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Opening Remarks: 2030 Energy Retrofit Market Forecast
Session 1: Greatest Opportunities
Session 2: Innovations and Examples of Scale
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Session 3: Scaling it Up
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Thank you to Nicole Ceci of Steven Winter Associates for providing these answers.
1. How much will electrifying domestic hot water (DHW) increase electricity demand, and can the NYC grid handle the increase?
I don’t recommend dropping electric resistance water heaters all over the place—but instead, well-controlled heat pump water heaters with storage tanks. These systems can communicate with the grid to charge up storage when the grid is least busy. This allows the utility company to get better off-peak usage out of their expensive infrastructure. There are already utilities piloting these projects across the U.S.
What is the impact on energy conservation via directly billing tenants for heat? Does NYS need to modify the heat billing ban on affordable units?
Some European studies have indicated that switching to resident-paid heating can drive ~20 percent savings. In NYC the benefit is two-fold: savings from paying your own bill and from making these systems controllable.
The worst possible outcome of heat cost apportionment would be if people lost the ability to live with comfort and dignity. Any legislation that changes how heat is billed to affordable housing units would have to make sure residents are protected. The economics boil down to this: an inefficient building pays more for heating, and residents bear impacts of that cost regardless. Steven Winter Associates has seen 10-20 percent savings just from fixing unbalanced steam heating systems. Fixing inefficient systems and making them controllable will reduce the cost. Regulations would have to make sure that residents reap the rewards of efficient use of heating controls, and ensure they don’t lose a safety net. The goal is to make NYC space temperatures similar to the rest of the northeast—not to put new burdens on low- and moderate-income residents.
2. Is Con Edison ready for everyone to start electrifying everything?
First, we have to talk about where in the city electrification occurs. “The grid” is not uniform across the city. There are some load pockets with a lot of flexibility and some that are very strained. Any work has to be done in concert with ConEd. We need smart electrification coupled with energy efficiency—we want people to have the most efficient lighting systems (lamps + controls), to turn off unused equipment/devices, and to be able to control their heating and cooling.
If you look at benchmarking and audit reports, you see a huge spread in performance across buildings with the same uses. If the bad performers tightened up to a good performer level, then the change in electrical load becomes much lower than if all existing building systems were just electrified over now. Also, keep in mind that different sectors have different lifts. Figure 12 of Urban Green’s Water Use and Energy Report shows a nice breakdown of the relative change in end-use we are talking about.
3. How does the proposed shutdown of Indian Point affect electrification?
The closure of Indian Point nuclear facilities has been coming for a while and was accounted for in the Roadmap to 80x50 report grid modeling (see page 37 of the roadmap). It creates a bigger opening for renewables and has been part of the planning process for a while.
4. How clean does the grid need to get before cogeneration becomes a greenhouse gas liability and a stranded asset? Is this factored into the underwriting process?
Urban Green Senior Advisor Richard Leigh has a good blog about this. His takeaway is that combined heat and power (CHP) systems should be priced to pay for themselves by 2035 to avoid becoming a stranded asset.
Thank you to Anne Evens of Elevate Energy for providing these answers.
1. What role will Chicago’s new PACE program have in scaling the market? Rather than shorter payback projects in isolation, shouldn't we bundle them with harder, deeper carbon reduction projects to secure better financing?
We are excited about Chicago’s new PACE program because the longer loan terms allow for more expensive, deeper retrofit packages that can also include renewables. And yes, we should be driving towards deeper carbon reductions.
2. Evens, can you break down the Net Operating Income (NOI) increase for owners? Is that inclusive of financing costs for retrofits?
We found that owners saw an increase in NOI because of lower vacancy rates and lower utility and maintenance costs. The costs were inclusive of the full costs of the retrofits.
3. What packages did Elevate Energy provide to building owners?
Typical packages included air sealing and insulation, heating system upgrades (repair and replacement), and controls and lighting upgrades.
4. Elevate Energy has retrofitted 48,000 units. How many individual buildings was that?
5. Have any of Elevate Energy’s projects pursued the Chicago Sustainability Scorecard simultaneously? ('Points' for LEED, energy efficiency, LBC)?
