SPARK16 Presentation: Measuring for Results: Data and the Changing Energy Landscape

Measuring for Results: Data and the Changing Energy Landscape

Cliff MajersikExecutive Director

Institute for Market Transformation (IMT)

Measuring for Results: Data and the Changing Energy Landscape

Cliff Majersik

Spark16Atlanta

Sept. 15, 2016

Money saved • U.S. spends $400B+/year

Infrastructure investment • $279B+ retrofit potential

Local job creation • 3.3million cumulative job

years

Market Potential

Brazil

Germany

India

U.S. Buildings

China

0.0 20.0 40.0 60.0 80.0 100.0 120.0

Buildings in the U.S. use more energy than most countries use and account for 40% of U.S. carbon emissions

2011 Total Primary Energy Use (Quadrillion BTU)

Why Buildings Matter

In large cities with significant public transportation, buildings typically account for 70% or more of CO2 emissions and energy usage.

DISTRICT OF COLUMBIA

Buildings (74%)

Transportation (22%)

Waste (2%)

Metro transit (2%)

NEW YORK CITY

Buildings (75%)

Transportation (20%)

Solid waste, wastewater

and fugitive (5%)

BOSTON

Buildings (71%)

Transportation (29%)

CHICAGO

Buildings (70%)

Transportation (21%)

Other (9%)

Why Buildings Matter

Buildings (74%)

Buildings (75%)

Buildings (71%)

Buildings (70%)

Why Buildings Matter

Transportation and Others

34%

Buildings66%

City of AtlantaEnergy Consumption

Transporta-tion and Others

42%

Buildings58%

City of AtlantaCO2e Emissions

ENERGY STAR as Industry Standard

ENERGY STAR as Industry Standard

Through 2014:More than 400,000 properties benchmarking energy use More than 25,000 properties are ENERGY STAR certified

Average 2.4% annual energy consumption reduction over 3-year period.

Utility expenditures reduced by about 3%.

77% facility managers in NYC surveyed made operational changes in response to benchmark and transparency. 75% installed new energy-efficient equipment.

Energy + Cost Savings

Current Landscape(see buildingrating.org)

U.S. Benchmarking Policy Landscape: Flagship Policies, 7 Billion Sq. Ft. of Commercial Space

How the Market Can and Is Using Data

Smarter Business Decisions

High demand for energy-efficient products and skilled workers

Small businesses adding staff and increasing client bases

KEY TAKEAWAY: Financing not the key barrier. Primary issue is demand.

Job Creation + Economic Growth

Job Creation + Economic Growth

“As a Silicon Valley venture capitalist … I tell our green startup companies to focus on San Francisco or New York City. That’s where the action is going to be.”

- Elton Sherwin, venture capitalist, senior managing director, Ridgewood Capital

“The Greener Greater Buildings Plan has spurred the New York Market to interest and activity around energy efficiency. Over the past year, we have begun working with over 75 million square feet of real estate in New York and over 400 new clients.”

- Lindsay Napor McLean, COO, Ecological

“When an owner sees a benchmarking score that is lower than expected, they’re a little more receptive to improvements to bring the score up, which in turn lowers their utility costs.”

- Kevin Dingle, president, Sustaining Structures

Market Competition + Consumer Choice

Building performance data

collected

Data shared with stakeholders and

market

Market compares building

performance

Market rewards efficient properties

Owners improve efficiency to remain

competitive

Efficiency of building stock continuously

improves

CoStar to Include Data

95B Sq. Ft. tracked4.6M properties

What the Data is Telling Us

Energy intensity is greater in newer office buildings than older buildings.

ENERGY STAR scores are higher in older office buildings than newer buildings.

What the Data is Telling Us

The poorest performing buildings use 3 to 7 times the energy and roughly 8 to 13 times the water of the highest performing buildings.

What the Data is Telling Us

Residential energy efficiency is associated with lower mortgage default and prepayment risk

32% lower default risk on ENERGY STAR homes, controlling for other factors, including price, location and FICO score.

The more efficient the house, the lower the default risk.

What the Data is Telling Us

How the Market is Responding

Rental price Sale price Occupancy rate

0%

5%

10%

15%

20%

25%

30%

Wiley et al 2010*

Fuerst & McAllister 2009/11

Jackson 2009

Pivo & Fischer 2010*

Eicholtz et al 2010*AveragePremium

Added Value of ENERGY STAR Labels in Commercial Market

Jackson, 2009 Pivo & Fisher, 2010 Fuerst & McAllister, 2011

Eicholtz, 2010Wiley et al., 2010

Rental Premiums for Green Commercial Buildings in the U.S.

Growth of Companies Reporting Data

$2.8 Trillion Total gross asset value of companies and funds reporting to GRESB Real Estate in 2016

$7.6 TrillionInstitutional capital represented by 58 GRESB investor members

Existing Barriers

Informational Lack of transparency around efficiency

Institutional Energy efficiency is undervalued

Transactional Split incentives

Organizational Information doesn’t flow within company or process

Inertia Business as usual continues without intervention

Establishing Best Practices

www.greenleaseleaders.com

www.greenleaselibrary.com

Improving Data Accessibility

Improving Data Accessibility

Engaging Buildings and Owners of All Sizes

Educating Additional Stakeholders

Educating Additional Stakeholders

Cliff MajersikExecutive Director, IMTWashington, DCcliff@imt.org; @IMTCliff

Thank you!