Photo by: Dennis Schroeder/NREL

 Maria Vargas, of the Department of Energy, provides some insight into some of the Better Buildings Initiative’s early accomplishments.

Full Transcript:

Ben lack: How did the Better Buildings Initiative come about?
Maria Vargas: In February, following his State of the Union address, President Obama announced his Better Buildings Initiative as part of his vision for catalysing a more efficient economy within the U.S. with the hope of saving money, helping the environment, and creating jobs.  Greater energy efficiency is something that many, including the Department of Energy have been promoting  for a while, but the Better Buildings Challenge is exciting and particularly notable because it is a public private partnership that sets an aggressive goal for improving commercial and industrial building efficiency by 20% by 2020 to create jobs and reduce energy bills by more than $40 billion a year.
Ben Lack: So, the idea was fostered earlier this year and what’s been kind of the value proposition to get and recruit companies and organizations to participate in this? How are you pitching it to different organizations and what’s the roll-out strategy for getting people to know about it?
Maria Vargas: I actually think there’s one question before those two and that is, “What is it that we’re trying to accomplish with the Challenge?” To drive greater efficiency in the country, what has become apparent in the work that has been done in the past is that there are persistent barriers in the marketplace that stand in the way of organizations embracing energy efficiency throughout their entire portfolio. These barriers include lack of senior management buy-in, lack of financing (or an appropriate hurdle rate set for efficiency projects commensurate with the associated risk) lack of information on what to do and how best to do it. The Challenge is structured to address these barriers and carve out a path forward by working with leaders in the marketplace. The result will be real solutions that other organizations can follow and replicate.The Better Buildings Challenge is a leadership challenge. We are partnering with organizations in the marketplace that have an interest in moving greater efficiency to the economy and acting in ways that are bigger than just their organization. Organizations that that are working with us in the challenge are committing to share their portfolio-wide energy information, do a showcase project that’s really an example of the kinds of savings they can see in their facilities, and share with us their implementation models. These models identify how they overcame barriers within their organization and provide the concrete information for the marketplace that can be replicated by others. The hope is that the success that they’ve had becomes solutions that other organizations can use so that leaders in the Better Buildings Challenge are serving as mentors for other organizations. The Department of Energy will work with these partners to provide technical assistance for specific problems that they’re trying to address, and recognize them for their success and for the models that they’re able to provide and the solutions that they’re able to provide in the marketplace. So, recognition for setting the goal, achieving it and helping the market understand, in very concrete terms, how they achieved it. It’s what we’re looking to do to the challenge.
Ben Lack: The administration recently announced that $2 billion is being allocated to help further this cause and an additional $2 billion has been put up basically by partner organizations and companies to try to reach these goals. A lot of the companies that are participating in the announcement are very large organizations. Is this program really targeted towards the biggest companies out there and if so, why is that the directive?
Maria Vargas: Yes, let’s go back to the $2 billion and $2 billion because I think those numbers get a little confused. Part of the announcement was a Presidential commitment to $2 billion in Federal building energy upgrades. The President signed a Presidential Memorandum that directs all Federal agencies to use existing authority to utilize performance based contracts to do retrofits in Federal buildings. The $2 billion does not require additional funds. The Federal government is going to be using these performance contracts to drive greater efficiency and efficiency projects in Federal buildings. The other $2 billion is being offered by Financial Allies. These groups, like Citibank, Transcend or Green Campus Partners, are making available $2 billion worth of financing for organizations to use to finance energy efficiency upgrades.As for the size of organizations that can participate, the Better Buildings Challenge is not about size the size of the organization it is about a commitment to efficiency, a commitment to being a mentor to other organizations, and a commitment to working with the Department of Energy to provide replicable solutions to the marketplace. We’re working hard to make sure that we have a representation to the Challenge from the different sectors. We know that hospitals would want to learn how best to do this from other hospitals. Hotels will want to learn to do this from other hotels. School districts want to learn this from other school districts.
Ben Lack: Why was $2 billion the number chosen or I guess, selected for the executive order? Could it have been more and if so, why wasn’t it?
Maria Vargas: $2 billion worth of upgrades in Federal facilities is a tall order. It will be a large effort on the part of the Federal government, so that it’s a good goal, it’s an aggressive goal, but it’s doable within the next 2 years.
Ben Lack: Talk to us a little bit about the next steps. I mean, the program has about 8 years before it has an opportunity to see if it has reached the goal or not. What’s the strategy to keep bringing people on board and making sure that the awareness of this program is as high as it can be?
