Energy Efficiency in Buildings: Facts, Trends, and Policy Instruments, Provas de Urbanismo

Baixe Energy Efficiency in Buildings: Facts, Trends, and Policy Instruments e outras Provas em PDF para Urbanismo, somente na Docsity! Fa ct s & T re nd s Summary report Energy Efficiency in Buildings Business realities and opportunities Introduction 1 We are pleased to present the first year’s report of the Energy Efficiency in Buildings project of the World Business Council for Sustainable Development. Ten companies headquartered in six countries have investigated and synthesized an exceptional data set reflecting more than 100 billion square meters of building floor space and two-thirds of world energy demand. The result is a significantly more detailed view of the current state of energy demand in the building sector than has previously been compiled. Importantly, it concludes that all participants can immediately drive down world energy demand and reduce carbon emissions using technologies and knowledge available today. Work over the next year will focus on “zero net energy” building designs and applying these to the world buildings data set. The goal is the first quantitative look ever at what may be accomplished economically to reduce energy demand and CO2 emissions in buildings over the next two decades. We expect a persuasive result. In the third and final phase of the project we will commit to actions that will move the building industry towards zero net energy buildings and invite others worldwide to join in the effort. We hope our work inspires a global discussion and ultimately a profound change in the way buildings are designed and constructed. In tr o d u ct io n Jean-François Cirelli Chairman and CEO, Gaz de France Achile A. Actelios Managing Director Falck Group K.R. den Daas Executive Vice-President, Philips Lighting Pierre Gadonneix Chairman and CEO, EDF George David Chairman and CEO, UTC Bruno Lafont Chairman and CEO, LAFARGE Björn Stigson President, WBCSD Charles O. Holliday, Jr. Chairman and CEO, DuPont Johan Karlström President and CEO, Skanska AB Álvaro Portela CEO, Sonae Sierra Lorenzo H. Zambrano Chairman and CEO, CEMEX Tsunehisa Katsumata President and CEO, TEPCO Shosuke Mori President and Director, Kansai 4 EEB Facts and Trends Summary report T h e u r g e n t c h a l l e n g e o f Buildings are responsible for at least 40% of energy use in most countries. The absolute figure is rising fast, as construction booms, especially in countries such as China and India. It is essential to act now, because buildings can make a major contribution to tackling climate change and energy use. Progress can begin immediately because knowledge and technology exist today to slash the energy buildings use, while at the same time improving levels of comfort. Behavioral, organizational and financial barriers stand in the way of immediate action, and three approaches can help overcome them: encouraging interdependence, making energy more valued and transforming behavior. The project summarizes these findings in this, its first year report on facts and trends having to do with energy efficiency in buildings. This report combines the findings from existing research and stakeholder dialogues during hearings, workshops and forums with a breakthrough market research study that measures the stakeholder perceptions of sustainable buildings around the world. The report sets out to establish a baseline of current facts and trends that will be used in the coming months in scenario planning and modeling approaches to assess the needed and prioritized actions for change to affect buildings’ energy consumption. In the final year (by mid-2009), the project will seek to gain commitments to actions by the various stakeholders involved with the building sector, including those of the project itself. The EEB Project covers six countries or regions that are together responsible for two-thirds of world energy demand, including developed & developing countries and a range of climates: Brazil, China, Europe, India, Japan and the United States. The project has brought together leading companies in the building industry1 (see pages 36-37) to tackle this vitally important subject. This group has bridged isolated specialist “silos” to develop a cross-industry view of energy efficiency & to identify the approaches that can be used to transform energy performance. Many organizations, both public and private, are working on building sustainability. This project aims to complement them by providing a business perspective and developing practical action for property developers, regulators, energy providers and suppliers of products and services to the building industry. energy efficiency Approaches to overcomming barriers Encourage interdependence by adopting holistic, integrated approaches among the stakeholders that assure a shared responsibility and accountability toward improved energy performance in buildings and their communities. Make energy more valued by those involved in the development, operation and use of buildings. Transform behavior by educating and motivating the professionals involved in building transactions to alter their course toward improved energy efficiency in buildings. Megacities’ urban growth 2001 India 1951 Beijing Tianjin Dalian The urgent challenge of energy efficiency 5 6 EEB Facts and Trends Summary report T h e v i s i o n: Zero net energy for buildings • Cut buildings’ energy demand by, for example, using insulation and equipment that is more energy efficient • Produce energy locally from renewable and otherwise wasted energy resources • Share energy create buildings that can generate surplus energy and feed it into an intelligent grid infrastructure There are three main approaches to energy neutrality: Summary Urgent action is needed to reduce buildings’ energy use. We can dramatically improve energy efficiency today with existing technologies. Businesses that engage early with energy efficiency for buildings can gain a market advantage. The EEB vision is a world in which buildings consume zero net energy. It is ambitious, but ambition is necessary to achieve the progress needed to address climate change and energy use. Progress must be made now if we are to vastly improve the energy efficiency of both new and existing buildings. Examples exist of where this is being and can be achieved – see EEB around the world on pages 9, 25 and 29. And there are many ambitious goals; for example, the UK government anticipates dramatic energy reductions to achieve its goal that all new homes in England be carbon-neutral by 2016. Efficiency gains in buildings are likely to provide the greatest energy reductions and in many cases will be the most economical option. A study by McKinsey3 estimated that demand reduction measures with no net cost could almost halve expected growth in global electricity demand. The Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report estimates that by 2020 CO2 emissions from building energy use can be reduced by 29% at no net cost. “A building has a long life cycle, so its effect on the environment is a long and continuing issue to consider.” NGO, China2 Ja cq ue s fe rr ie r Sweden’s Bo01 housing estate (the firststage of the Western Harborredevelopment) was completed in 