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UNEP-SBCI 2012 13/06/2012
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The Economics of Green Buildings and Green Cities
G r e g K a t s , C a p i t a l E
UNEP-SBCIJune 2012
Shanghai
1989
2010
UNEP-SBCI 2012 13/06/2012
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Jatoba commercial buildingLEED Gold, São Paulo
Big Perception Gap on Cost Effectivenessof Green Design
Additional cost to build green:
Evidence from 146 green buildings
0
10
20
30
40
50
60
0-1%
1-2%
2-3%
3-4%
4-5%
5-6%
6-7%
7-8%
8-9%
9-10%
10-11%
11-12%
12-13%
13-14%
15-16%
16-17%
17-18%
18-19%
Range of reported premiums
Median in the
data set: < 2%
added cost
Public
misperception:
17% added cost*
*2007 opinion survey by World Business Council for
Sustainable Development
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Costs and Benefits: utility savings only
$0
$2
$4
$6
$8
$10
$12
$/S
f
Costs and Benefits of Green Buildings: Present value of 20 years of estimated impacts based on study data
set collected from recent green buildings
increased building cost
water savings
direct energy savings
Green School Green Office
Additional benefits not estimated:+Productivity and student performance+Property Value impacts+Indirect water systems impacts+Brand+Operations and Maintenance savings+Embodied energy savings
Source: Greening Our Built World (Island Press, 2010)
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Green/efficiency = risk reduction
Cumulative energy savings in green offices
$0
$5
$10
$15
$20
$25
$30
$35
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
year
$/s
f
annual 10%price increase
annual 6%price increase
annual 2%price increase
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7
Green = increased tenant satisfaction
Abbaszadeh, S., L. Zagreus, D. Lehrer and C. Huizenga, 2006. Occupant Satisfaction with Indoor Environmental Quality in Green Buildings. Proceedings, Healthy Buildings 2006, Vol. III, 365-370, Lisbon, Portugal, June.
Health & Learning Benefits of Green Schools
Increased Learning, Productivity & Performance (3%)
Increased Future Earnings of Students (1.4%)
Reduced Asthma (25%)
Reduced Colds and Flu (15%)
Reduced Teacher Turnover (3%)
Source: Greening Our Built World (Island Press, 2010)
UNEP-SBCI 2012 13/06/2012
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$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$/S
f
Costs and Benefits of Green Buildings: Present value of 20 years of estimated impacts based on study data set and
synthesis of relevant research*
increased building cost
health
water savings
energy savings
indirect energy savings
employment
emissions
Green School Green Office
Additional benefits not estimated:+Productivity and student performance+Property value impacts+Indirect water systems impacts+Brand improvements+Operations and maintenance savings+Embodied energy savings
Costs and Benefits of Green Buildings
Greening = Wealth and Jobs Creation
($400)
($200)
$0
$200
$400
$600
$800
$1,000
$1,200
GreenPremium
NPV onlydirect
energy
Plus water Plushealth
Plussocietalenergy
Plussocietal
CO2
Bil
lio
ns
NPV of Net Benefits of BAU and Green
BAU
Green
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($750,000)
($650,000)
($550,000)
($450,000)
($350,000)
($250,000)
($150,000)
($50,000)
$50,000
$150,000
$250,000
$350,000
$450,000
$550,000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Years
Cu
mu
lati
ve
Co
st
vs
Ba
se
lin
e
Reduce Loads
Passive Strategies
Active Strategies
Energy Recovery
On Site Power
Green Power Purchase
Whole Bldg
`
Whole building integrated upgradeSource: ARUP/Stanford
Green Building Benefits: Increased Rent, Sales & Occupancy
1st Quarter 2008 Non-LEEDLEED Certified
Offices Difference % Change
Occupancy rates 88% 92% 4% 5%
Rent ($/SF) $31 $42 $11 35%
Property value ($/SF) $267 $438 $171 64%
1st Quarter 2008 Non-Energy star Energy Star Offices Difference % Change
Occupancy Rates 88% 92% 4% 5%
Rent ($/SF) $28 $31 $3 11%
Sale Price ($/SF) $227 $288 $61 27%
Source: CoStar
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Comcast Building
All Building Types are Greening
Wentworth Commons - IL
Greening impacts: three Sources of Brand Equity
• Increased brand awareness (e.g., free media exposure)
