A version of this story originally appeared in Commercial Observer.
Related Companies’ hot water heaters have been built too big for a long time.
No one really knows (or knew until recently) how big hot water heaters should be. “There has been a dearth in general of real data,” Charlotte Matthews, Related’s vice president for sustainability, explained in a phone call. The real estate giant had been building its hot water heaters based on rules of thumb long used by engineers. But the company recently got motivated to get sizing to an exact science to optimize its cogeneration facilities for Hudson Yards, where waste heat from other systems will contribute to keeping water hot.
“So we measured hot water consumption in our buildings and found that our systems were between two and eight times oversized,” she said.
That means that a lot more water was kept hot than the buildings would use. That’s a lot of wasted energy.
But measurement and verification can show what’s working and what’s wasteful for big buildings, practices driven in part by policy and a consensus that has formed in New York City’s real estate industry. In fact, more and more American cities are requiring buildings to report on their energy efficiency, and even that level of policy appears to be nudging progress forward. The administration of Mayor Bill de Blasio has set a goal he calls 80 x 50, to reduce the city’s greenhouse gas emissions by 80 percent by 2050.
To meet that goal, New York needs to cut 43 million metric tons of carbon dioxide from the city’s annual emissions. Buildings will have to make the lion’s share of that cut, according to the ONE NYC goals, cutting 25 metric tons.
The data gathering on energy efficiency became serious here when Local Law 84, which passed in 2009, began requiring New York City’s large properties to turn in reports on how much energy and water each of them use. As a result, the city has started to get a handle on how many buildings are wasteful and how many are using energy effectively.
“It’s not just benchmarking, but it’s also disclosure,” Donna DeConstanzo, a staff director at the Natural Resources Defense Council (NRDC), said.
That’s important, because now building owners can know where they stand compared with their peers, and potential tenants can also check the same facts. We’re in the measurement and verification era of greening private property. The oceans of data can help optimize the coming waves of implementation. If it doesn’t move fast enough, City Hall is promising a legislation era, as well. In other words, if encouraging properties to conserve doesn’t work, they’ll force them to.
“We are seeing somewhat steady declines in terms of Energy Use Intensity, across commercial buildings,” Constantine Kontokosta, Professor of Urban Infomatics at NYU’s Center for Urban Science and Progress (CUSP), said, “but before we can jump to any great conclusions about that we have to understand other factors.”
‘One of the challenges for all of us in this movement is how to get to the smaller operators’
Energy Use Intensity measures usage per square foot, but that isn’t good enough, according to Mr. Kontokosta, because each new employee in a space ups energy demand significantly.
“You can make your building very efficient by not having any tenants in it,” he quipped.
In reality, more employees in less space is really more efficient energy use, but it would show up in per-square-foot measurements as backsliding. He is working on a better model.
Meanwhile, monitoring and measurement can be more fine-grained than what city law requires for reporting, and better information can improve a building’s operations and bottom line.
There’s a map online available to the public that shows how much energy per square foot any given large building uses, and where that places it on the bell curve of other buildings in the data.
Since the law passed, the city has rolled out several programs to help existing building owners lower their energy costs, including the recent launch of the Retrofit Accelerator.
Many of the biggest property owners in New York have already gotten religion. The heaviest political lift may come as technocrats work to apply the insights of all that data to smaller buildings.
“There’s a movement toward more energy management systems [EMS] for buildings,” Jennifer King, a research analyst at the American Council for an Energy-Efficient Economy (ACEE), explained. Such systems know when no one is in them, for example, and can automate cycling all the systems down to the bare minimum. “That’s the whole idea of an EMS, to develop a schedule for the day or the weekend. Minimum light. Minimum heating and cooling.” Basically, buildings can go to sleep, like laptops do.
Increased monitoring can also help building owners assess how well the energy systems are working, a point that Ilana Judah, a principal at FXFOWLE Architects, emphasized. Her firm specializes in green projects.
“I think there are still a lot of inefficiencies in buildings that building managers are potentially not catching,” she said. A case in point is Related’s issue with its hot water systems.
Every energy expert we spoke to said that commercial building managers who want to ease into more energy efficiency should start with LED lights. Lighting, according to the ACEE’s Ms. King, makes up approximately 25 percent of a building’s energy consumption. Better lighting pays off the most quickly, plus it brings flexibility to lighting that can really help with enhancing a workspace (LEDs can change color and intensity easily, for example). By updating lights, “They can get their payback in a couple years,” Ms. King said.
Ms. Matthews cautioned, however, that no retrofit is as easy as one would hope. Even opening up lighting systems can turn into a migraine. Expect surprises, she advised, saying, “It’s a big headache.”
