Wilshire Center/Koreatown

Green Building Retrofit Program

Presented by : Caroline Sim Doug Nordham, P.E. Gary Russell, AIA Christine Magar, AIA, LEED AP David Hodgins, LEED AP CRA/LA Arup WCBIC Greenform Clinton Climate Initiative March 3, 2011

• Introductions of Program Team • Program Goals and Objectives • Program Process and Steps • Opportunities and Benefits for Participants • Case Studies and Examples • How Do You Get Started?

Agenda

• Doug Nordham, P.E. , Arup –

Program Manager

• Gary Russell, AIA, WCBIC –

Community Liaison

• Christine Magar

,

AIA, LEED AP

,

Greenform –

Sustainability Consulting

•

David Hodgins, LEED AP, Clinton Climate Initiative

–

Financial Strategy

Program Team Members

Did you know?

Buildings in the U.S. account for

40% 72% of U.S. primary energy consumption of U.S. electricity consumption 40% of U.S. GHG emissions generation 48% Including building construction and embodied energy

Goals and Objectives

Why are existing buildings an important part of energy and carbon reduction?

“And with 50-70% of existing buildings expected to still be in use in 2050, reducing energy demand by retrofitting existing stock will be a key policy instrument.” Mark Watts, Clinton Climate Initiative “As newer net zero buildings come on line, existing building stock will find it more difficult to compete with these new, more resource efficient buildings. They need to adapt, or they could become obsolete.” Dr. Jean Rogers, Nick Offer. “High Performing Property Portfolios.”

A 2 Magazine Issue 7

: 18-19. Arup

Goals and Objectives

The Program Goals include the following:

• WCBID Cool District Program target of 80% Carbon reduction by 2050 • Provide FREE building energy assessments to eligible building owners • Through the assessments, identify the feasible energy reduction projects and package those that will provide less than a 3 year payback • Work with potential Energy Project Lenders to bring “packaged” financing options to the building owners • Create an ongoing Program structure that will last for several years and be self-funding and sustaining

Goals and Objectives

Why provide FREE Building Energy Assessments?

A Lawrence Berkeley National Lab study of 60 buildings of different types showed that: • Over 50% had control problems • 40% had HVAC equipment problems • 15% had missing equipment • 25% had BAS with economizers, VFDs, and advanced applications that were simply not operating correctly.

Savings from Energy Assessments • Value of Energy Savings: $0.11 ‐ $0.72/sq. ft.

• Value of Non ‐ Energy Savings: $0.10 ‐ $0.45/sq. ft.

Source: Assoc. of State Energy Research Technology Internships and US Department of Energy

Goals and Objectives

Building Energy Assessments – The Process Preliminary Assessment Review of Opportunities Investment Grade Audit Financing and Design Project Implementation A Building Energy Assessment is a structured process that identifies viable and beneficial energy reduction/management opportunities within a particular facility.

Building Energy Assessments: Aligning Goals with Information

Information Sources

Building Operations & Maintenance Budget Building Management Systems Preliminary Assessment

Goals

Improving Operations & Maintenance Reduced Operating Cost Review Opportunities Energy Usage Data Building Documents

Identify Viable EE Measures

Improving Existing Assets Reduce Energy & Carbon Investment Grade Audit Financing & Design Staff & Tenant Discussion Capital Replacement Budget Upgrade Building Systems Improve Tenant Comfort Project Implementation

What’s Included in a Building Energy Assessment?

•Review building utility bills •Conduct site walkthough and equipment inventory •Identify potential energy efficiency measures •Calculate energy and cost savings • Analyze economics and return on investment • Consider incentives and tax credit opportunities • Determine measure costs and economics Program Process and Steps

Typical Building Energy Assessment Results ENERGY BASELINE SCHEDULING/ENABLING CONTROLS PROBLEMS ECONOMIZER/OUTSIDE AIR LOADS EQUIPMENT EFFICIENCY IMPROVEMENTS PLANT OPTIMIZATION SYSTEM / ZONE OPTIMIZATION TOTAL ENERGY SAVINGS (Average 25-35%) Reference LBNL IMPLEMENTATION COST

Program Process and Steps

Typical Building Energy Assessment Results ENERGY BASELINE SCHEDULING/ENABLING RETURN ON INVESTMENT avg = 3 Years CONTROLS PROBLEMS ECONOMIZER/OUTSIDE AIR LOADS EQUIPMENT EFFICIENCY IMPROVEMENTS PLANT OPTIMIZATION SYSTEM / ZONE OPTIMIZATION TOTAL ENERGY SAVINGS (Average 25-35%) Reference LBNL DIMINISHING RETURNS IMPLEMENTATION COST

Program Process and Steps

Building Energy Assessments – The Process

Go forward with EE Projects?

