Philip Henderson, Senior Financial Policy Specialist, Washington, DC
Most people know that new light fixtures can reduce energy waste in office buildings, but even the experts may be surprised to learn just how much energy can be saved by running office buildings better.
NRDC’s new report on Real Time Energy Management shows how one company reduced electricity expenses by about $220,000 in one year simply by catching “operational stray.” The Report provides a roadmap for owners and tenants to improve their buildings and save money with similar projects.
Large office buildings are complicated systems. Building equipment often will “stray” from optimum settings. For example:
Thermostats are adjusted for an evening meeting and not re-set to normal schedules, so the chiller runs at night for weeks.
A sensor breaks, causing fans or pumps to run full-speed when not needed.
A "bug" in software code causes an automated systems to start in the middle of the night.
These are normal events in the life of an office building. These problems must be expected to occur, even in the best buildings. The problem is not that "stray" occurs, but that it can persist undetected for months.
Catching “stray” quickly is the goal of real-time energy mangement. Doing so wastes less energy, saves money for owners and tenants, protects equipment from wear and tear, and makes for better buildings.
A case study in savings
In our Report, we examine the project Tower Companies implemented in three large office buildings it owns and operates in downtown Washington, D.C. Tower’s buildings were already high-performing buildings -- two were Energy Star® buildings and the third was very close to receiving that rating before the project began!
In the first year of the project, Tower reduced electricity use by 23% in one building, 17% in another, and 7% in the third, for an average of 13% across all three buildings. Electricity expenses for these three buildings went down by about $220,000 in year. All that in year 1 of the project.
These amounts probably understate the actual savings. The implemented measures will likely save energy beyond the study period we measured. And Tower expects reduced maintenance expenses -- that is, preventing a chiller from turning-on at night when it should stay off will lengthen the life of this expensive equipment, and running fans at lower speeds will reduce wear and tear on the machinery.
For more details, please see the Report here.
Why these results matter to building owners.
In most office buildings, the owner allocates a substantial portion of utility expenses to the tenants in the building. This means the tenants will see savings from reduced utility bills.
But Tower is likely to benefit substantially from reducing wasted energy in its buildings. It can expect to obtain higher rents, higher occupancy, and higher building values from more energy efficient buildings. Many tenants will pay a premium to be in a building with a good efficiency rating, and some tenants (such as the General Services Administration, the largest tenant in the country), are committed to only lease space in high-efficiency buildings.
Any owner of an office building not engaged in active energy management should worry that they are wasting money on wasted energy and that buildings may be left behind by the market.
What should tenants do?
Tenants of large office buildings should worry that they are paying every month for the cost of wasted energy. Tenants in just about every office building can be fairly sure that systems in their building will “stray." The question is this: what is the building owner or operator doing to quickly catch the stray when it occurs?
Tenants should request landlords explore energy management services, obtain estimates from service providers, and encourage them to adopt services when it appears cost-effective. When shopping for new space, tenants should seek buildings where the owner has energy management services in place or will agree to implement it.
Based on what we learned in our study, and considering the results of other studies, including one from Lawrence Berkeley National Labs and one presented at the Conference on Building Commissioning, it is certain substantial energy savings are there, ready for the taking, merely by paying closer attention to “operational stray” in our office buildings. The question is how to persuade owners and tenants to catch it.