2001. It was designed as a sustainable urban environment, including 100% renewable energy supply, increased biodiversity and a waste management system designed to use waste and sewage as an energy source. The houses are built to minimize heat and electricity consumption. Well-insulated buildings with low-energy windows decrease heating needs, and the installed electrical equipment is highly energy efficient. Each unit is designed to use no more than 105 kWh/m2/year, including household electricity. o televisions towed slightly bourgeois sh Europe Sweden Västra Hamnen residential 2001 105kWh/m2/year En erg y efficien t b u ild in g s arou n d th e w orld Västra Hamnen (Western Harbor), Malmö, Sweden Energy efficient buildings around the world 9 10 EEB Facts and Trends Summary report A l a r m i n g The WBCSD identified buildings as one of the five main users of energy where “megatrends” are needed to transform energy efficiency. They account for 40% of primary energy5 in most countries covered by this project, and consumption is rising. The International Energy Agency (IEA) estimates that current trends in energy demand for buildings will stimulate about half of energy supply investments to 2030.6 If building site energy consumption in China and India grows to current US levels, China’s and India's consumption will be respectively about four and seven times greater than they are today. Figure 1 shows a projection based on current population forecasts combined with current energy use per capita based on Japanese and US levels – what could be considered the best and worst case scenarios. (The arrows show consumption levels in 2003.) This highlights the fact that energy consumption will grow dramatically without action to improve energy efficiency substantially. The construction boom, especially in China, is increasing energy demand significantly, but economic development and other factors are adding to the challenge because they also increase buildings’ energy needs. Figure 1: Best and worst case projections of site energy demand7 The scale of current property stock in several countries or regions, broken down into commercial and residential occupancy, is shown in Figure 2.8 The property market in China is particularly notable and is growing rapidly; China is adding 2 billion square meters a year, equivalent to one-third of Japan's existing building area.9 This means China is building the equivalent of Japan’s building area every three years. Figure 2: Existing building floor space (2003)10 There are large differences in space per person between regions (see Figure 3), especially the much greater residential space per capita in the US. The differences are less marked in commercial buildings, except for China, which currently uses much less commercial space per capita than other regions. This has significant implications for energy use, assuming that space demands in China move toward those in Europe and Japan, if not the US. energy growth Summary Encourage interdependence by adopting holistic, integrated approaches among the stakeholders that assure a shared responsibility and accountability toward improved energy performance in buildings and their communities. Make energy more valued by those involved in the development, operation and use of buildings. Transform behavior by educating and motivating the professionals involved in building transactions to alter their course toward improved energy efficiency in buildings. “Buildings and construction are one of the sectors causing emissions that are really a problem for climate change.” Journalist, International 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Worst case proection- US per capita levels Best case projection- Japan per capita levels EU-15IndiaChinaBrazil A nn ua l e ne rg y de m an d (T W h) 2003 level 2050 projection based on: 0 5 10 15 20 25 30 35 40 Commercial Residential USJapanEU-15China Fl oo r s pa ce (b ill io n m 2 ) Use, 84% (heating, ventilation, hot water & electricity) Maintenance and renovation, 4% Manufacturing, transport and construction, 12% 0 1 2 3 4 5 6 7 8 Commercial Residential JapanEurope (OECD) USBrazilIndia* 20 30 2 00 3 China* 20 30 2 00 3 20 30 2 00 3 20 30 2 00 3 20 30 2 00 3 20 30 2 00 3 Th ou sa nd s of T W h * Energy use from marketed sources Alarming energy growth 11 0 20 40 60 80 100 Commercial Residential USJapanEU-15China Fl oo r sp ac e p er p er so n (m 2 ) 0 20% 40% 60% 80% 100% heat electricity biomass natural gas petroleum coal USJapanEU-15IndiaChinaBrazil Figure 4: Building energy projection by region – 2003/203012 This report and this project focus on the energy demands of buildings (site energy). The sources of energy vary greatly (see Figure 5), with a significant amount of coal and biomass burned on site in China and India, but with a much higher share of electricity being used in other countries. This variation contributes to large differences in primary energy consumption (see Figure 6) because of the additional energy demands of power generation and distribution. Development and urbanization are associated with increased electricity use, which will significantly increase primary energy demand in China and India. Figure 6 also emphasizes the scale of primary energy demand by US commercial space. Figure 7: Life cycle energy use15 End uses vary by sector, region and climate. For example, refrigeration is a major user of energy in food retailing, while non- food retail uses substantially more energy for lighting than other sectors do. Food service and food sales are high-intensity sub- sectors, but the large amount of office space means this is likely to be the greatest overall energy user. Energy use varies among residential buildings, but space and water heating are substantial components in most regions. This is true for the US despite the widespread use of energy for space cooling in hotter states. Figure 6: Primary energy (2003) 14 More than four-fifths of site energy use typically occurs in the operational phase of a building’s life, as Figure 7 shows. The proportion of energy embodied in materials and construction will rise if operational energy efficiency increases and if building life spans shorten. Figure 3: Building floor space per person (2003)11 Energy use for buildings in the US is substantially higher than in the other regions, and this is likely to continue (see Figure 4). Consumption in China and India will grow rapidly, however, and China’s building energy consumption will approach Europe’s by 2030, while India will have overtaken Japan. If current trends continue, commercial building energy use in China will more than double during this period. Energy consumption in Western Europe will rise only moderately and will remain flat in Japan. Building energy use in Brazil will grow, but will remain relatively small in 2030 compared with other regions. Figure 5: Site energy sources (2003)13 0 2,000 4,000 6,000 8,000 10,000 12,000 Commercial Residential USJapanEU-15China IndiaBrazil Pr im ar y AE C (T W h) 14 EEB Facts and Trends Summary report Local authorities Capital providers Developers Agents Owners Agents Users Designers Engineers Contractors Materials & equipment suppliers A The building market is diverse and complex. The commercial relationships between the many