The M Files

Last week I had the pleasure of presenting energy performance case histories at the Green Building Association Central Pennsylvania chapter annual technical seminar.

The keynote speaker was Marcus Sheffer of Energy Opportunities. Marcus is well known in U.S. Green Building Council circles as the chair of the USGBC’s Energy & Atmosphere Technical Advisory Group.

His presentation was striking in its lack of the usual LEED marketing spin. He didn’t dance around the problems faced by the USGBC in getting their LEED-certified buildings to exhibit exceptional energy performance.

In his words:”The intent of LEED is too often circumvented”  Meaning, it tends to turn into a chase for prescriptive based points at the expense of its goals of superior design and performance.

Marcus went on to paint a vision of the future, which includes a transition of the LEED-certification system from a prescriptive based to a performance based standard.

His words were music to an energy-performance-metric lover’s ears.

The issue of LEED and performance has been a topic of debate for several years to those at the center of the green building industry. Studies have been conducted and interpreted in every conceivable way.

Some deny that performance problems actually exist. Others cynically blame the design community. I’ve heard some in the design community blame building owners for not understanding what LEED certification actually means with the argument, “LEED certifies buildings, not consumer expectations.”

In my view, that’s a shame and a mistake. Consumers are our clients, and they’re paying good money for their green buildings. Energy high performance should be an expectation, not a bonus.

My personal experience has been for every good LEED energy performance outcome, there’s an equal and opposite bad outcome.

Two recent bad apples are illustrated below. Both of these facilities were designed and constructed under the green, high performance premise of LEED. Both look great on paper; no expenses were spared in ensuring full LEED scorecards. Both could conceivably be taken right out of the pages of GreenSource magazine.

The first example is exhibiting worse energy performance than an average building of its type as data-based in the 2003 Commercial Building Energy Consumption Survey (CBECS 2003) by the EIA. In other words, this brand-new green facility is performing worse than an average facility of similar occupancy built sometime prior to 2003.

The second chart illustrates a second building’s first four months of actual energy performance compared to what was expected during the design phase. It’s not even close. If it continues to trend in this fashion, it will also have first-year energy performance worse than the CBECS 2003 average.

Before we try to fix our broken green building standards, we first need to come to an industry-wide consensus that problems like these not only exist, but pervade the green building industry. As someone who’s been at the center of the building energy conversation for 20 years, that’s certainly been my personal experience.

What’s your reaction to the issue? Do you agree that we have a perception-versus-performance gap? If so, what should we do about it? I’d love to hear what you have to say.

The Masonic Villages CHP plant.

When the administration of the Masonic Villages of Elizabethtown, Pennsylvania, set their course for a coal-free future, they were met with more than a few raised eyebrows. It was 2001 and the coal they were burning to produce high-pressure steam was cheap and reliable. Nobody was talking about their “carbon footprint” or worrying about greenhouse gas reporting protocols. The LEED green building standards were in their infancy a curious, construction industry sideshow that few were taking seriously. Natural gas pricing was volatile, and there was little talk of opportunities presented by the Marcellus Shale formation.

But the Masonic organization saw a storm brewing, and change they did.

The Masonic Villages is a non-profit continuing care facility located on 1,400 acres in Lancaster County, Pennsylvania. The buildings on the site range from independent-living condominiums, to assisted-living apartments, to a fully staffed hospital. In operation since 1910, the complex houses about 1,500 residents cared for by 1,200 staff.

The project’s financial case hinged on the non-fuel costs of burning coal, of environmental compliance, annual repairs, round-the-clock labor, and the costs of lost opportunities. These operations and maintenance (O&M) costs were more than enough to offset the apparent low cost of fueling with 5,000 tons of coal annually. In 2002, they signed a design/build contract with McClure Company aimed at achieving an 8.1% internal rate of return (IRR) on a $3.6 million investment.

The scope of work involved constructing a new natural gas fired hot water boiler plant within an adapted garage facility. Intrigued by Pennsylvania’s recent move toward competitive electricity supply, Masonic Villages’ solution also included a combined heat and power (CHP or cogeneration) system consisting of 300 kW of gas fired microturbine generators.

It’s been 10 years, and we recently dusted off the project files. After reviewing their most recent energy bills, it’s clear that the Masons made an excellent decision. By holding the calculated O&M savings constant, you can see that the initial energy cost savings have more than doubled since the study was first commissioned.

Our 10-year look back revealed some lessons learned:

1. Return on the Investment: When the feasibility study was commissioned, the long-term economic outlook was brighter than it is today. Even though the client views their facilities as 50+ year investments, in 2001 it wasn’t clear that spending $3.6 million for a guaranteed 8.1% IRR was the best choice. But given the high performance of the plant, volatility in energy prices, and our current less-optimistic economic outlook, the client made a very wise choice. Actual returns have far exceeded the 8.1% projection.

2. Competitive Electricity Markets: The project was conceived in the early days of Pennsylvania’s move toward a competitive electricity market. Ten years ago, electricity rates were artificially deflated and, through the argument of recapturing stranded costs, the utility company was allowed to essentially fine customers who produced more than 10% of their own power. Short term, many questioned the wisdom of implementing a natural gas fired cogeneration strategy. But now that the electricity rate caps are gone and with the rapid growth of Pennsylvania’s shale gas industry, the cogeneration strategy has proven a “no-brainer.”

3. New Technologies: The client wanted to generate on-site electrical power and was inclined toward newer technologies. We evaluated several options before deciding on the gas-fired microturbines. While we had our share of hiccups during the first year of operation, the turbines have proven quite reliable and are operating as efficiently as advertised. The organization recently added a sixth unit to the original group.

Do you have an alternative energy success story to share? I welcome your comments.

The data from my last post is worthy of review and reinforcement. McClure Company has a client who is installing a basic energy efficiency program with lighting upgrades, HVAC controls enhancements, boiler tuning, and equipment replacements; a geothermal HVAC system upgrade; a biomass heating plant; and both small- and large-scale solar photovoltaic systems. By implementing these measures they will reduce their fossil fuel reliance by 18,452 million BTU annually, accounting for more than 30% of their previous use.

Which of these energy-savings measures represents the largest contribution to fossil fuel reduction? Surprisingly, the answer is the basic energy efficiency program, at 49% of the total.

While representing nearly half of the environmental benefit from the portfolio of projects, the basic efficiency program only cost 12% of the total $7,262,767 price tag.

What makes this client’s energy plan so smart is that they first sought to gain mastery of the fundamentals of energy efficiency. Instead of relying on prescribed checklists, gadgets, and fads, they established energy performance benchmarks and implemented only those measures with verifiable benefits. The numbers don’t lie.

Gunning for LEED ratings or attaching solar panels to inefficient facilities regardless of performance is a public relations stunt. Genuine energy efficiency walking the green talk equals a commitment to measurable performance on every energy-reducing project.