Building MPG

On 5th September 2008, I pitched my idea to encourage energy efficient buildings, I will not bore you with the speech, essentially it boils down to providing a metric, to assess, rate and compare building performance.  We need a simple concept, that encourages building energy efficiency, creates a certain competition between building owners, and last but not least a metric that is easily understandable by the general public, so created MPG for buildings.

EUI, or the other commonly used metrics for building efficiency are childs play to professionals, but the general public doesn’t get it. You need to spend your resources educating people what the metric means, but with MPG they get it!  Although the HKSAR hasnt taken up the challenge, opting for another EUI as part of the new building energy efficiency code (cap 611), the idea has taken hold in USA link from the Department of Energy Resources.

The USA State of Massachusetts has published a white paper ( link PDF white paper MPG for buildings).  Thanks for reading, here is my presentation slides on slideshare:

Building Energy Efficiency Seminar

 

So besides some bragging rights,  what is the point of this post you might ask,  if your looking for energy solutions engage right people or you’ll be taking a haircut too.

John Herbert, Consultant

Building Energy Label – Mandatory

Here in Hong Kong 89% of all electricity consumed, and 63% of Carbon emission are created from our buildings, and these rise every year. I had argued that mandatory building labelling is the future, and until customers can see an easy to read, third party verified, building energy label there is little incentive for building owners and operators to reduce energy consumption and carbon emissions from buildings. The disconnect in speculative buildings (for leasing) is obvious, since the building operators profit from inefficiency [refer note 1].

Now Australia will likely become the next country to bite the bullet, realising the importance of energy usage in buildings, a mandatory label scheme is planned for mid of 2010. It seems the popular NABERS scheme will form part of the system.

Overseas, in the United Kingdom has a mandatory label scheme is in place for all government buildings, a certain forerunner for the private sector.

Mandatory building labels will create job, employment, and better buildings, REITs, fund managers, and consumers will have a choice, a choice I believe they will exercise. At the recent HKGBC conference, a building fund manager endorsed building labelling for this very reason, and early adopters and users of of the green building labels [refer note 2] would testify.

Notes:
[1] A building with numerous owners or tenants cannot be managed effectively, therefore a property management company is employed to operate and oversee all the building common area operations, for example the central chilled water equipment. For multi-owner buildings, it is common for a committee to drive the scope of the property services provided. However, many of these property management firms are compensated on a percentage fee basis or cost plus basis, therefore if more fuel used, the management charge is also higher.

Also all tenants typically pay a management fee based on Gross Floor Area (GFA) of the leased accommodation, irrespective of the actual energy usage, therefore we have a situation where there is no financial incentive to lower the use of central services such as central air conditioning because they don’t benefit from the saved costs or lower emissions.

[2] BEAM is the local green building label system. Buildings are assessed against various criteria, and can be awarded a green building label to distinguish them from other buildings. Once a valid scheme is established customers and facilities personnel have a choice and often use that label as a key criteria for choosing accommodation – that is exactly what happened in Australia, the voluntary NABERS scheme became a customer requirement.

– John Herbert, Consultant, Kelcroft E&M Limited
lowering the cost of doing business in Asia.

Alternate EE models

Energy Efficiency might well be the fastest, least intrusive and lowest cost solution to implement energy conservation projects that also lowers your carbon footprint, the McKinsey report even highlights these opportunities. However, it does not take way from the fact that little improvements have been made.

This report dated March 2009 covers much of the same ground, only offering legislative improvements to encourage take up of energy services.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

What tune does your building play?

Buildings account for the largest proportion of greenhouse emissions in Hong Kong, currently that is sixty three percent (63%) of Hong Kong’s carbon footprint. Whilst initiatives for new buildings are indeed welcome, the influence of the measures are limited to 500-600 new buildings, a very small proportion of the total 40,000 buildings in Hong Kong.

Building Tuning

Improving the existing building stock is critical issue, and one solution is tuning your building. If you owned a vehicle – would you run it year after year without a regular tune-up? of course not, yet buildings are often run for fifty years or more, without tuning.

Behind the glass façade air-conditioning, lighting and other environmental systems of commercial buildings, hotels, shopping malls are burning electricity contributing to the Hong Kong carbon footprint, for efficient operation the engineering systems need to be tuned and optimised and I would argue that it should be conducted annually.

One interesting point I have noticed, often I find firms have an elaborate ISO 14000 EMS (Environmental Management Systems) protocols in place, seemingly unaware that the building energy consumption is causing a larger, and more significant environmental impact!

Building Tuning means optimising the operation of the energy systems, including the chiller plant, pumps, and other systems to identify opportunities to lower the building carbon footprint based on today’s operating environment.

Changing Times

It is one of those facts of life, things change. For a building it is no different except it doesn’t it complain so loudly. Electrical tariffs, usage, building codes, the neighbourhood is a little more crowded, social pressure, these and other influences occur over the operating life of a building and may impact the building energy consumption.

Other influences include new legislation also play a role. For example the relaxation on the use of water and cooling towers for air conditioning systems in 2000, offers opportunities to lower operating costs for hotels and other commercial buildings in Hong Kong.

One approach is the hindsight method – review all every engineering system as if it was a new project – what would you do differently today?

The electricity tariff for commercial buildings in Hong Kong island is significantly higher than Kowloon.  Is this fact taken into consideration when designing a building for Kowloon side or HK island?  In my experience unfortunately not.  The main reason often cited is the structural disconnect between building developers don’t pay the fuel and electricity bills. All the operating costs are paid by the tenant, including any core services such as air conditioning, which is charged in the form of a management fee, charged by square foot not actual usage.

Industrial Tunes

Building Tuning is not limited to just office buildings, factories and manufacturing facilities are not immune to the influence of change.

When you lead others follow

Presently, any tenant of a grade A building in Hong Kong looking to lower their carbon footprint presently has limited opportunities while the primary cost, the cost of air-conditioning, is charged on a square foot basis irrespective of actual consumption. Now that’s true for the majority. However, some innovative developers have seen the light, and have started to provide a metered service, therefore tenants will only pay for the actual usage.

Buildings don’t have any voice to complain, and let you know where the problems are located. A buildings Total Cost of Ownership (TCO) is correlated with its annual energy consumption, over its entire life the OPEX (Operating Expense) is significantly higher than its CAPEX (Capital Expenditure), mortgage, cost of finance, etc.  For single owner buildings its a no brainer, the real challenge is multi-owner buildings.

I talked with a client last week regarding his facility, apparently it emerged that a competitor had already completed some work, and now they needed the same work stat. To remain competitive and distinctive in the market place, you either lead or follow.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

LEED Green Building is not leading

This great presentation, worth the nine minutes, it raises the discussion about LEED, and green building rating systems by Mr Henry Gifford. It reminds us that LEED is a great marketing system, yet the study shows that LEED rated buildings actually use more energy than non-rated buildings.

So where do we go from here? Could LEED, or for that matter any green rating system, be the driving force for more energy efficient buildings, perhaps that is the future intention? LEED O&M is the building operating rating system, however if your building is already certified as a LEED Gold building, why would you consider another certification process?

What is needed measurement, and publication of the annual resource consumption (not only electricity and fuel, but water consumption too because cooling towers are widely used).  Once the information is in the public domain the market has the opportunity to choose the lower cost, and reduced environment impact buildings. Building responsibly choosing recycled materials, and those from sustainable resources is a key part of green building, but it is not the only metric.

John Herbert
Consultant
Kelcroft E&M Limited