specialists involved are intricate and critical in sparking action on energy efficiency. The sector is characterized by the fragmentation within sections of the value chain and non- integration among them. Even the largest players are small and relatively local by international business standards, with the exception of materials and equipment suppliers. Figure 8 illustrates the most significant commercial relationships in the building supply chain. The complexity of interaction among these participants is one of the greatest barriers to energy efficient buildings. complex sector Summary The sector is characterized by fragmentation within sections of the value chain and non- integration between them. Incentives to reduce energy use are usually split between different players and not matched to those who can save the most through energy efficiency. “A single architect cannot do anything sustainable. He needs electrical engineers, structural engineers, all these professionals working together.” Architect, Brazil Local authorities influence the value chain through enacting building policies for their areas. These rules are often a compromise between high levels of energy performance and cost considerations.16 Capital providers, such as lenders or investors, are overwhelmingly concerned with the risk and return equation. They often consider only a short time period, which can reduce energy use to a relatively minor factor in decision-making. Developers are the primary actors in commercial construction and are frequently speculative, which inevitably results in a short-term focus on buildings’ financial value. Speculative developers will only be interested in Figure 8: The complex value chain Professional and Trade Responsibilities (Functional gaps) Building Delivery Process (Management discontinuities) Prelim. Design + = Detail design Working drawings & specs Tender (bidding) Planning & scheduling Construction operations CommissioningA rc hi te ct ur al St ru ct u ra l M ec ha n ic al El ec tr ic al Operational Islands (Ineffective coordination; poor communication) A complex sector 15 Figure 9 illustrates the decision-making “islands” that are typical in commercial developments. The first pyramid describes the various technical disciplines involved in the building sector. The second pyramid describes the building delivery process. Combined, the third pyramid highlights the ineffective coordination that exists because of the functional gaps and management discontinuities. There are often lengthy delays between the design stages, due to problems with planning permission, project financing or signing up of anchor tenants for commercial property. More vertical integration in the supply chain can improve energy efficiency in buildings. But fully integrated design/build projects are perceived to be more costly to implement.18 Many property developers believe competition rather than cooperation results in lower bids in a tendering process. The isolated roles and ineffective coordination between participants have two important consequences: • Incentives to reduce energy use are usually split between different players and not matched to those who can invest in and benefit from energy-saving measures. • There is normally very little opportunity for users to provide feedback through the market to developers or designers. energy efficiency if it is a significant factor in the buying decision. On the other hand, developers who hold property to receive income from tenants have a longer term view, which may make energy-saving investments attractive. But developers may not be able to reap the benefits of such investments, as energy cost saving goes to the occupier even though the developer incurs the investment cost. This weakens the incentive for energy efficiency investments. Developers commission designers (or architects), engineers and construction companies who have expertise in technical aspects of construction, including energy efficiency. But their influence on key decisions may be limited, especially if they do not work together in an integrated fashion. The role of agents can be important. They often stand between developers and tenants and between owners and occupiers. Typically, their financial interests are short-term. Owners may rent their buildings, making their interests different from those of end users. Some owners buy to sell (and make a capital return); others buy to lease (as an investment) or occupy. The last group is most likely to consider investments that may have paybacks over several years. End users are often in the best position to benefit from energy savings, but they may not be in a position to make the necessary investments. This also depends on the financial arrangements among owners, agents and users, which may include a fixed energy fee regardless of consumption. Figure 9: Players and practices in the building market17 16 EEB Facts and Trends Summary report “I think the real estate agents don’t know anything about energy efficiency. And I think the bank is a barrier, because they’re not demanding it for their loan.” NGO, US Barriers w i t h i n t h e i n d u s t r y Summary Building professionals tend to underestimate the contribution of buildings’ energy to climate change and to overestimate the cost of saving energy. Know-how and experience are lacking in these professions. Our research found four key deficiencies: personal know-how, business community acceptance, corporate conviction and personal commitment. There is a lack of leadership on building sustainability. Progress on energy efficiency depends on people in the building industry being aware of the importance of the issue, and then being able and willing to act on it. Awareness is high in most countries covered by this project, but there are significant barriers preventing widespread involvement. The EEB Project commissioned research that identified serious gaps in knowledge about energy efficiency among building professionals, as well as a lack of leadership throughout the industry. The research investigated perceptions of sustainability in relation to buildings, including the use of the terms “green” and “sustainable”. The word sustainable tends to be more prominent in Europe, while green is more suited to Asia, especially Japan. Regardless of the term used, energy costs and energy use were the highest priorities for building professionals. Their other prominent objectives were occupant well-being and productivity, conservation of water, and reducing the risks from rising energy costs. Potential future resale value and reputational benefits for companies were ranked lowest of the main factors. “I would say that a lack of in-depth understanding is a barrier, but not a lack of awareness. 