Strategic Decarb 101

About Resource Efficient Decarbonization

Insights from Empire Building Challenge

Improved engineering design means and methods are needed to enable and speed adoption of low-carbon retrofit technologies. High performance, low-carbon heating and cooling systems are widely available but are underutilized in the United States due to a variety of misconceptions and a lack of knowledge around thermal system interactions. Few practicing engineers prioritize recycling heat and limiting heat loss. Decarbonization requires upgrading and adapting energy distribution systems originally designed to operate with high temperature combustion to integrate with electric and renewable thermal energy systems. The engineering design industry can use a thinking framework like Resource Efficient Decarbonization (RED) to deliver projects that achieve more effective decarbonization.  

This framework emerges from the Empire Building Challenge through continued collaboration among real estate partners, industry-leading engineering consultants, and NYSERDA. RED is a strategy that can help alleviate space constraints, optimize peak thermal capacity, increase operational efficiencies, utilize waste heat, and reduce the need for oversized electric thermal energy systems, creating retrofit cost compression. While RED is tailored to tall buildings in cold-climate regions, the framework can be applied across a wide array of building types, vintages, and systems. The approach incorporates strategic capital planning, an integrated design process, and an incremental, network-oriented approach to deliver building heating, cooling, and ventilation that: 

  • Requires limited or no combustion,
  • Enables carbon neutrality,
  • Is highly efficient at low design temperatures and during extreme weather,
  • Is highly resilient, demand conscious, and energy grid-interactive,
  • Reduces thermal waste by capturing and recycling as many on-site or nearby thermal flows as possible, and
  • Incorporates realistic and flexible implementation strategies by optimizing and scheduling phase-in of low-carbon retrofits competing with business-as-usual.

Decarbonization Framework

Resource Efficient Decarbonization focuses on implementing enabling steps that retain a future optionality as technology and policy evolves. This framework allows a building owner or manager to take action now, instead of waiting for better technology and potentially renewing a fossil-fueled powered energy system for another life cycle.

The figure below illustrates a conceptual framework for accomplishing these objectives and overcoming the barriers. Specific measures and sequencing will be highly bespoke for a given building, but engineers and their owner clients can use this bucketed framework to place actionable projects in context of an overarching decarbonization roadmap.

Resource Efficient Engineering Steps

Step-by-Step Process to Advise Decarbonization Efforts

  1. Understanding a building’s fossil fuel use in detail is a critical first step. Make an effort to understand when, where, how, and why fossil fuels are being consumed at the building and under what outdoor temperature and weather conditions. Conduct a temperature BINS analysis to know how much fossil fuel is consumed during various temperature bands (typically in 5- or 10-degree increments) from design temperature up to the end of the heating season. Make an effort to understand cooling season usage patterns in detail. Go further and conduct an 8760 hour/year analysis or modeling effort to show building operation profiles with high granularity to advise targeted elimination of fossil fuel consumption.
  2. While electrification is desirable to combat climate change, energy efficiency is a  critical component of decarbonization. Reducing heating and cooling loads across all weather conditions is a major early step to achieve RED. 
  3. Identify the ways heat is being gained or lost. Hint: some places to look at are cooling towers, facades and windows, elevator machine rooms, through sewer connections, or at the ventilation exhaust system. Cooling towers operating in the winter are an obvious energy wasting activity. Seek solutions to reduce, recover, and recycle or reuse, and store this heat. 
  4. After, or in parallel with the previous steps, begin to electrify the building heat load, starting with marginal “shoulder season” loads (spring and fall). Don’t force electric heating technology such as air source heat pumps to operate during conditions for which they weren’t designed. Optimize heat pump implementation through a “right sizing” thermal dispatch approach to avoid poor project economics and higher operating expenses. This means continuing to retain an auxiliary heating source for more extreme weather conditions until fossil fuels are ready to be fully eliminated. This approach provides owners time to identify the right peak period heating solution while allowing them to act early in driving down emissions. Emissions reduced sooner are more valuable than emissions reduced in the future.
  5. Remove connections to fossil fuels and meet decarbonization deadlines!

