGHTS

TASK LIGHTS

SERVER ELEC

SERVER COOL

SERVER RM FAN

SPACE HEATING

SPACE COOLING

PUMPS & AUX

VENT FANS

DOMEST HOT WATER

EXT USAGE

Energy Demand Transpired Collectors Thermal Labyrinth Double-Skin Design Data Center: Heat Recovery/Cooling Natural Ventilation Daylighting

DESIGNSIMULATIONS

PLATINUMLEED

Meets site energy, source energy, energy emissions and energy-cost definitions of ZONE with only the roof and parking PV systems.

RENEWABLE ENERGYZONE

RSF ROOF787 KW

3544 MBTU/YR

RSF PARKING540 KW

2432 MBTU/YR

BEAUTYIN NUMBERS

GO FROM HERE?WHERE DO WE

IS GREEN BUT . . . THE FUTURE

IF IT DOESN’T PERFORM . . .

IT CAN’T BE GREEN

es THANK YOU!

es STAY IN TOUCH!

greenbuildconsult.com/blogjerry@greenbuildconsult.com

@jerryyudelson

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Jerry Yudelson: The Business Case for Net Zero Energy Buildings

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