• Greater preference due to specific attributes (e.g., better IEQ)
• General non-attribute preference (e.g., association with quality, lower risk)… AAA rating
• LEED > Zero net energy > living buildings
Brand Impact of Greening
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Pearl River Tower, Guangzhou
Carbon Dioxide Intensity and Per Capita CO2 Emissions
(Fossil Fuel Combustion Only)
0.00
5.00
10.00
15.00
20.00
25.00
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00
intensity (tons of CO2 per 2000 US Dollar)
To
ns
of
CO
2 p
er
pe
rso
n
Canada Australia
S. Korea
California
Mexico
United States
Austria
Belgium
Denmark
France
Germany
Italy
Netherlands
New
ZealandSwitzerland
Japan
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Aug 2003: European heat waveTemperature anomalies reached 10°C52,000 Europeans died
Country Fatalities
Italy 18,257
France 14,802
Germany 7,000
Spain 4,130
England & Wales
2,139
Portugal 2,099
Smaller countries
4,025
Total of above
52,452
17http://earthobservatory.nasa.gov/IOTD/view.php?id=3714
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Cool Cities: GCCA Network www.globalcoolcities.org
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Rewarding energy efficiency and green design for emissions reductions benefits
0
2
4
6
8
10
12
14
16
18
20
0 10 20 30 40 50 60
Ye
ars
Pa
yb
ack
Pe
rio
d
Percent Energy Use Reduction
CO2 to EE Model: Illustrative Impact
Status Quo
$15/ton
$30/ton
$50/ton
New EE Finance, Service Models
� Smart EE reshapes load far more cheaply than hard storage
� Extend PV Power Purchase Agreement (PPA) ownership models:
� eliminates up front costs
� EE, solar thermal, gshp
� SaaS business model
� Cloud based, V Low capital costs
� Building IQ
� Cooperative consumption
� BetterWorkplace
� EE through social media platforms
� MyEnergy
� U Military: Security driven
� Zero net energy bases, green buildings
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New European Electricity Capacity, 2011
European Wind Power Association
Reducing Peaking Power and T&D can achieve huge savings
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Net Zero Building
Building as energy storage
zerozero
00
++--
solarsolar
BIQ optimized HVACBIQ optimized HVAC
windwind
ice storageice storage
In net zero buildings this strategy:
• uses the building’s thermal mass as energy storage to balance renewable sources
• forecasts and adjusts timing of peak HVAC loads to match renewable power supply
By load shifting and intelligently adjusting interior temperatures, BuildingIQ optimizes HVAC operations, balancing :
• reduced energy usage/cost
• maintained or improved occupant comfort
• maximized DR event performance
Levelized District Optimization
Net Zero NOC
Portfolio/ Campus Energy Management
Facility-level Predictive Energy
Optimization
Use predictive energy optimization in 2 ways:
• At District Level: predicts and analyzes
DR capacity and energy storage capacity to aggregate
• At Facilities level: BuildingIQ:
provide operational and analytical oversight on entire portfolio and campus – from predictive, real-time, historical perspectives.
Rolling Optimized Reserves
TargetUsage and
Demand ceiling
Block of building loads before optimization
Block of building loads after
optimization (rolling)
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Smart Cities: Large increase in potential savings, but large increase in complexity (slide source: Schneider)
SMART DB
Starter Apps
UI
SMART Engine
SMART Modeling
Business Apps
Resource Apps
Core
Pla
tform
Core
Pla
tform
SM
AR
T A
pps
SM
AR
T A
pps
SMART AppMarketplaceSMART AppMarketplace
Core Platform Direct Sales (SaaS)
Core Platform Direct Sales (SaaS)
Data Management key to Data Management key to Green Cities eg ScreampointGreen Cities eg Screampoint
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Green > Quality + Healthy >Better Brand
Cities can drive green at negative costs
Web enables shift from waste/water expansion + disposal to waste/water reduction
DC Green
Rationale:
• Employment
• Cost effective
• Brand Benefits
Green Building Performance Database: www.gbdata.org
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• www.globalcoolcities.org• www.cap-e.com• [email protected]
• gbdata.org
Thank you!