Take Actions with these Enabling Steps

Review

  • Disaggregate time-of-use profiles to identify heat waste and recovery opportunities and to right-size equipment.
  • Thermal dispatch strategy: layering heat capacity to optimize carbon reduction and project economics.

Reduce

  • Repair, upgrade and refresh envelopes.
  • Optimize controls.

Reconfigure

  • Eliminate or reduce inefficient steam and forced air distribution.
  • Create thermal networks and enable heat recovery.
  • Lower supply temperatures to ranges of optimal heat pump performance.
  • Segregate and cascade supply temperatures based on end-use.

Recover

  • Simultaneous heating and cooling in different zones of building.
  • Eliminate “free cooling” economizer modes.
  • Exhaust heat recovery; absorbent air cleaning.
  • Building wastewater heat recovery.
  • Municipal wastewater heat recovery.
  • Steam condensate.
  • Refrigeration heat rejection.
  • Other opportunistic heat recovery and heat networking.

Store

  • Store rejected heat from daytime cooling for overnight heating.
  • Store generated heat— centrally, distributed, or in the building’s thermal inertia.
  • Deploy advanced urban geothermal and other district thermal networking solutions.

Building Systems Topologies

Commercial Office

Commercial office buildings offer significant heat recovery and storing opportunities due to simultaneous heating and cooling daily profiles. As a result, offices can heat themselves much of the year with heat recovery and storage. Example load profiles for typical heating and cooling days in a commercial office building are shown in the graph below.

Office heat and cooling load

Multi-family

Multi-family buildings’ typical daily profiles show efficiency opportunities that can lower and flatten system peaks. This can be achieved by a variety of heat reduction, recovery, and storing strategies​. Example load profiles for a typical heating day in a multifamily building are shown in the graph below.

Multifamily heat load

Thermal Distribution Opportunities

The thermal energy network approach enables transaction of thermal energy to increase overall system efficiency and reduce wasted heat. The concept can be applied at the building level (with floor-by-floor heat exchange), to groups of buildings, to whole neighborhoods, or to cities. Below is an illustration of a whole-system, thermal network approach applied in an urban environment to supply clean heat in cold-climate tall buildings:​

Resource Efficient Engineering Steps Exemplified

Federal Incentives

Breaking Down the Inflation Reduction Act

A sortable and filterable list for stakeholders big and small.

This spreadsheet was built off of the list of Inflation Reduction Act (IRA) funding programs published by the White House as a complement to its IRA Guidebook. First released in April, RMI updated this spreadsheet in July 2023 to reflect new information. The spreadsheet uses, as a start, the list of IRA funding programs published by the White House (“federal summary”) as a complement to its IRA Guidebook. It builds off this federal summary by increasing the ability of users to sort and filter funding sources based on criteria such as sector, topic, funding eligibility, and funding type. It also increases the comprehensiveness of the federal summary, including by adding IRA-related tax incentives, and it adjusts certain aspects of the federal summary to make them more up to date and complete.

Disclaimer: Information in this spreadsheet should be treated with an element of caution as many of these funding programs are under development and rapidly evolving.

Source: RMI

Financial Planning

Financing Decarbonization Retrofits

Insights from the Empire Building Challenge

Financing can make or break a project. Presenting the different financing options to the project ownership team and decision-makers at the onset can increase the likelihood that a project will be implemented. Below is a non-exhaustive list of currently available financing resources and an overview of options to pay for energy-related building improvements. 

Incentives and Rebates 

All project teams should investigate federal, state, and local utility incentive programs and rebates, including as part of their financing model. Certain incentives are predictable and reliable enough that they can reasonably be included in the decision-making process with relatively low risk (e.g., incentives for lighting upgrades). Specialized incentive programs for new technologies with large carbon reduction potential should also be considered as they may significantly improve the financial performance of a decarbonization solution. For example, studying and pursuing incentives associated with heat pumps may reduce the payback time or improve the NPV of heating electrification measures.

Find more information on local utility programs in the Database of State Incentives for Renewables and Efficiency (DSIRE). 