100% of the developers in the United States have heard of green buildings.” Politician, US Question Awareness of environmental building issues is relatively high in all markets. But in most markets the numbers drop sharply on questions about involvement in green building activity. Typically only a third of those who said they were aware of green buildings had considered involvement, and only a third of that smaller group had actually been involved (11% of the total). Figure 13 shows the percentages of respondents who are aware, have considered it and have been involved. It also indicates the percentages at each of these stages. For example, in France 32% of those who are aware have considered sustainable building, and 30% of those who have considered it have been involved, which means only 8% of respondents have direct experience. Overall, only 13% of respondents have been involved in green/sustainable building, although this figure ranges from 45% in Germany to just 5% in India and from 20% among specifiers and developers to just 9% among owners and tenants. Awareness and involvement Aware 83% 98% 87% 79% 82% 83% 13% 64% 27% 67% 28% 28% 27% 43% 5% 13% France Germany Spain US Brazil China India Japan 8% 45% 9% 10% 9% 16% 3% 5% Considered Been involved ”What is your level of awareness of green sustainable buildings?” Figure 13: Awareness and involvement of building professional20 (Figures rounded to the nearest full number) Perception study 19 20 EEB Facts and Trends Summary report Importance of each in influencing consideration Im p act Personal know-how Business community acceptance Supportive corporate environment Personal commitment Positive climate impact Economic demand Pragmatic involvement Building attractiveness Impact of 1-point improvement in factor score on consideration score -0.5 0.0 0.5 Qualitative research found that people believe financiers and developers are the main barriers to more sustainable approaches in the building value chain. Quantitative research identified eight factors that influence decision-makers about sustainable buildings (see Figure 14). Four of these are the main barriers to greater consideration and adoption by building professionals and are the most significant in influencing respondents’ consideration of “sustainable building”: • Personal know-how – whether people understand how to improve a building’s environmental performance and where to go for good advice • Business community acceptance – whether people think the business community in their market sees sustainable buildings as a priority • A supportive corporate environment – whether people think their company’s leaders will support them in decisions to build sustainably • Personal commitment – whether action on the environment is important to them as individuals. “The biggest barrier is that investors have the final decision- making authority on buildings and, under current circumstances, they are pursuing profit maximization. Sustainable building option conflicts with profit maximization.” Academic, Japan Barriers t o p r o g r e s s Figure 14: Factors influencing adoption of sustainable building practices When asked about their responsibility in driving change, very few decision-makers saw their task as leading the move to sustainable building (see Figure 15). The answers suggest some willingness to adopt new practices, but also hint at the conservatism for which the building industry is renowned. Lack of leadership All respondents Im p act Driving/ leading adoption Adopting practices Incrementally, as soon they Are tried and tested Adopting practices incrementally, as they Become industry standard Only adopting practices as clients require it Only adopting practices as regulations require it Percentage of respondents 0% 25% 50% Figure 15: Lack of leadership Perception study 21 Question “What do you see as the role of your company in the adoption of sustainable building practices?” 24 EEB Facts and Trends Summary report Policy as a supportive framework for business levers Given a supportive policy framework, there are three approaches that can help break down the barriers: a holistic design approach, financial mechanisms and relationships, and behavioral changes. These can change the ways that the market and individuals respond, increasing the market value of energy efficient buildings, and they will enable the isolated “silos” in the building industry to work across boundaries and increase the focus on energy efficiency in several ways: • The financial community will support investments in energy efficiency. • The design community will produce energy efficient designs • The materials and equipment community will offer products and services that support those designs economically • Building owners and operators will support and value energy efficient operations • Utilities will support intelligent distribution and sustainable content of energy to and from buildings These separate elements need to work together to maximize the potential of each, supported by effective policies and regulation, as Figure 17 illustrates. Policy framework In line with business interests, a more effective policy framework for energy efficiency should cover the following: • Urban planning (see page 26) • More-effective building codes to enforce minimum required technical standards • Information and communication to overcome the lack of know- how and to highlight the energy performance of individual buildings; a combination of voluntary and mandatory schemes is already emerging, for example: voluntary labeling schemes such as CASBEE (Japan) and LEED (US) and the building “energy passport” (EU) • Incentives, including tax incentives, to encourage energy efficiency in building equipment, materials and occupant consumption • Energy pricing to make energy more valued by users, to decouple utilities’ revenues from the volume of energy supplied and to encourage local and renewable generation; for example, electricity consumers in Germany receive credit for power fed into the grid from local generation at a rate four times the cost of the electricity they use from the grid • Enforcement, measurement and verification to make sure policies and regulations (including building codes) are effective and support market measures such as trading. Holistic approach Finance Behavior Policy and regulation Figure 17: Three approaches in a supportive framework The RETREAT is a part of TERI’s GualPahari campus, about 30 km southof Delhi. It demonstrates efficient use of natural resources, clean and renewable energy technologies and efficient waste management. The 3,000 m² training center is independent of the city’s electricity grid system. The peak electricity load is only 96 kW, compared to a conventional 280 kW peak. There are three important aspects of the design: • The functionality of the building and how energy is used in it • “Passive” concepts that minimize energy demands, such as solar orientation, latticework for shading, insulation and landscaping • Space conditioning and lighting demands that are met through energy efficient systems using renewable energy sources.o Asia India TERI RETREAT Training center 2000 96kWh/m2/year En erg y efficien t b u ild in g s arou n d th e w orld TERI RETREAT, Gurgaon, India Various passive design concepts have resulted in the reduction of space conditioning loads by 10–15%: • The building is oriented along the east–west axis to have maximum exposure along north and south • Roof insulation uses vermiculite concrete and China mosaic white finish • Wall insulation uses expanded polystyrene • Part of the building is sunk into the ground to stabilize internal temperature • Shading devices and windows have been designed to cut out summer sun and to let in winter sun • Glare-free daylight has been provided, using specially designed