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Thought Leadership from Sieben Energy Associates

Why Pursue Energy Efficiency in Commercial Buildings?

It is hard to conceptualize the impact that our own energy use has on the world, particularly as it relates to carbon emissions and climate change. Although we understand the importance of reducing energy consumption, it often feels like the energy we use on a regular basis is just a drop in the bucket. But the key is to remember that those many small drops add up quickly. Reducing energy use in our buildings, even by a modest amount, can, in aggregate, have a significant impact.

According to the International Energy Outlook 2016, published by the U.S. Energy Information Administration (EIA), energy consumed in the buildings sector constitutes about 20% of total global site energy consumed. The "buildings sector" includes residential and commercial users, and encompasses all energy consumed at the building for uses such as heating, cooling, ventilation, lighting, refrigeration, computers, and other various equipment and consumer products. Of this 20%, residential users are responsible for about two-thirds, while commercial users are responsible for the remaining one-third. In other words, commercial buildings around the world account for 7% of global site energy consumption.

This large share of global energy consumption means that there is significant potential for energy savings. With a modest investment in time and resources, buildings can realize sizeable reductions in energy use.

For example, Sieben Energy Associates has performed dozens of retro-commissioning projects in large commercial buildings. During these projects, we identify a number of low-cost and no-cost energy reduction opportunities involving operational improvements to HVAC systems. These projects typically yield energy use savings of 5% to 10% on an annual basis with simple payback of fewer than 18 months.

If all commercial buildings were able to reduce energy consumption by 5% to 10% annually, that achievement would translate to a reduction in total global energy consumption of between 0.35% and 0.7%. That may not sound like much. But to put that into perspective, according to the most recent BP Statistical Review of World Energy, global energy consumption increased by just 1% in 2016. Growth in 2015 and 2014 was 0.9% and 1.0%, respectively. Thus, even moderate savings in commercial building energy consumption could offset much if not all annual growth in global energy consumption.

According to the same BP Statistical Review, due to a shift in primary energy sources towards lower carbon fuels, carbon dioxide emissions increased by only 0.1% in 2016, meaning that a mere 5% reduction in commercial building energy consumption could result in an overall decrease in annual emissions, all else being equal.

Achieving more aggressive (but still feasible) savings of 20% across the entire commercial building sector would reduce global energy consumption by roughly 1.4% per year, with a commensurate reduction in emissions. Of course, projects involving more significant resources of time and capital can achieve even larger energy reductions, potentially as high as 30% to 50% for a deep retrofit. And if energy efficiency was pursued at the residential level as well, net reductions could be greater still.

Energy savings opportunities naturally differ among commercial buildings because of age, activity, occupancy, systems, and equipment, as well as between regions and countries based on economics, climate, and other factors. A 5% to 10% reduction in energy consumption may be easy to implement at some buildings, but difficult to implement at others. Despite oversimplification of the problem and solution, it is a useful exercise to consider the sheer magnitude of global building energy consumption and the potential benefits of energy efficiency and emissions reduction.

Energy efficiency makes sense in and of itself from a purely financial perspective. Reducing energy consumption is an easy way to cut operating costs, and returns can be realized relatively quickly. Many utility companies now offer incentives for a wide array of energy efficiency improvements, including retro-commissioning projects, further improving financial viability.

The more people participate in energy efficiency, the closer we get to reducing our overall energy and carbon footprint. Energy efficiency is a win for the bottom line and a win for the environment. As countries and corporations increasingly embrace this truth, we will create a better future—one drop at a time.

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