NY Green Bank

NY Green Bank (NYGB) fills gaps in the market where financing may not be available from conventional lenders   by offering financing for a wide variety of building decarbonization projects.  The NYGB can come in at multiple points in the capital stack and project lifecycle, including: 

  • Predevelopment
  • Construction/construction-to-permanent
  • Term
  • Mid-cycle improvement loans
  • Preferred equity

NYGB also offers creating financing solutions, such as:

  • On-lease financing for commercial tenant efficiency improvements
  • Energy saving loans for ESCOs
  • Predevelopment loans for NYCHA PACT conversions

Learn more about NYGB.

New York Energy Efficiency Corporation

The New York City Energy Efficiency Corporation (NYCEEC) is a clean energy and energy efficiency lender, financing a wide range of energy efficiency and clean energy technologies throughout the Northeast and Mid-Atlantic regions, including: 

  • Energy efficiency
  • Renewables
  • Storage
  • Fuel conversions
  • High performance/Passive House Buildings

NYCEEC is also the City of New York’s designated administrator of the NYC Accelerator PACE Financing program. Learn more about the NYC Accelerator PACE Financing program.

PACE Financing

Property Assessed Clean Energy (PACE) financing is available for commercial and multi-family building owners. Unlike conventional financing, PACE is repaid in installments through a charge on the subject property’s tax bill, allowing for longer term, flexible financing. Read more about PACE financing guidelines.

  • PACE in New York City: NYC Accelerator PACE is offered by the New York City Mayor’s Office of Climate & Environmental Justice, in partnership with the New York City Energy Efficiency Corporation (NYCEEC), who oversees PACE applications and approvals of the PACE Lenders for New York City. View a list of pre-qualified PACE lenders in New York City.
  • PACE outside New York City: PACE financing is available through the Energy Improvement Corporation’s Energize NY OPEN C-PACE program (EIC). Learn more about the EIC program.

On-Lease Financing for Commercial Tenants

Improving the energy efficiency of leased spaces in commercial buildings is key to supporting building-wide decarbonization efforts. The NY Green Bank offers an innovative financial product for commercial tenants to access financing to reduce their energy consumption, utility costs, and environmental impacts. This may be achieved without upfront investment and with the potential to generate positive cash flow as soon as efficiency improvements are placed in service. Through this innovative financing option, NYGB provides funding to the commercial property owner, who can offer their commercial tenants financing to make energy efficiency improvements to their leased spaces. The tenants repay the building owner via an on-lease repayment mechanism. Contact NYGB to learn more about their offerings.

Financing Options by Typology

Visit NYC Accelerator to learn more about the range of financing options available for different building and ownership types, including an option to contact Financing Specialists from the New York City Mayor’s Office of Climate and Environmental Justice for additional support.

Strategic Decarb 101

Resource Efficient Decarbonization Guide

This guide presents a three-step process for real estate owners, in coordination with engineers and designers, to develop a technically and economically feasible decarbonization plan for their building.  This holistic approach is informed by lessons learned from low-carbon demonstration projects funded through the Empire Building Challenge to help building owners develop and adopt successful plans for retrofitting their building. 

Source: NYSERDA

Federal Incentives

ULI Federal Funding Opportunities 

The resources linked below highlight opportunities for the real estate industry to leverage and/or access federal infrastructure funds to support sustainability, resilience,  health, and real estate and economic development goals. ULI will continue to add additional resources here as new opportunities arise. Investments in decarbonization by developers can have financial returns in the form of lower operating costs, increased property values, and attracting and retaining tenants. In addition, reducing greenhouse gas emissions and creating communities that are less reliant on cars can support developer and tenant ESG goals.

Source: ULI

Engineering Solutions

High Rise / Low Carbon Event Series: Take the Heat!

During this High Rise / Low Carbon series program developed to support the Empire Building Challenge (EBC) and other NYSERDA programs, this two-part event series–focused on building decarbonization–features industry experts highlighting projects deploying breakthrough heat recovery solutions across the commercial and multifamily buildings sector. 

Part 1

Take the Heat! Part 1: Geo & Wastewater will showcase approaches to wastewater heat recovery and geothermal heat projects in New York City.