skylights • Landscaping affects wind directions • Deciduous trees are used in the southern side of the building to shade it during summer but let in the winter sun. Energy efficient buildings around the world 25 Production - Raw materials - Fabrication - Specifications End of life - Recycling - Waste Construction - Emissions - Pollution - Security Use - Energy - Water consumption - Health - Security Lifespan & embodied energy E n c o u r a g i n g i n t e r d e p e n d e n c e w i t h a A holistic approach begins with master planning, takes the whole life cycle into account and embraces integrated building design processes. This approach is essential to maximizing the potential of individual technologies and innovations. It begins at the community planning level to gain efficiencies on a larger scale than can be achieved in individual buildings and to integrate other energy uses, such as transport. Master planning considers the community in its entirety as well as single buildings. Some new urban centers are being created from scratch with an entirely sustainable plan, like Dongtan near Shanghai, China, and Songdo, Korea. But many existing and rapidly growing cities have little room to maneuver due to existing constraints. In that case, master planning has to be implemented within the existing urban environment. Within individual buildings, efficiency is improved with a greater degree of collaboration between specialists from the earliest stages of the design process. Integration helps to adopt approaches, technologies and materials that can significantly lower energy use in buildings in economically attractive ways. Costs can be minimized with this holistic approach to integrated design and innovation. holistic approach Summary Energy efficiency in buildings should begin at the neighborhood or city planning stage. The holistic approach must consider energy use over the whole life cycle of the building. Holistic design combines different components and technology in the building in an integrated approach rather than focusing on individual elements. The building “envelope”24 is critical to energy efficient design, which also needs to integrate shade, orientation, daylight, ventilation and appropriate materials. Design should include on-site energy generation from renewable and otherwise wasted resources. Figure 18: Sources of environmental impacts in each phase of the building life cycle 26 EEB Facts and Trends Summary report Council House 2 (CH2) is a 10-storyoffice building for City ofMelbourne staff. It has ground-floor retail spaces and underground parking and was officially opened in August 2006. CH2 was designed to copy the planet’s ecology, using the natural 24-hour cycle of solar energy, natural light, air and rainwater to power, heat, cool and supply water to the building. The north façade has 10 dark-colored air ducts that absorb heat from the sun. The hot air rises, taking the stale air up and out of the building. The south façade has light-colored ducts that draw in fresh air from the roof and distribute it down through the building. The west façade has louvers made from recycled timber that move according to the position of the sun and are powered by photovoltaic roof panels. Australia Melbourne Council House 2 Office building 2006 35kWh/m2/year En erg y efficien t b u ild in g s arou n d th e w orld Council House 2, Melbourne The technologies used include: • Undulating high thermal mass concrete ceilings which improve air circulation, cooling and natural light and reduce energy demands by 14% in summer • Photovoltaic cells, which power a façade of louvers • Rooftop solar panels for water heating • Glare control throughout the building • “Shower towers” that cool water and air using low amounts of energy • A green roof space generating oxygen • Roof-mounted wind turbines that purge air during the night and generate electricity during the day • Solar shading on the exterior and interior of the building and automatic night-purge windows to cool the concrete ceilings. The building consumes approximately 35 kWh/m²/year. Compared to the previous Council building (c1970), this equals savings of: • 82% electricity consumption • 87% gas consumption • 72% mains water supply • Financial savings of US$ 1.196 million annually, including US$ 272.366 in electricity, gas and water. CH2 will pay for its sustainability features, worth US$ 9.330 million, in a decade. Energy efficient buildings around the world 29 0 5 10 15 20 25 Overall costs Energy cost HighMediumLow Eu ro /m 2/ m on th Quality 30 EEB Facts and Trends Summary report Financial considerations are critical to property development and investment, but they appear to be limiting the advance of energy efficiency. This is true of major development projects as well as smaller investments in improvements of individual buildings, including energy efficiency projects. Financial pressures have become more powerful, especially in the US, because of the rise of real estate as an investment class alongside equities and bonds and a decline in the number of owner-occupied buildings. Owner-occupiers are in the best position to make long-term investment decisions about their buildings. They will tend to have a longer term perspective and stand to benefit directly from energy savings. This applies both to owners specifying a new building that they will occupy as well as to existing owner-occupiers considering retrofitting. On the other hand, investors’ time horizons are likely to be shorter. This increases the importance for their investment calculations of the property’s residual value when they sell compared with operational returns during their ownership. In any case, energy costs are often hidden in operational costs and not considered by most investors. There is some evidence that an energy efficient building can command a premium, and this may increase as awareness of climate change and expectations of rising energy costs leads people and organizations to attach more value to energy efficiency. A McGraw-Hill study26 reported that professionals expect “greener buildings” to achieve an average increase in value of 7.5% over comparable standard buildings, together with a 6.6% improved return on investment. Average rents were expected to be 3% higher. In the US, buildings with high energy performance are becoming more attractive financially because of markets for renewable energy (in 20 states as of mid-2007) and energy efficiency credits (10 states). Summary Energy is a small proportion of cost for most decision-makers in the building value chain. The cost of energy efficiency is typically over-estimated. Reliable data are often lacking. A more sophisticated risk- management model may be necessary to assess building energy investments. New business models can help to increase the focus on energy efficiency and drive investment. “Investors and developers would gladly invest in sustainable building if it is made clear that construction of sustainable building generates high asset value in the future, and also contributes to profitability.