Maria Vargas: Our goal is less about awareness of the program and more about making people aware of solutions available in the marketplace. At the Department of Energy our goal is to provide solutions that organizations can avail them of, to drive greater efficiency. And to create jobs, save money on energy bills, and protect the environment. You can have all those things at once, when you pursue greater efficiency.You are right that the goal for the challenge is 8 years out, but we are doing a couple things that we believe will keep the challenge front and center not only in the organizations that we’re working with but with the marketplace. First of those is the showcase projects. When you sign up a challenge participant, one of the things you agree to do is to start quickly is a showcase project. These showcase projects will provide good examples of how to maximize efficiency in different kinds of buildings. So, you can expect from some of our hotel partners that they will have chosen one hotel that’s going to be hopefully illustrate what it is they are looking to do throughout their portfolio of hotels. Likewise, for school districts, commercial office buildings, retail stores, so it’s really those showcase projects that are the next big step. Many of our partners have already started on them and so we’re very excited to begin to deliver to the market some real good examples of what people are doing in support of this challenge. Another important part of the challenge is generating implementation models – ways that they can illustrate in a very concrete way how they were able to overcome barriers. So, our hope is that we’re going to end up with a pretty robust solution center in 2 to 3 years that actually will allow any organization, to learn from solutions that have worked for others and that may be a good fit for them.
Ben Lack: What’s been the biggest surprise or a pleasant surprise that you’ve experienced so far as you’ve been managing this project?
Maria Vargas: Probably the willingness of our partners to be transparent, give us data, and act in a way that makes it clear that they’re doing this for a purpose that’s bigger than themselves. These organizations have stepped up to be “mentors” for other organizations so others can benefit from their experience. These partners really serve as leaders for other organizations.
Ben Lack: Conversely, what’s been the biggest challenge that you’ve had to kind of overcome to make sure that this thing really gains traction?
Maria Vargas: I’m of the mind-set that a challenge is another way of seeing an opportunity. One of the challenges we had was to figure out how to work with the manufacturing sector to make sure that they are part of this challenge. Industrial facilities’ use of energy can be seen as a part of their competitive suite, so I’ve been amazed that the number of those who have stepped forward to partner with us in the Better Buildings Challenge. It has been a great opportunity to work with this sector. I’m thrilled to be working with these organizations so that we have solutions, tolls and examples of what works for manufacturing facilities as well as for commercial buildings.
Ben Lack: The energy efficiency solution manufacturers, whether they offer products or services are obviously very pleased with the fact that this program is out there. What’s your relationship with that community and how do you make sure that they provide the top level service that they need to provide in order to ensure that the companies that you’re bringing on board to participate in the program are going to successfully reach that 20% goal?
Maria Vargas: I think I understand your question. So, are you asking about …
Ben Lack: The GEs and the Honeywells, the solution companies, the folks that are going to be installing these products and services, whether it’s software or hardware, into these companies that these organizations that are partnering up and signing up for the challenge can actually reach this operational efficiency and the other half of the coin is upgrades. What are you doing to work with that community?
Maria Vargas: The short answer is nothing yet. Right now within the Challenge, we have two ways that organizations can join as allies. One is as a financial ally and then the other as a utility ally. We would like to craft an ally program for service and product providers but we’re just not there yet.
Ben Lack: Why are you personally doing what you’re doing and why does this industry interest you?
Maria Vargas: I’ve been working on energy efficiency for over 25 years and I am convinced that efficiency is a powerful way that we can address a myriad of challenges that we face. From an environmental perspective, energy efficiency is one of the best ways to help fight climate change. I think it’s the way for organizations like the schools that my kids go to, to not waste money on energy bills but make sure they’re using energy efficiently so the money that a school is allocated actually goes to pay for things like textbooks and computers rather than paying for energy waste. I think that efficiency is a very powerful way to increase competiveness in this country and create jobs. I’ve stayed in the field because I think the potential is huge and the opportunity for the U.S. to be in a leadership position is now, and I’m thrilled that I get a chance to work with these leading organizations in the market – leading organizations want to follow other leaders. The combination of working with the Department of Energy as well as leaders in different sectors of the U.S. economy to demonstrate the potential of energy efficiency is one that’s incredibly rewarding, both professionally and also personally.

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