In my last column for The Daily Energy Report, we looked at the prospects for driving energy efficiency in existing facilities, thereby reducing operational costs, through energy upgrades and retrofits. While existing buildings represent a large percentage of today’s green construction opportunity, new construction projects represent a different and exciting opportunity for the building industry, unlocking the potential of holistic building energy management, planned from the project’s inception. Innovations exist today to develop this kind of high performance, high efficiency building from the beginning, but are organizations taking full advantage of what’s at their disposal?
The construction industry, like many others, has faced setbacks as a result of the recent economic downturn. However, we are seeing glimpses of a re-emergence of new construction project opportunities in the U.S. According to a late-2010 study conducted by McGraw Hill Construction, the outlook for the U.S. construction market is slated for renewed growth in overall activity, after experiencing a 2 percent decline in 2010. Additionally, President Obama’s recently unveiled job-creation plan marks a total of $25 billion for new construction and modernization of school facilities.
With fluctuating energy costs and increased mandates and initiatives for efficiency in buildings in the public and private sector such as the Energy Policy Act of 2005 (EPAct 2005), the Energy Independence & Security Act of 2007 (EISA 2007) and President Obama’s Better Buildings Initiative, there is a growing impetus in the U.S. to create more efficient, intelligent and sustainable buildings.
Planning for optimal energy savings
When embarking on a new green construction project, there are several considerations for stakeholders across the building lifecycle to consider:
- Installing the most energy-efficient equipment is important, but this represents only one part of the process of creating a green building. In order to create an optimized, efficient facility that will sustain energy and cost savings over its lifespan, all of the building’s systems must work together. For example, a building could have the most efficient HVAC system on the market, but if the heating is running at the same time as the air conditioning, and the facility manager doesn’t have visibility into operations to identify this problem, there is potential for an enormous amount of energy waste and unnecessary operational expenditure. This scenario sounds unlikely, but you might be surprised to know that it happens every day.
- To achieve the most optimized operational model, building stakeholders should consider an integrated architecture that includes all the major domains of a building: power, IT, process and machines, and building and security management. By converging information from these systems, facility managers can have insight into the building’s energy use as well as manage and automate processes and energy from one common platform. Through this model, building stakeholders can achieve significant savings in capital expenses (CapEx), operational expenses (OpEx) and energy consumption across the entire enterprise.
- Buildings are typically designed by architects that then hand over plans to general contractors who focus on lowering upfront CapEx costs. In the CapEx reduction process, original designs are often modified, and those changes are not assessed for their impact on overall building OpEx costs, which are actually where 75 percent of a building’s life cycle costs are generated over many years. As a result of this scenario, many buildings’ stakeholders are opting to involve a green building expert in all phases of the new construction project to ensure that efficient technologies are integrated across all major domains, potential functional gaps are identified early and highly efficient operations are ensured from day one.
- Many green building experts will also provide training to building and facility managers once the construction is complete, so they can keep facilities running at peak operational efficiencies over the lifecycle.
Performance contracting for new construction
Expertise in the new construction process can also be helpful when undertaking an Energy Savings Performance Contract (ESPC). As a quick refresh from my earlier column, an ESPC enables public sector buildings to receive energy-efficient retrofits and upgrades that pay for themselves over a guaranteed period of time through lower utility bills, and are often done in conjunction with an energy consultant. A performance contract for new construction guarantees energy savings over the lifecycle of a building, even if plans are still on the drawing board. An ESPC is a great option for funding a new construction project for public sector entities such as K-12 schools, colleges, universities and hospitals, most of which have been operating with reduced budgets over the past several years.
One such school district, Eudora Unified School District (USD) 491 in Eudora, Kansas, was experiencing steady growth and sought to expand its facilities to accommodate the changing needs of its student population of more than 1,500. In planning this expansion, the district was motivated to expand in a manner that would balance student needs with fiscal responsibility. Following completion of an ESPC on several existing facilities, the district partnered with Schneider Electric on a novel approach – a performance contract for new construction.
Prior to making any recommendations, a comprehensive lifecycle cost analysis of potential systems was conducted with consideration given to long-term operating, maintenance and energy costs to determine the optimal system for each new construction project. Since this was a new build, there was more involvement early on from Schneider Electric with architects, builders and the construction management group. This involvement early in the planning process enabled the inclusion of energy-efficient solutions into each building system.
Eudora USD 491’s new construction project enabled the district to lock in energy savings and to feel assured that all systems design, installation and commissioning would be executed properly the first time and every time afterward. Since Eudora USD 491 teamed with Schneider Electric on this project, the performance contract has outpaced the guaranteed annual savings and yielded significant environmental savings.
The future of energy-efficient new construction
Buildings are the largest consumers of energy in the world – and while technology breakthroughs in the past several years are helping create greener buildings, those technologies and processes must all work together to create truly efficient, high-performing buildings to reduce consumption and increase sustainability. As the new construction market continues to recover from the recent economic downturn, it will be important for everyone involved in creating the new building – from the stakeholders, architects, designers, contractors and green buildings experts – to be involved in the process to ensure that the building is as energy efficient as possible.
Written by James Potach, senior vice president, Energy Solutions, Schneider Electric; Potach is responsible for performance contracting and power management.