Yes, many of the projects have pursued LEED certification, Energy Star Certification, Enterprise Green Communities Standard, and one that pursued Passive House certification. Chicago has a benchmarking ordinance that requires public Energy Star reporting, so it’s possible to see Energy Star scores for multifamily buildings. If you take a look, you will see that we still have a lot of work to do.
6. How did Elevate Energy segment common building typologies?
We drew upon 13 data sources to segment the Chicago multifamily market. The Cook County Assessor provided the primary dataset, containing more than 173,000 observations. The assessor data included variables for property age, units, stories, construction material and assessed value. Each observation was associated with a unique 10-digit property identification number. Elevate Energy incorporated additional sources to augment the Cook County Assessor data. This included joining an older version of the Cook County Assessor data with the more current version, incorporating two datasets from the City of Chicago Department of Buildings, and adding information from the commercial real estate database CoStar. Elevate Energy relied on additional sources for information on building ownership and financing. The National Housing Preservation Database provided property-level subsidy information for the Low-Income Housing Tax Credit (LIHTC), public housing authority affiliation, and other funding sources. The report authors estimated ownership structure using the most recent estimates from the American Community Survey (ACS) published by the U.S. Census Bureau. To learn more, read our report.
Thank you to Sabrina Kanner of Brookfield Properties for providing these answers.
1. LL97 urges the commercial sector to take the lead, but we heard at the conference that as a conservative industry it may wait and look to the grid. Will there be an impasse?
Not necessarily. Firstly, there is not enough sidewalk area in NYC to house the transformer vaults required for electrification at this scale, so ConEd will become a constraint when looking to the grid. Secondly, I believe this constraint will encourage some local power generation and the creation of micro-grids.This would provide independence and resiliency against an inadequate grid and would be attractive to commercial tenants who seek redundancy in power supply in defense of grid failure.
2. Should we focus first on solutions that reduce our carbon use without a large embodied carbon expense?
It’s a good thought for a future improvement in the law. That could and should be part of the cost analysis, and currently, it isn’t. I am not aware of a simple way to measure the embedded carbon of a future facade replacement prior to the engineering of that facade, but a generic set of metrics could be developed to guide that analysis. In the meantime, carbon-heavy materials like steel and concrete tend to be the more expensive solutions, so there are other constraints preventing us from moving in that direction.
3. Should we focus on solutions with low embodied energy? Is anyone doing a lifecycle analysis study of the carbon we spend to save carbon?
Not that I know of—but it’s an excellent point. Studies have been done on the amount of embedded carbon in a project used in decision-making around whether to tear down a building or renovate, but not necessarily carbon emitted in the process of retrofitting to decrease carbon emissions. A payback analysis of carbon expenditure to reduce further emissions should be done and would require the development of metrics for use across the industry.
4. Do you expect good uptake of NYC C-PACE for financing the improvements needed?
Yes, I think we will see a strong response as people become aware of the program. It offers an easy way to finance projects in a manner that can be shared with tenants through a conventional pass-through of operating expenses.
5. What are the biggest retrofitting opportunities and challenges?
The greatest opportunity is the real value creation through transformative retrofitting and renovation—new facades, controls, and mechanical systems can vastly improve the quality of the occupant experience and commercial appeal, pushing a property into a higher revenue bracket. The greatest challenges are clearly the cost and retrofitting occupied properties without tenant disruption.
6. C40 Cities research has highlighted the significant co-benefits of retrofits, including health, comfort, jobs and skills. Which resonates the most for decision-makers?
Feedback through leasing discussions tells us that employers are most interested in health and comfort as a means of employee retention and productivity.
7. While glass retrofits may improve some existing building stock, they are not ideal for resilience during power outages. How do we encourage resilience with retrofits?
Given the frequency and length of outages on average in New York City, which are both very low in comparison to the rest of the country (less than one per year on average and usually over in minutes), I wouldn’t consider resilience in power outages a factor.