“ Academic, Japan Energy cost significance Energy is typically a small proportion of total occupancy costs for buildings. Real estate managers at the EEB’s financial hearing in Zurich said that energy costs were too low to be a driver for energy efficiency (see Figure 20). For example, in a high-quality office building in Germany, heating and electricity made up less than 5% of the total operating cost of the building, including rent and maintenance (about €1.1 of out of every €23.3 spent). The demand for higher quality office buildings will further decrease the importance of energy costs. High-quality buildings have higher operating and energy costs, but the energy proportion decreases relative to the total, as Figure 21 shows. Figure 21: Energy and total costs by quality of fittings27 based on 397 buildings with 6 million m2 in 2006 P r o v i d i n g financial information and mechanisms Providing financial information and mechanisms 31 The cost of achieving energy efficiency EEB research (reported on pages 16 and 17) found that perceptions of the cost necessary to achieve greener buildings are likely to be significantly higher than the actual cost. The average perception was a 17% premium, but cost studies on actual properties have shown much lower figures. For commercial properties, the Fraunhofer Institute has shown that the energy demand of new office buildings can be reduced by 50% compared with the existing building stock without increasing construction costs.28 The US Green Building Council has performed numerous studies and concluded that the cost of reaching certification under its Leadership in Energy and Environmental Design (LEED) standards system is between zero and 3%, while the cost of reaching the highest level of LEED (platinum) comes at a cost premium of less than 10%. These figures are supported by a study of 40 US offices and schools that found cost premiums substantially lower than professionals’ estimates revealed in this project’s research (16% for US).29 A more comprehensive study by Davis Langdon Adamson, a construction management services firm, confirmed these broad conclusions but with an important caveat: location and climate are more important than the level of energy efficiency to the ultimate cost. The survey looked at more than 600 projects in 19 US states and examined the impact on cost of location and climate. Figure 22 shows the additional cost necessary to meet the relevant LEED level. This analysis shows that variations between cost premiums in different Appropriate commercial relationships can increase the focus on energy costs and avoid the split incentive problem. ESCOs are one example. ESCOs engage in energy performance contracting – an arrangement with a property owner that covers both the financing and management of energy- related costs. Initial investment and life-cycle cost considerations are taken on by the ESCO. These companies generally act as project developers for a wide range of tasks and assume the technical and performance risks associated with the project. An ESCO develops, installs and finances projects designed to provide energy at a contracted level and cost, usually over 7–10 years. Its compensation can be linked directly to the amount of energy that is actually saved. 0% 2% 4% 6% 8% 10% 12% Platinum Gold Silver Houston, TXBoston, MADenver, COMerced, CASan Francisco, CAUCSB, CA C os t p re m iu m b y lo ca tio n & L EE D le ve l Energy Service Companies (ESCOs) locations can be more pronounced than the cost differential between different levels of environmental performance. Retrofitting energy efficiency in existing buildings can also be cost-effective. Research for the IEA on high-rise apartments in the European Union concluded that substantial energy savings could be achieved in hot and cold climates, with significant net cost savings.30 As much as 80% of heating energy was saved in the least efficient buildings, with an overall 28% energy saving. The study showed that retrofitting was most cost- effective when carried out as part of general refurbishment. Information While energy costs are a relatively small part of total occupancy costs, they are the most important to gain energy efficiency. Profitable opportunities for energy savings are often overlooked because of inadequate cost information. Despite the stated interest of real estate managers in energy efficiency, a study in 2007 found that only two-thirds of the companies tracked energy data and only 60% tracked energy costs.31 Only 30% of real estate managers or facilities managers claimed to have included energy efficiency requirements in requests for proposals. Research by the Green Building Finance Consortium in the US indicates that owners and developers often do not provide appraisers with sufficient data to allow a thorough assessment of the costs and benefits of energy efficiency strategies. Too much reliance is placed on “first cost”, the initial investment required, rather than life-cycle cost assessments and return-on- investment calculations. Energy managers and investment decision- makers need to develop a common methodology and language for valuing energy efficiency projects in a similar manner to other investments. A financial risk management model32 would identify: • Energy consumption elements directly affected by changes within the facility (intrinsic volatilities), which includes the energy volume risk, asset performance risk and energy baseline uncertainty risk • Energy consumption risks outside the facility that could be hedgeable (extrinsic volatilities), which includes energy price risk, labor cost risk, interest rate risk and currency risk. Such a risk management framework would allow energy efficiency experts and investment decision-makers to exchange the information they need to expand investment into energy efficient buildings projects. Figure 22: Costing Green: A Comprehensive Cost Database and Budgeting Methodology; Davis Langdon Adamson; Lisa Fay Matthiessen, Peter Morris (2004) 34 Technology available today can achieve dramatic improvements in building energy efficiency, but market failures and behavioral barriers are blocking progress toward the EEB vision of zero net energy. The challenge in this first phase has been to understand those impediments. In the next phase the project will explore ways to overcome them and develop a roadmap with practical measures that businesses can implement. Complexity and segmentation The building industry and the market are highly complex. Different approaches will be needed for different segments and sub-sectors. Each sub-sector (e.g., offices, hospitals, retail, apartments, detached houses) may have its own particular characteristics, and the project will develop sector-specific analyses in the next phase. At this stage the conclusions are concerned with the building market as a whole. Use less, make more, share There are three key elements to achieving zero net energy: • Use less energy • Make more energy (locally) • Share surplus energy (through an intelligent grid). The most significant, long-term gains will come from using less energy. Risks and opportunities There are market and operational risks for businesses and there are opportunities. There will be substantial market demand for energy efficiency, but the timing and the value proposition are uncertain. Businesses that enter the energy efficient building market early could achieve first-mover advantages. Conclusions a n d n e x t s t e p s 2007 Phase 1 Use