7  December 2011  – It’s got Richard Branson’s attention, the Empire State Building and now Melbourne’s 1200 Buildings program is becoming the latest poster child in energy efficiency for buildings. And we haven’t even mentioned President Obama’s announcement of a US $4 billion retrofit program paid by energy efficiency contracts.

From Environment 360, by David Biello – Of the hundreds of thousands of buildings in New York City, none is more iconic than the Empire State Building. Completed in 1931 as the tallest skyscraper in the world, the Art Deco edifice was meant not only to house thousands of office workers, but to serve as a dock for the coming age of dirigibles.

Now the 102-story building has a new tale to tell: efficiency. A recent $20-million retrofit — which included everything from cleaning and re-insulating more than 6000 windows to caulking leaks in the building’s facade — reduced energy use by nearly 40 percent, according to air and energy program lawyer Katherine Kennedy of the Natural Resources Defense Council. And the Empire State Building is just the most visible example of a new trend — retrofitting old buildings to be more energy efficient. For example, billionaire businessman Richard Branson’s Carbon War Room and the Ygrene Energy Fund are leading a consortium that will invest as much as $650 million in similar retrofits in Miami and Sacramento.

Globally, businesses, national and local governments, and property owners have begun to retrofit millions of older buildings in a bid to cut down on energy use and reduce greenhouse gas emissions. These retrofits are the most cost-efficient way to combat climate change and save on rising power bills, according to analysts ranging from the McKinsey Institute to the International Energy Agency.

Melbourne, Australia, for example, plans to reduce energy consumption in 1200 of its office buildings by the end of the decade. In the US, the Environmental Protection Agency is running a “Battle of the Buildings” in which 245 facilities compete to save the most on their utility bills through energy efficiency improvements. In recent years, five major international banks have joined four multinational energy services companies and invested $5 billion in retrofitting old buildings in 16 of the world’s biggest cities, from Mexico City to Mumbai.

“It’s effectively job creation, resilience to future climate change and keeping operating costs low, all at once,” says Karin Giefer, an associate and sustainability consultant at the engineering firm, Arup, who just wrote a report on such retrofits for the World Economic Forum. The bottom line, says Giefer, is that “if it will pay out and save energy, [building owners] will do it.”

Buildings currently account for approximately 40 percent of the world’s energy use. Roughly half of the buildings standing today will still be in use in 2050 — and those buildings could generally improve energy efficiency by at least 20 percent through simple fixes like better insulation. “The effort to reduce greenhouse gas emissions and adapt to climate change will be won or lost in cities,” New York Mayor Michael Bloomberg told a recent conclave of mayors at C40, an international planning group for 59 major cities engaged in efforts to combat climate change. “As the primary centers of economic activity globally, cities are significant consumers of energy and emit nearly three-quarters of the world’s carbon emissions.”

In June, C40 partnered with the World Bank to help secure funding for retrofitting projects. The first stage of the partnership will ensure that cities measure and report greenhouse gas emissions and reductions in broadly similar ways, allowing for comparison — and verification. In exchange, the World Bank will allow the cities — as yet unselected — to access its climate-related funds to finance such projects.

Similarly, the Carbon War Room, which Branson helped create to harness entrepreneurial thinking to fight climate change, and green energy financiers Ygrene will use a program known as PACE — property-assessed clean energy — to help fund commercial building retrofits worldwide. The program allows property owners to take out loans provided by the consortium’s partners, including Lockheed Martin and Barclays Capital, to pay for energy efficiency improvements and then pay those loans back through a surcharge added to a building’s property taxes. A similar scheme had been employed in California and 26 other states starting in 2008 to enable homeowners to install solar power systems. But it foundered in recent years when major mortgage providers, including governmental entities such as Fannie Mae and Freddie Mac, objected to any additional liens on mortgaged properties.

“The PACE Commercial Consortium is the missing piece in the puzzle for cities looking to implement green plans,” Branson, head of the Virgin Group of companies, said in a statement in September announcing the funding. “I’m thrilled by the news of this ground-breaking mechanism, and believe it will unlock a trillion dollar market for green retrofits.”

Retrofits include everything from the prosaic — better windows and more insulation — to the advanced, such as systems that make ice at night when electricity is cheap and use it to cool a large building by day. Companies such as IBM offer software and sensor packages that help manage and improve a given building’s energy performance. For example, new, inexpensive sensors are placed on air ducts, boilers, chillers, computer rooms, lights, thermostats, water pipes, and other critical infrastructure. They then provide real-time data to building managers that alerts them to anomalies, such as defective equipment.

“It’s using information technology to make better decisions,” says Sharon Nunes, IBM vice president for smarter cities, noting that the software can do something as basic as pointing out when a building is running its heating and cooling systems at the same time.

Such efforts are not confined to major metropolitan areas. IBM is working with Dubuque, Iowa on energy and water efficiency measures, among other projects. “Smaller and medium-sized towns are the most innovative,” says Konrad Otto-Zimmerman, secretary general of the International Council for Local Environmental Initiatives, a municipal government group.

He cited examples such as Freiburg, Germany and its bid to build passive houses that require limited heating and cooling — if any. In Cleveland, Ohio, architects and engineers are creating a new aluminum and glass façade around the old outer shell of the Celebrezze Federal Building to help improve its insulation.

Of course, such retrofits have been a good idea for a long time. The US government has had a retrofit program since the 1980s, yet only 1 percent of the country’s nearly 5 million commercial buildings have been redone. “It comes down to the fact that nobody trusts anybody else’s numbers,” Arup’s Giefer says of conflicts between government entities, financiers, utilities, and operations managers to get such projects done.

And projects actually undertaken, which represent a small fraction of those possible, reported energy savings of closer to 12 per cent than 20 per cent, according to a UN Environmental Programme report. Improved technologies and growing concerns about climate change are likely to boost retrofitting efforts in the coming decades, though many hurdles remain.

In the case of New York City, while a small percentage of buildings are responsible for nearly half of all electricity demand, disconnects between those who pay the energy bills — tenants — and those who would pay for any energy efficiency improvements — owners — impede action. The city will now require buildings larger than 50,000 square feet to document their energy use, which may inspire energy efficiency upgrades.

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