Budget Cuts and the Financial Bailout Could Imperil Energy Dept.'s $1 Billion Program
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| President George W. Bush signs into law the Energy Independence and Security Act of 2007, Dec. 19, 2007, at the U.S. Department of Energy in Washington, DC. White House photo by Joyce N. Boghosian |
Cutting the ribbon on its new Zero-Net Energy Commercial Building Initiative (CBI), the U.S. Department of Energy (DOE) has assembled an entourage of real estate companies, retailers and banks that will pursue aggressive energy reductions in their buildings with the help of the government.
The private-public partnership is seen as the first step toward proving the viability of zero-net energy buildings -- those that produce as much energy as they consume by offsetting their energy use through a combination of energy efficiency and renewable power.
The goal of CBI is to make zero-net energy buildings broadly achievable by 2025. But to do this, the government must determine how to make the technology behind such buildings financially feasible for the marketplace.
The first phase of the initiative, a five-year program known as the National Collaborative on Building Technologies (NLCBT), targets energy reductions by 50 percent in new buildings and 30 percent in existing buildings over established baselines.
But even as the initiative prepares to launch, new economic concerns and mixed signals from the Bush Administration have raised concerns over the government’s willingness and or ability to fund green building R&D programs like CBI.
"This is an area that’s been lacking -- having a commitment from the federal government to support green technologies," said Dan Young-Dixon, director of national design for Opus Architects & Engineers, one of the real estate firms participating in the initiative.
"This is a wonderful first step. I’m surprised that anything happened with the current administration," he added.
DOE has committed $15 million in funding that will flow through two national laboratories -- the Pacific Northwest National Laboratory (PNNL) and National Renewable Energy Laboratory (NREL) -- to guide and support the participants.
The real estate companies involved in the program are CB Richard Ellis, Forest City Enterprises, Hines, InterContinental Hotels Group, The Opus Group, ProLogis, Regency Centers, Ryan Companies US, Simon Property Group, Tishman Speyer and The Westfield Group.
Also participating are financial services firms Bank of America and PNC Financial Services Group, and retailers Best Buy, JCPenney, John Deere, Macy’s, SuperValu, Target, Toyota and Whole Foods Market.
Though the collaborative is expected to produce a handful of low-energy buildings, its bigger goal is to provide a testing ground for energy-saving -- and hopefully cost-saving -- processes and procedures that would accelerate the development of zero-net energy buildings.
"We recognize that what’s currently being accepted [as green building design measures] by the marketplace isn’t cutting edge," said Sarah Martinez, a sustainability analyst for the industrial REIT ProLogis. "This is an excellent opportunity to take a hard look at our building design and assess it in a way that we wouldn’t otherwise be able to."
The targeted energy cuts in the program’s initial phase are not expected to pose serious problems for participating companies, many of which already have energy efficiency and green building programs in place. Some have taken significantly larger steps.
For instance, Opus Group will complete an addition to its suburban Minneapolis headquarters next year that uses geothermal energy, enabling the building to approach the 50 percent energy-reduction mark. ProLogis is building all of its new warehouses to the U.S. Green Building Council's (USGBC) LEED specifications, and JCPenney said this summer it will earn the government’s Energy Star label at 200 stores and install wind and solar power systems at other sites.
PNC is building the first LEED-Platinum office building in Washington, DC, while Bank of America is almost ready to move into its new headquarters in Manhattan, one of the greenest commercial towers in the world.
But for all their achievements, none of the companies has come close to developing a net-zero energy building.
Energy efficiency measures can lower energy use in buildings drastically, but net-zero energy buildings require significant amounts of renewable power, such as wind, solar and geothermal, that are currently difficult and expensive to implement. "The real issue will be [the decision] to support onsite energy development or the use of green power that’s created offsite," said Young-Dixon. "It’s a huge step."
Needed: a "Focused, Sustained Effort"
A study on energy efficiency published last month by the American Physical Society (APS) found that the widespread construction of zero-net energy buildings is attainable in 15 to 25 years, but only with a "focused, sustained effort" from the government.
That sort of effort hasn’t been evident recently. According to the APS study, the federal government invests less money today in green building research and development (about $100 million annually) than it did more than 20 years ago when it contributed $250 million annually, adjusted to today’s dollars.
And several issues are emerging that could undercut CBI, even as the Bush Administration and both presidential candidates have promised to make energy efficiency a high priority.
President Bush signed CBI into law in December as part of the Energy Independence and Security Act of 2007, which also raised fuel economy standards on automakers. Federal funding for the program is authorized at more than $1 billion over the next 10 years.
But in his 2009 budget request, the President proposed a 27 percent cut in funding for DOE’s Energy Efficiency and Renewable Energy Office -- the agency arm that is overseeing CBI -- as well as funding cuts to Energy Star, the popular energy benchmarking and efficiency recognition program created during the Clinton Administration.
And most experts agree that the massive, taxpayer-funded bailout approved this month by Congress will restrict spending in the next administration, although to what degree remains a question mark.
Senators John McCain and Barack Obama, the Republican and Democratic presidential nominees, have both proposed billions of dollars of new investment in energy programs, but have declined to say how the bailout might affect their spending.
"Both candidates have been very strong on the importance on energy efficiency," said Burton Richter, the Nobel Laureate and former director of DOE’s Stanford Linear Accelerator Center who chaired the study group for the APS report.
"On the one hand, as long as energy supply costs remain high, there’s going to be a strong push for energy efficiency. But the huge amounts of money that we’re spending to bail out Wall Street and the banks are going to put some constraints on what the feds are going to do," he said.
Richter, a past president of APS who has spent the last decade engaged in energy issues, also cautioned against using the popular LEED green building rating system as a bar for energy efficiency, or as a means to achieve zero-net energy buildings.
The APS report explored a recent study by the New Buildings Institute (NBI) that found LEED buildings were 25 percent to 30 percent more energy-efficient than the average new commercial building. But APS concluded that the LEED buildings in that study actually consumed more total energy per square foot than average commercial buildings: a finding Richter called "startling."
"LEED is focused all sorts of other environmental issues. It’s a very good program," he said. "But very little in the total LEED score comes from efficiency."
Cities such as San Francisco that lobbied hard to mandate LEED for new government buildings, private real estate development, or both "don’t know what they’re doing," Richter said.
"[San Francisco city officials] cities think that they’re getting energy efficiency by mandating that all new commercial buildings starting in 2012 have to be LEED certified," Richter said, referring to a law passed there this summer. "But right now, you can get LEED Platinum by only having two points for energy efficiency. And if it was two years ago, you could get LEED Platinum without having any points for energy efficiency."
The gap in energy efficiency is most apparent in the LEED for New Construction (LEED-NC) platform, which was designed by architects and engineers and applies to new buildings (LEED platforms for existing buildings give energy efficiency more weight).
To achieve zero-net energy buildings, building designers may need to do a better job working with other industry segments, such as owners and property managers, to understand how their buildings are operated: a process the APS report calls integrated design. Failing to do so, the report says, can have negative effects on energy efficiency.
Richter was recently reminded of its importance. Sitting in the office of a business executive in Washington, DC, he said he commented on the fact the overhead lights in the office were on, despite an abundance of natural light from the office windows.
"I got a startled response. And I said, 'you don’t have any sensors on the lights. In fact, you don’t even have a light switch so you can turn them off.'
"That needs to be built into the design of buildings," Richter said. "Educational programs should be aimed at the architects and the builders, as well as the operators."