scenarios analysis to evaluate path options for zero net energy buildings Phase 2 Assess needed changes in policy, technology (holistic design), finance, and behavior that impact business model outcomes 35 Barriers The EEB’s perception research found high levels of awareness of the issue of sustainable building but low levels of specific knowledge and involvement. It identified three key barriers to implementation: • Lack of information about building energy use and costs • Lack of leadership from professionals and business people in the industry • Lack of know-how and experience as too few professionals have been involved in sustainable building work. Levers for change Appropriate policies and regulations are necessary to ensure that the right conditions are in place for the market to work effectively. Given an appropriate policy framework, there are three broad business levers that can help remove the barriers to building energy efficiency: • Adopt a holistic approach. this is essential to integrate individual technologies and innovations • Make energy in buildings more valued by developing incentives, new commercial relationships and financial mechanisms, and clearer information about building energy performance • Educate and motivate building professionals & users in order to encourage behaviors that will respond more readily to market opportunities and maximize the potential of existing technology. Next steps In its next phase, the EEB Project will explore how these levers can be developed. First, the group will create scenarios to evaluate paths toward zero net energy. These will help identify the changes needed in building industry approaches, finance and behavior that will create the necessary levers. The EEB will then develop a preliminary action plan that will be used to influence policy- makers and stakeholders. These steps are shown in the illustration below. In the final phase the plan will lead to a call for action by all those involved with the building industry. > 2008 Phase 3 Draft preliminary roadmap action plan that outlines critical actions to take in each building sector in the value chain Phase 4 Create the plan to reach out to influence policy-makers and other stakeholders in reaching EEB targets The EEB Core Group t h e p r o j e c t LAFARGE and United Technologies Corporation chair the EEB Project and 8 companies make up the Core Group. They adopted a multi-faceted approach to understanding and analyzing the issues, including several hearings and meetings with experts. This included commissioning a perception study to identify the attitudes, knowledge and understanding among professionals and opinion leaders, as well as the readiness to adopt more 36 Actelios Creating value through development, within renewable energy sources, of innovative and competitive projects that offer solutions to the environmental issues affecting the community as well as specific fields of industry in accordance with the principles of sustainable development: this is the Actelios mission. Actelios is a member of the Falck Group, a major player on the Italian industrial scene for over a century. It is the only Italian listed company whose core business is power generation from renewable sources. Actelios builds and operates electrical and thermal energy plants through the use of renewable sources, including biomass, household and special waste, and the sun, among others. The Kyoto Protocol guidelines require that signatory states, including Italy, drastically cut their CO2 emissions, the leading cause of climate change. Renewable sources, like those used by Actelios, play an increasingly crucial role in achieving the Protocol’s objectives. CEMEX CEMEX works together with its customers and communities to provide integral sustainable building solutions that contribute to lower overall Greenhouse gas (GHG) emissions. These solutions consists of: financing, design, planning support, as well as our products. They offer our customers practical and readily applicable products, that are: economically feasible, can be used in mass scale, are durable, have better insulation properties, and provide comfort and reduce energy consumption for heating and cooling. CEMEX also contributes to reducing GHG emissions in our cement production facilities; from 1990 to 2006 we achieved an 11% reduction in our CO2 emissions. Our target is to reduce them up to 25% by 2015. DuPont DuPont is committed to sustainable growth. We believe that what is good for business must also be good for the environment and for people everywhere. DuPont has been taking actions to reduce greenhouse gas (GHG) emissions in our own operations since 1991. Over this period, we have reduced our global GHG emissions by 72%, while saving energy worth $3 billion. By 2015, DuPont will further reduce our GHG emissions at least 15% from the 2004 level. We are also committed to growing revenues from products that create energy efficiency and/or significantly reduce greenhouse gas emissions for our customers. EDF The EDF group is an integrated European energy supplier that has a long- standing commitment to sustainable development. EDF is significantly increasing investments in renewable energy (wind, solar, hydraulic) to further improve its low carbon profile. This will amount to €3 billion investment out of a €40 billion, 5-year investment program. A third of its annual expenditures in R&D is related to environmental work. EDF also offers commercial energy efficiency services such as insulation, wood & solar energy, heat pumps. LAFARGE World leader in building materials, LAFARGE has pursued its goal in the context of a sustainable development strategy for years, incorporating economic, social and environmental concerns. LAFARGE has been able to reach a 14.2% reduction of its CO2 emissions, on track to keeping its voluntary commitment of reducing the group’s worldwide CO2 emissions by 20%. LAFARGE is the only company in the building material sector that is listed in the 2007 “100 Global Most Sustainable Corporations in the World”. United Technologies United Technologies, a diversified technology company based in Hartford, Connecticut, has been measuring its environmental progress for more than a decade and regularly sets aggressive company-wide goals to reduce impacts. From 1997 to 2006 the company reduced its energy consumption, measured in BTUs, by 19 percent while the company doubled in size. It also invests in energy conservation projects and co-generation systems at many of its global facilities, including a LEED Gold building for its Otis China operations N o t e s 1 For the EEB project, the “building industry” covers all buildings and all those involved in the value chain – from architects and property developers to occupiers. 2 Quotes are from EEB project perception research unless otherwise stated. 3 Enkvist, Per -Anders, Tomas Nauclér, and Jerker Rosander “A cost curve for greenhouse gas reduction”. The McKinsey Quarterly. Number 1. 2007. 4 The factors in this assessment are based on Michael Porter’s Five Forces – see www.quickmba.com/ strategy/porter.shtml 5 Primary energy includes the energy required to generate, transmit and distribute electricity, as well as energy directly consumed on site. 6 International Energy Agency. World Energy Outlook 2006. 