By Jillian Ruffino
Published in the October 2007 issue of Today’s Facility Manager
Over the course of American history, the term “green” has had several different meanings. Before the late 19th century, the color green was closely associated with farming, this country’s then primary economic function. Until the 1930s, the U.S. was comprised of vast stretches of farmland. The needs of the physical environment were carefully considered because the land, so close at hand for most people, was necessary for survival.
In the late 19th century, Americans started to work for a different kind of green: money. Expanded transportation, electricity, and improved industrial processes resulted in the industrial revolution, an explosion in production that changed the face of American economics.
It also changed the public’s perception of the planet. In the pursuit of economic gain, the environment was damaged and neglected.
Today, green has taken on a whole new meaning as American businesses attempt to reconcile economic goals with environmental concern. Impressive office buildings, sports venues, and public facilities stand as shining examples of American progress, but many facility managers know that excessive energy consumption still plagues many structures.
The Department of Energy’s (DOE) Energy Information Administration (EIA) reports that, in commercial facilities, energy consumption per capita increased by 8% from 1980 to 2005. It also found that 37% of energy and 68% of electricity produced in the U.S. is used by buildings.
As the U.S. moves toward a service based economy, disposable income growth is creating more demand for hotels, restaurants, retail facilities, and other commercial facilities. More energy will be needed.
The problem is projected to become worse. The EIA’s Annual Energy Outlook 2007 (AEO) estimates that natural gas use will have an annual increase of 1.3% between 2007 and 2030. The EIA reports electricity will lead this march in the coming years, with an increase between 1.6% to 2.3%.
These projections assume the use of energy efficient technologies. The existence of such technologies, continued research, and increased awareness and interest in green issues offers some hope for the future of facilities.
Facility managers are concerned about how much energy their buildings require. There are two factors that move these professionals to attempt to cut back on energy consumption in facilities. The first of these is cost.
Ben Parker, director of commercial and industrial sales for Tradition Energy, based in Stamford, CT, states, “Energy is becoming a bigger component in everybody’s budget. Energy costs have gone up significantly over the last five years.”
There is a very specific reason energy has become so much more expensive in the past five years. As Donald T. Millstein, president and CEO of E-Mon, LLC in Langhorne, PA, explains, “Electricity for years was basically a stagnant cost. With today’s technology and the deregulation of electricity, there are two things happening: one, the cost of power has started to fluctuate. The other is constrained markets, where there might not be enough available power in certain markets.”
This condition, as Millstein explains, drives up demand and causes costs to rise. He continues, “At one point, facility managers knew their electricity bills would be the same all the time. It is no longer a static cost that is never going to change. It is changing; it’s going up.”
As Jeff Crane, TFM FM Frequency columnist and mechanical engineer and senior property manager for Childress Klein Properties in the southeastern U.S. sums up, “The cost is going to keep going up, so it will become more and more important for people to manage energy consumption more aggressively.”
The other issue driving facility managers to reduce energy consumption is concern for the environment. According to the EIA, 82% of greenhouse gas emitted by human activity is carbon dioxide related to energy production. Since 1990, carbon emissions have increased in the U.S. and 48% of this can be attributed to the building sector.
Parker believes this increase is due to electric usage. “The U.S. has an expanding economy. Americans build more buildings and they use more electricity. This is especially true in the south, southeast, and southwest, where cooling demand is higher.”
According to Parker, this surge in building, especially in hotter parts of the country, requires more electricity. “Power is being generated in that part of the country primarily by coal, and this increases carbon emissions. These emissions have deleterious effects.”
Fortunately, solving these two problems can be mutually beneficial. That is, facility managers working to decrease long-term energy costs in facilities will naturally cut back on damage to the environment.
In order for facility managers to reduce energy usage, they must first have an accurate picture of consumption. According to Millstein, “It is important for facility managers to see where the energy is being used, when it is being used, and how much is being used. The only way to save is to know where money is being spent.”