Commercial landlords who want to get to the heart of their building’s consumption should look closely at cooling. “Office buildings have a lot more equipment,” Ms. Judah said. “Everyone has a computer. All of that generates a lot of heat. Plus, you have a lot more density of people.” So cooling leads consumption in commercial, while heating leads it in residential.
One strategy for better cooling is to reduce sources of heat. She pointed out that in the retrofit her firm designed for the Jacob K. Javits Convention Center, it was able to lower the cooling load by reducing the amount of solar heat coming into the building. One method for doing this, often used in Europe, is an external shading system. At the Javits Center, there are patterns built into the glass that reflect out some of the solar radiation, giving the cooling system less work to do.
It’s an example of how energy efficiency is spurring an era of experimentation, but it helps to know which strategies actually work once deployed. As buildings measure green interventions and disclose their results, other owners will have a better sense of which strategies deliver on their promises.
Mr. Kontokosta is working with Related to measure Hudson Yards at a neighborhood-wide level, with sensor systems set up inside, outside and throughout public spaces, to understand how systems really work across a whole community. CUSP is also working with each new set of building level data that comes into the city, so the dataset to test interventions over time is starting to come together.
Eventually, the city as a whole will have to stop measuring and start sealing up buildings, switching out systems and putting grass on roofs (or at least white surfaces).
Family-owned developer Brause Realty is already headed down that road. The company has received attention lately for an apartment building in Long Island City, Queens, planned to be LEED Silver-certified, as Commercial Observer previously reported. “We are a very long-term owner,” David Brause, the company’s president, told CO. His firm is comfortable investing in green features that might take 20 years to pay off, because his company’s strategy is to buy and hold long-term.
He’s honest though that beyond energy cost savings, the economics of green treatments have yet to be entirely proven. Sometimes a building owner can update its lobby or it can build CO2 replacement systems. Which should it choose? “We look at it as, ‘Are we going to get a dollar more value from a renter?’” he mused. “I’ve seen research both ways.”
For existing buildings, even the economic case for updating systems can be tough to make for building owners who aren’t able to work on a 20-year time horizon like large owners can. “We’re trying to create a market driver for retrofits in a market where energy doesn’t cost that much relative to other things,” Ms. Matthews said.
How much that market will be driven by city policy will be hinted at when the de Blasio administration’s Green Buildings Technical Working Group comes out with its upcoming report.
The overall direction of policy has been clear for some time. “Even going back to the Greener Greater Buildings plan under [former Mayor Michael] Bloomberg, that was really the first comprehensive plan to reduce energy consumption in our existing buildings,” Ms. DeCostanzo said. “That was kind of a big, groundbreaking moment.”
Carl Hum, a senior vice president for management services and government affairs at Real Estate Board of New York said his organization has been taking a key role in the working group process, making sure some of the aspirations are balanced alongside practical experience with property.
“From a private owner of real property perspective, we always prefer the carrot and not the stick,” Mr. Brause offered. His company has not been directly taking part in the working group, but he also believes that it has already gotten ahead of any requirements that might be forthcoming, and it isn’t letting up.
‘You can make your building very efficient by not having any tenants in it’
To achieve these goals, greenhouse gas reductions will need to be made in buildings below that 50,000-square-foot threshold, and that might start reaching owners and developers with more constrained budgets. REBNY may reach some of those owners first, as it advances best practices internally with its sustainability committee and by bringing regular updates to its commercial and residential management committees, made up of representatives from major companies throughout the city.
The organization is developing plans to go deeper, as well.
“We are exploring ways to ensure the city’s sustainability measures are carried out in building management,” Mr. Hum said. “That includes your supers, your building managers.” These systems work best, after all, when the people running a building really use them.
“One of the challenges for all of us in this movement is how to get to the smaller operators,” he granted.
One of those smaller owners, Alan Shamah of Shamah Properties, an owner of about 15 multifamily buildings across the city, said he believes that the economics of retrofits have started to work, even for small landlords at his company’s scale.
“You would drive around New York City and see windows open in 20-degree temperatures because the boilers didn’t have a brain,” Mr. Shamah reminisced, though as many New Yorkers will tell you, that era isn’t over. Yet his buildings have been updating their boilers and adding the kind of measurement and verification equipment that Ms. Judah envisions everywhere. “I know what’s going on in all my buildings without going into the boiler room.”
Shamco has been retrofitting, sealing and adding sensors, frequently in collaboration with entities like Con Edison that want to help properties reduce demand. “I almost feel like the city shouldn’t have to impose anything,” he said. “You should do it from a business standpoint. It makes sense to do.”
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