2006. 7 International Energy Agency and TIAX analysis. US Census 2006. 8 Data for India and Brazil are not available in comparable format. 9 Chinese Ministry of Construction representative at the EEB China Forum. 10 US Energy Information Administration. Annual Energy Outlook 2006. 2006. International Energy Agency. Light’s Labour’s Lost – Policies for Energy efficient Lighting. 2006. Price et al. Sectoral Trends in Global Energy Use and Greenhouse Gas Emissions. Lawrence Berkeley National Laboratory. 2006. Yamashita, Yukari. “Residential Statistics in Japan”. Institute of Energy Economics Japan. 2001. 11 US Energy Information Administration. Annual Energy Outlook 2006. 2006. International Energy Agency. Light’s Labour’s Lost – Policies for Energy efficient Lighting. 2006. Price et al. Sectoral Trends in Global Energy Use and Greenhouse Gas Emissions. Lawrence Berkeley National Laboratory. 2006. Yamashita, Yukari. “Residential Statistics in Japan”. Institute of Energy Economics Japan. 2001. US Census 2006. 12 US Energy Information Administration. International Energy Outlook 2006. 2006. 13 International Energy Agency. “Energy Statistics and Energy Balances”. 2003. International Energy Agency. “Energy Technology Perspectives 2006: Scenarios and Strategies to 2050.” 2006. 14 International Energy Agency. “Energy Statistics and Energy Balances”. 2003. TIAX analysis based on the International Energy Agency’s “Energy Technology Perspectives 2006: Scenarios and Strategies to 2050.” 2006. 15 Building & Environment. Vol. 32. No. 4, pp. 321–329. 1997. 16 Reed, John H., Katherine Johnson, Jeff Riggert and Andrew Oh. “Who Plays and Who Decides.” Innovologie. US Department of Energy Report: DE-AF26- 02NT20528. 2004. Page xiii. 17 Mattar, S.G. “Buildability and Building Envelope Design”. Proceedings, Second Canadian Conference on Building Science and Technology, Waterloo, Nov. 1983. 18 Reed, John H., Katherine Johnson, Jeff Riggert and Andrew Oh. “Who Plays and Who Decides.” Innovologie. US Department of Energy Report: DE-AF26- 02NT20528. 2004. 19 Source of figures 10–15: Lippincott research. 20 The results in Japan are particularly interesting – 13% awareness of green/sustainable buildings compared to an average for other regions of 84%. This is odd given that its building energy use is the lowest of the developed countries. 21 UNEP SBCI, quoted at the Brussels Forum. 22 IEA. World Energy Outlook 2004. 2004. 23 www.ecorating.co.uk. 24 The envelope is the structure that encloses the internal space and separates it from the exterior. 25 US Department of Energy. 2004 Buildings Energy Databook. 2004 26 McGraw-Hill Construction. Green Building SmartMarket Report 2006. 2005. 27 Jones LaSalle GmbH. CREIS. 28 Herkel et al. Energy Efficient Office Buildings – Results and experiences from a research and demonstration program in Germany. Building Performance Congress 2006. See www.enbaumonitor.de. 29 Greg Katz. CapitalE, Economic Costs and Benefits of Green Buildings. 30 International Energy Agency. Information Paper. “High-Rise Refurbishment: The Energy- Efficient Upgrade of Multi- Story Residences in the European Union”. 2006. 31 CoreNet Global. 2007. 32 Millsa, Evan, Steve Kromerb, Gary Weissc and Paul A. Mathew. “From volatility to value: analysing and managing financial and performance risk in energy savings projects”. Energy Policy. Vol. 34, issue 2, pp. 188–199. January 2006. 33 Anna-Lisa Linden et al. “Efficient and inefficient aspects of residential energy behaviour: What are the policy instruments for change?” Energy Policy. Volume 34, issue 14, pp. 1918-1927. September 2006. 34 La Revue Durable. No. 2. November-December 2002. 35 Waide Proceedings of the 2001 ECEEE Summer Study on Energy Efficiency, Vol 2. Paris: European Council for an Energy efficient Economy 2001. 36 Pers. Comm. with Gavin Killip, Environmental Change Institute, Oxford, mentioning the “40% House” report made with Brenda Boardman. 37 UK Energy Research Centre, International Energy Agency and International Resource Group. 38 Anna-Lisa Linden et al. “Efficient and inefficient aspects of residential energy behaviour: What are the policy instruments for change?” Energy Policy. Volume 34, issue 14, pp. 1918-1927. September 2006. 39 George, Karen, Lynn Fryer Stein. In-Home Display Units, Tools for Conservation and Demand Response. Energy Insights. 2005. 40 Ueno, Tsuyoshi (Central Research Institute of Electric Power Industry), Kiichiro Tsuji (Osaka University) and Yukio Nakano (Central Research Institute of Electric Power Industry). “Effectiveness of Displaying Energy Consumption Data in Residential Buildings: To Know Is to Change”. American Council for an Energy-Efficient Economy (ACE3) Summer Session Proceedings. 2006. Copyright © World Business Council for Sustainable Development, October 2007 ISBN 978-3-940388-12-4 Paper Containing 50% recycled content and 50% from mainly certified forests (FSC and PEFC). 100% chlorine-free. ISO 14001 certified mill. Disclaimer This report is released in the name of the WBCSD. Like other WBCSD reports, it is the result of a collaborative effort by members of the secretariat and executives from several member companies. A wide range of members reviewed drafts, thereby ensuring that the document broadly represents the majority view of the WBCSD membership. It does not mean, however, that every member company agrees with every word. Photo credits Page 1 LAFARGE Page 4 K. Marius Gnanou, F. Moriconi- Ébrard Page 7 Roland Hartz Page 8 Shell solar Page 9 Elsamu Page 12 Climate zones Kottek, M. J. Grieser, C. Beck B. Rudolf F. Rubel 2006 Page 12 CA academy Agaharn, Hert Tower Robert Newell Niesen, BedZed Hillfire, Federal building San Francisco Formwerks, Community Center Kunming China Shigeru Ban Page 13 Urban development UN 2002 F. Krass R. Spohner, Transport hub China Tresuresthouhast, Dongtan Arup, Cosmo city South Africa LAFARGE Page 25 TERI retreat India TERI Page 28 Passivhaus Garrick Jones Page 29 Council House 2 Australia Ben Roberts. The World Business Council for Sustainable Development (WBCSD) brings together some 200 international companies in a shared commitment to sustainable development through economic growth, ecological balance and social progress. Our members are drawn from more than 30 countries and 20 major industrial sectors. We also benefit from a global network of about 60 national and regional business councils and partner organizations. Our mission is to provide business leadership as a catalyst for change toward sustainable development, and to support the business license to operate, innovate and grow in a world increasingly shaped by sustainable development issues. Our objectives include: Business Leadership – to be a leading business advocate on sustainable development; Policy Development - to help develop policies that create framework conditions for the business contribution to sustainable development; The Business Case - to develop and promote the business case for sustainable development; Best Practice - to demonstrate the business contribution to sustainable development and share best practices among members; Global Outreach – to contribute to a sustainable future for developing nations and nations in transition. 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