The EIA paints a general picture of energy consumption in buildings. The organization claims 32% is used for space heating, 7% for cooling, and 23% on lighting. Most facility managers are aware that HVAC and lighting use enormous and costly amounts of energy. It is important, however, to dig deeper and find out exactly how each specific facility operates.
“The first thing facility managers need to do,” says Parker, “is have an understanding of the facility itself. They need to find out whether or not the equipment in the facility complies with current energy efficiency standards.”
Millstein’s company manufactures submeters, which individually monitor energy consumption in different spaces of a structure. He asserts, “With submeters, it is possible to view the whole facility’s usage, or to view something as specific as an individual circuit breaker. Facility managers can identify how much energy, for example, is being used by each production line, elevator, or lighting circuit.”
With this type of monitoring, it is also possible to see where energy is being wasted and identify possible corrective measures. For example, E-Mon’s Green Class submeters can display an estimate of the past hour’s Co2 emissions. With this feature, users can gauge the damage done to the environment. The meter can then take the same calculations, and based on present electricity usage, predict Co2 emissions for the next hour.
“So,” says Millstein, “if the air conditioner is turned off, users will not only see how many kilowatt (kW) hours have been saved, but also how much Co2 has not been emitted into the atmosphere.”
The age of the facility is another important factor. Parker warns, “If you have a building that is 20 or 30 years old, it might not be equipped with (what is now considered) the minimum requirement for energy efficiency in a building.” He mentions the National Appliance Energy Conservation Act of 1987 as well as the 1992 Energy Policy Act (which outlined minimum standards for commercial building heating and air conditioning equipment and lighting) as legislation facility managers of older structures should keep in mind.
Making energy efficient changes in older buildings can have a large environmental and financial payback. Parker continues, “The largest and easiest opportunity for savings in older buildings is HVAC. There is some indication that as much as 40% of the energy used for HVAC is lost due to inefficiencies.”
He also recommends getting the utility involved in the process of cutting energy bills. Often the utility includes the cost of energy audits in the bill. It may be wise to take advantage of this type of appraisal. The utility can recommend specific improvements and give the facility paybacks for taking action.
It may also be wise for facility managers to consider buying green power as an alternative to energy generated from fossil fuel sources. Crane states, “Energy is a commodity we all buy. Some people have more choices than others with regard to where they get it.” These choices, including wind, solar, and geothermal power, are possibilities facility managers should consider.
Parker explains, “Right now, about 7% of the electricity used across the country is green. This is something everybody is talking about.”
Parker also concedes that green power can be more expensive than traditional fossil fuel power. “It typically ranges between 2¢ to 3¢ cents a kW hour more in cost,” he estimates. “Typically, when facilities buy green power, they may buy credits or they may buy power directly from the solar panel or electricity produced from wind farms.”
He also recommends facility managers search for alternative energy sources that have been verified by a third party. Parker says, “Facility managers should look for that type of verification to be sure power bought is indeed green, since facilities will be paying a premium for it.”
Buying renewable energy credits for green power (rather than actually using this source) is another option. Described by Parker as an “income transfer,” it is essentially the process of one organization buying the rights to the benefits of generating electricity from green energy sources. Despite buying energy credits, facilities must still work to reduce energy consumption.
This process benefits both the facility and the environment. Companies will experience all the perks of using green power, such as positive publicity, tax breaks, and the ability to develop in more areas.
It is important to remember that the predicted increase in energy usage took into consideration current and future energy efficient technology. This means facility managers could use energy efficient technology and still contribute to the escalating problem. For this reason, it is important to be creative and implement custom strategies.
Getting occupants involved in the process may produce results. Submeters, for example, are usually installed in a facility’s basement or electric closet, where occupants cannot access ongoing information about energy usage. Millstein’s company decided to create a green enclosure for submeters to encourage facility managers to display them in prominent places. “This way, building occupants can see what is going on in their spaces,” says Millstein. “Facility managers can only control so much. By encouraging and educating people, others will want to help.”
Facility managers’ natural inclination will always be to investigate and find innovative solutions. When purchasing energy, they have a chance to protect the environment and the facility’s budget.
This article was based on interviews with Crane, Millstein, and Parker.