Green Buildings:An Energy Opportunity for Future

Presented By:

Ronak SachetiMBA –II year, SPM

Order of Presentation

• Overview• Benefits of Green Buildings• Perception & Realities• Economics of Green Building• Market Equilibrium

3

Why Energy Efficiency

• Rising energy prices• Climate change • Security of Supply• Economic Growth

Four drivers for action

Why Energy Efficiency in Buildings

Globally, buildings account for: • 40% energy use• 42%water consumption• 40% solid waste• 50% raw material use• 50% of air pollution• 42% GHG emission• 50% water pollution

Source : Bureau of Energy Efficiency ( BEE)

In India construction sector is growing at a rate of 9.2% as against the world average of 5.5% and contributes to 7% of India’s GDP

Source: Asia Pacific Energy Research Institute, 2008

• India’s urban population would grow to about 473 million in 2021 and 820 million by 2051.

• In India demand for office space is driven by the increasing share of the services sector in the Indian economy

• Shopping centres/malls : By the end of 2010, space of 79 million sf in 257 centres are in 15 largest cities of India

Key Facts

Source: Deutsche Bank Report on India’s Commercial Real Estate, 2009

Energy used by Buildings in India

Residen-tial23%

Com-mercial

7%Industrial37%

Agari-culture

31%

Transportation3%

Sector wise Energy Consumption

Lighting60%

HVAC32%

Others8%

Commercial Buildings

Lighting28%

A/C7%Fans

34%

EV Cooler4%

Refrigeration13%

TV4%

Others10%

Residential Buildings

Source: Bureau of Energy Efficiency ( BEE), 2009

Energy Efficient Buildings

"A green building is one which uses less water, optimises energy efficiency, conserves natural resources, generates less waste and provides healthier spaces for occupants, as compared to a conventional building."

Source: Indian Green Building Council ( IGBC)

Benefits of Green Buildings

Energy Savings Realized

Building Area(Sq. ft)

Normal Building

(Kwh)

Green Building

(Kwh)

% Reduction

Annual Energy Saving (Rs in Lakhs)

Wipro 1,75,000 48,00,000 31,00,000 40% 102

ITC 1,70,000 35,00,000 20,00,000 45% 90

CII Godrej GBC 20,000 3,50,000 1,30,000 63% 9

Source : Bureau of Energy Efficiency ( BEE)

Source: Miller, Spivey and Florance (2009)

Perception and Realities-1

Perception •Green Buildings are costlier

Realities•The cost could be slightly higher than a conventional building. But this needs to be seen with a different paradigm.•Green buliding would last for about 50 or 60 or even 100 years! The saving due to lower operating cost is for entire life span of the buliding while the incremental cost is one time cost only about 8-10%. The cost of green building is lower than a conventional building in a long run.

Building City Year awarded

Built in Area (SQ FT)

Rating achieved

% increase in cost

Payback (years)

CII- Godrej GBC

Hyderabad 2003 20000 Platinum 18% 7

ITC Green Centre

Gurgaon 2004 1,70,000 Platinum 15% 6

Wipro Gurgaon 2005 1,75,000 Platinum 8% 5

Grundfos Pumps

Chennai 2005 40,000 Gold 6% 3

Technopolis Kolkata 2006 72,000 Gold 6% 3

Spectral Services

Consultants

Noida 2007 15,000 Platinum 8% 4

HITAM Hyderabad 2007 78,000 Silver 2% 3

Typical Pay back period for various Green Buildings

Source : Bureau of Energy Efficiency ( BEE), 2007

Perception and Realities-2

Perception • Green Buildings have to be air-conditioned

Realities

• Green building concept can be applied for non-air conditioning buildings too.

• Applied on three such buildings in India• IGP Office• Gulbarga• Hyderabad institute of Technology and

Management

Perception and Realities- 3

Perception • Green Buildings take more time

Realities• There is absolutely no difference in the time

involved in constructing a Green Building vis. a.vis. a normal building

Market Potential for Green Buildings in India

YearProjected Certified Green

Buildings(Nos. Per year)

Estimated Market Potential

(in Million US $)

2006 20 80

2007 50 200

2008 150 500

2012 1000 4000

Source: Indian Green Building Council ( IGBC)

Criteria 2001 Till date

CEO’s and senior people involved

50 6000

No. of professional trained on green building concept

0 7000

No. of registered green buildings

1 768 registered buildings

Green building footprint 466.22 million sqft

IGBC membership 0 1050 members (90 Founding Members)

Green Building Movement in India

Source: Indian Green Building Council ( IGBC), 2009

Regulations and Rating

• The Energy Conservation Act 2001• The Bureau of Energy Efficiency (BEE)• Energy Conservation Building Code • Indian Green Building Council• Green Rating for Integrated Habitat

Assessment (GRIHA)

Real barriers in Indian Construction Industry

• In a colony developed by the builders, he only constructs while the energy bill is to be paid by the tenant or owner.

• Increase in initial building cost restricts the builders from not adopting energy efficiency measures in their buildings

• Unavailability of efficient equipments in India is another major barrier.

• No incentives from the government• Information asymmetry• Back up industry in terms of materials, equipments and

technical expertise is not coming up as fast as the construction industry

Green buildings and the Social Optimum

Copyright © 2004 South-Western

Quantity ofGreen Building

0

Price of

Green building

Demand(private value)

Socialvalue

Supply(private cost)

QMARKET QOPTIMUM

Developer- Buyer Matrix

How to achieve market equilibrium?

STAKE HOLDERS SCOPE OF INFLUENCE LEADERSHIP ACTIONSDevelopers/Owners

New Building Project objectives, budget and design team selection

Capital budgets for upgrade of existing buildings

Selection and policy for building management

Build or buy expertise Make energy efficiency a part of the design brief Pursue integrated design Right Size key building systems Commission the building to realize energy efficient savings Make efficient operations part of the building operations

strategy Set targets and align budgets Adopt lifecycle costing Plan and implement energy conscious building upgrades

Occupants Appliance efficiency Staff awareness raising

Adopt energy management best practices Increase staff awareness

Government Policy setting and enforcement

Public awareness raising Creation of a level playing field Capacity building Example setting

Establish regulatory minimums for energy performance Provide incentives for performance beyond regulatory

minimums Demonstrates best practices and adopt higher

requirements for public buildings Build capacity through investments in skills enhancements

and education and sponsored R&D Raise public awareness of the link between conservation

and environment and national security

Industrial Associations and NGOs

Catalyst for action by all stakeholders Help build industry capacity through providing professional and technological expertise or getting companies in touch with other organizations that may help through establishing networks of experts

Provide resource, education and opportunities for green building improvement

Go Green