Preliminary Assessment Review of Opportunities Investment Grade Audit Financing and Design Project Implementation

Program Process and Steps

Energy Project Financing

• What is It?

• What can we typically finance?

• What types of financing are available?

• Considerations and risks • Typical Results

Preliminary Assessment Review Opportunities Investment Grade Audit Financing & Design Project Implementation

Program Process & Steps

• • • •

What is it for?

– Approach for financing capital cost of energy efficiency retrofit projects

How does it work?

– Energy cost savings provide a cashflow to repay the loan

What to Finance?

– Energy Efficiency Measures (can include water)

What types available?

– – – – – Grants Incentives (especially utility and State) Banks/Lenders Energy Service Companies Self-Funded

Energy Project Financing

Types of Energy Project Funding

• • • • • Grants – typically lower amounts to fund pilots, research, or seed money – limited with great effort Incentives – Typically retroactive from Utilities, and Local, State, and Federal Government tax breaks Self-Funding – Savings from early investments that have quickest payback (< 1 yr) fund additional efficiency investments Bank/Lender Funding – Borrow money at standard interest rates to invest in energy measures ESCO – Loans money for investment, manages implementation, paid for by energy savings Energy Project Financing

Typical Savings with Energy Efficiency Investments Self Funded $25M Investment @ 25 - 35% Savings

100 90 80 70 60 50 40 30 20 10 0 -10 0 Cumulative EE Savings Business as Usual Energy Efficient Cost Series3 Efficiency Savings Investment 1 2 3 4 5 $75 Million Cumulative Savings in 13 Years 6

Years

7 8 9 10 11 12 13 Energy Project Financing

ESCOs (Energy Service Companies)

• • • • • • One stop shop for funding and implementation Contract based, with payments and profit from utility cost savings Traditionally focused on “low hanging fruit” Early ESCO (90s) contracts were heavily slanted towards ESCO and along with above tendency created a poor impression and reduced savings ESCO work with the government has forced contracts to be more fair Pro-active third party audits and consulting can also improve ESCO results Energy Project Financing

Energy Efficiency Benefits for the Building Owner

• Extended Equipment Life----Lower Repair and Maintenance Costs • Increased Thermal Comfort----for (happier) Tenants • Improved Indoor Air Quality----for (happier) Tenants • Reduced Operating/Energy Costs Energy demand reduction • Increased Safety/Reduced Liability Efficient supply •Greater Building/Asset Value •Pre-requisite to Renewable Energy Renewable energy Owner Opportunities and Benefits

Case Study: UCSF Mt Zion Research Center

Arup’s energy consultants reduced energy usage at UCSF’s most energy intensive research laboratory, bringing it into line with similar facilities and saving $354,573 per year , a 36% reduction in annual energy costs, and a simple project payback of 0.6 years. Awarded UC’s “best practice” award in 2009.

Total Cost/Benefit Energy Savings - $354,573 Implementation Cost - $710,000 Simple Payback – 0.6 years after incentives CO 2 Reduction Electricity and Natural gas reduction by 29% Case Study

Case Study: Time Equities, Inc. – Audit

Arup’s energy audit for Time Equities, Inc. highlights how improving energy efficiency not only reduces a building’s operational costs but also enables corporations to achieve their sustainability related goals, such as reducing their carbon footprint.

Total Cost/Benefit Energy Savings - $295,000 Simple Payback – Less than 5 years CO 2 Reduction Annual reduction in CO 2 emissions is estimated at 1,165 klbs. Per year, a 40% reduction.

Case Study

Case Study: Pfizer Global R&D Campus

Arup’s energy consultants conducted a major energy assessment for Pfizer. As a result of the study, Arup identified and managed implementation of energy efficiency measures, resulting in savings of over $1 million per year with a simple payback period of less than 6 months and reduction of 5,000 tons of CO 2 annually.

Total Cost/Benefit Energy Savings - $1,023,913 Implementation Cost - $380,500 Simple Payback – 0.38 years CO 2 Reduction 5,000 Tons of CO2 reduced annually 20% energy reduction

Case Study

How do you get started?

1.

2.

3.

4.

5.

6.

7.

Contact WCBID or Arup to request your FREE Building Energy Assessment If your building is selected, we’ll schedule a meeting and site visit with you We’ll evaluate your building and then meet to discuss results and future options If appropriate, conduct the IGA.

Arrange Project Financing Install energy efficiency measures Receive cost savings and other benefits!

Next Steps

Discussion and Questions

Caroline Sim Doug Nordham Gary Russell Christine Magar David Hodgins THANK YOU CRA/LA – 213.368.0651 – [email protected]

Arup – 310.578.4400 – [email protected]

WCBIC – 213.487.7003 – [email protected]

Greenform – 323.464.2002 – [email protected] Clinton Climate Initiative - [email protected]