Editor's note: Following is Part 3 in a three-part series.
Parts 1 and 2 of this series made the case for dramatically reducing building energy use through a program of energy-performance standards with building owners as the responsible agents. The first step toward implementing this kind of program is establishing a set of standards to be applied. Energy Star, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy, represents a successful existing-building rating process that provides an excellent basis for such a standard. In the Energy Star program, buildings are categorized by building type, and a building's rating is based on a climate-compensated standard of energy use per unit area of the building. This is a relatively simple and straightforward method that already is employed widely and successfully.
INCORPORATING ENERGY-PERFORMANCE STANDARDS INTO UTILITY RATES
While the types of buildings in the Energy Star program need to be expanded for this energy-use standard to be applied universally, such an expansion, combined with a change from annual to monthly accounting periods to coincide with utility billing cycles, would not be difficult to develop. An updated standard based on the Energy Star program could be applied readily as a mandatory city, state, or national requirement for all buildings based on actual utility-metered energy use.
In a widely applied building-performance standard, separate categories should be developed for existing and new buildings, giving new buildings more stringent energy-performance standards and adhering existing buildings to lower minimum ratings that become more stringent over time.
A dialogue with utilities and regulating agencies is essential to moving this large-scale energy-efficiency initiative forward. Utilities' fundamental sources of revenue are their energy sales; because large-scale efficiency initiatives will reduce that near-term revenue stream, it is crucial that the utility industry and regulators be engaged as a part of developing such building-performance standards so that goals are not undermined as utilities work to maintain their revenue stream. The potential loss of near-term revenue must be addressed, but there are policy approaches that provide new opportunities for utilities as their business model changes to mitigate the loss of energy-sales revenue.
RECOMMENDED NEXT STEPS
Key utility regulatory and public-policy steps that are needed to support a performance-based sustainable-building program include the need to develop a plan for formatting utility-billing information so building owners quickly can assess with each utility bill whether or not a building is meeting its standard for energy use. Advances in metering and data-management technologies make this a practical change for utility-billing procedures. Some utilities already offer similar services, and several states have passed or are considering laws that will standardize such a reporting format.
A second crucial utility regulatory and policy advancement to support a building-energy-performance standard is the need to institutionalize performance standards by adjusting utility-rate structures so that marginal cost of energy for each building served increases if that building consumes energy above the standard's limit for the building's size, type, and local climate during a utility billing cycle. Such a rate, which already has been test-implemented in a limited fashion in areas of California and is called an “excess-use rate,” provides a strong financial incentive for building owners to maintain their energy use within the standard's limits over time. It also provides a much improved incentive for investments by building owners in measures that will reduce energy use to within the building's energy-performance limit if it exceeds that boundary.
The window of opportunity for making a significant change in the environmental consequences of fossil-fuel-based energy use over the last several hundred years is considered by scientists and energy experts to be relatively narrow. While significant progress in building energy-efficiency improvements have been made since the original energy crisis 30 years ago, it will be necessary to advance energy efficiency far more substantially over the next 30 years. Getting started on an effective path to that end is essential to becoming successful in changing the trends in climate change.
Once a shared principle for applying energy-performance standards to reduce building energy use is developed, the next logical steps can be broken down into two categories: technical and public policy. The technical category includes steps recommended to be undertaken primarily within the building-design, construction, and equipment industries. The public-policy steps are those recommended for the public agencies responsible for city, state, or national energy policy, especially agencies influencing utility and building-industry regulatory policy. To be successful, a shared vision for moving forward must be developed, and the technical and public-policy steps must be coordinated.
The technical steps that are needed to move the industry toward a sustainable energy future include:
Expand the Energy Star program to develop effective climate-compensated performance standards for all of the building types that constitute the current energy-consuming building stock and replace the Commercial Buildings Energy Consumption Survey database with energy-performance standards based on projected energy use, using currently available technologies to determine compliance. Separate categories for existing and new buildings are recommended, as is a monthly assessment period.
Develop equipment and control-system standards for automatically monitoring and reporting performance information so that real-time and historical performance data are available to the owners of residential, commercial, and industrial buildings at all times and in a form that ensures their ability to meet an overall monthly building energy-performance standard and identify and correct any developing problems that may affect building energy performance.
The recommended public-policy steps include:
Work with responsible government agencies to implement performance standards into enforceable codes and regulations for buildings based on the Energy-Star-program format. Monthly certification of minimum building performance may be tied to tax rates (incentives) or other surcharges. Performance also can be tied directly to an excess-use energy rate. There are a variety of methods that have been considered, and discussions with involved agencies should be initiated to find the most straightforward path. It is not difficult to imagine laws or ordinances requiring existing buildings to meet a certain Energy Star or other accepted performance rating on a specific timetable and new buildings to meet somewhat more stringent energy-performance requirements based on the same metric as soon as they become occupied.
Work with utility regulators to begin implementing individualized excess-use energy rates and reporting formats in which the non-process energy-unit cost for each building escalates if usage rises above the performance standard's monthly energy-use limit based on building type and size. Such a path could mitigate or even replace the need for the codes or laws outlined previously. Utilities served by forward-thinking regulators may provide energy-performance certification for new buildings and energy-performance monitoring/improvement services.
Develop performance-based programs, funded with a portion of the excess-use revenue, to help owners improve the operating efficiency of their buildings. For commercial and industrial owners, the funds could provide low-cost loans. Unbiased technical assistance also could be provided to building owners whose use exceeds the standards for their buildings.
The positions and steps recommended in this series of columns are the result of a thorough effort to determine the most effective path to building-energy-performance improvements and should be considered a starting point for further discussion.
Read more Engineering Green Buildings columns.
A member of HPAC Engineering's Editorial Advisory Board and principal of The Hartman Co., Thomas Hartman, PE, is an internationally recognized expert in advanced high-performance building-operation strategies. Among his recent innovations are the Equal Marginal Performance Principle and the development of demand-based control, which together offer an effective method to optimally configure and operate complex HVAC systems. He has lectured on advanced-technology topics at seminars around the world.