Opening Remarks

Molly Kiick, Project Manager, NYSERDA

Moderator

Greg Koumoullos, Project Manager, Customer Energy Solutions, Con Edison

Presenters

JP Flaherty, Managing Director, Global Head of Sustainability and Building Technologies, Tishman Speyer
Ed Yaker, Treasurer, Amalgamated Housing Cooperative
Mariel Hoffman, Director of Energy Engineering, EN-POWER GROUP

Panelists

Mariel Hoffman, Director of Energy Engineering, EN-POWER GROUP
Jay Egg, President, Egg Geo
JP Flaherty, Managing Director, Global Head of Sustainability and Building Technologies, Tishman Speyer
Ed Yaker, Treasurer, Amalgamated Housing Cooperative

Part 2

Take the Heat! Part 2 will showcase approaches to ventilation and cooling heat recovery. The session will include presentation and discussion by three EBC partner teams: Vornado, with Jaros, Baum & Bolles (JB&B); Brookfield, with Cosentini; and LeFrak, with Steven Winter Associates.

Opening Remarks

Laziza Rakhimova, Energy Efficiency Business Development Manager, Con Edison

Moderator

Mike Richter, President, Brightcore Energy

Presenters

Christopher Colasanti, Associate Partner, JB&B Deep Carbon Reduction Group
David Noyes, Project Executive, Brookfield Properties
Jonathan Da Silva Johrden, Building Systems Director, Steven Winter Associates, Inc.

Panelists

Karen Oh, Vice President, Energy Innovation and Strategy, Vornado Realty Trust
Christopher Colasanti, Associate Partner, JB&B Deep Carbon Reduction Group
David Noyes, Project Executive, Brookfield Properties
Jonathan Da Silva Johrden, Building Systems Director, Steven Winter Associates, Inc.

Source: Building Energy Exchange

Federal Incentives

Federal Commercial Building Incentives

The recent Inflation Reduction Act (IRA), along with the Infrastructure Investment and Jobs Act (IIJA) from 2021, fund multiple programs and tax incentives to improve the energy efficiency of new and existing commercial and public buildings. The 179D tax deduction is revamped and now includes a new pathway for retrofits. Even larger broad greenhouse gas emission reduction programs under the IRA could be used to reduce emissions from commercial buildings. But the programs use a variety of mechanisms to offer varying incentives with varying goals and criteria. This brief summarizes programs that will or could provide significant resources for energy efficiency in commercial and public buildings.

Source: ACEEE

Strategic Decarb 101

Terminology & Definitions

Insights from Empire Building Challenge 

The following are terms commonly used in the building decarbonization universe:

Carbon Neutral Buildings:

Buildings that produce no net greenhouse gas emissions directly or indirectly. Carbon neutrality spans multiple scopes of associated greenhouse gas emissions including:operations on-site and via emissions associated with third parties delivering energy or products to site and embodied carbon emissions from the full lifecycle and production of construction materials. Emissions are often referred to as scope 1, 2 and 3. Essentially, scope 1 and 2 are those emissions that are owned or controlled by a company. Meanwhile, scope 3 emissions are a consequence of the activities of the company but occur from sources not owned or controlled by it.

Coefficient of Performance (COP):

The ratio of the amount of heat delivered from a heat pump over the amount of electrical input. For example, a heat pump has a COP of 5.0, if it can deliver 5 units of heat for one unit of electricity input. A COP of 1.0 is typical for resistance heat (e.g., toaster or hair dryer). 

Facade Overclad:

An additional weather barrier installed overtop an existing facade to increase building envelope energy performance, thermal comfort, and to reduce ongoing building maintenance. 

Heat Recovery/Recycling:

The capture and reuse of waste heat often incorporating thermal storage techniques, see Time Independent Energy Recovery (TIER).

Net Present Value (NPV):

An analysis of project cash flow over a set period which incorporates inflation and the time value of money; the “upfront” lifetime value of a project. A positive NPV yields a Return on Investment (ROI).

On-site Fossil Fuel:

Fossil fuel consumed typically via combustion within a building for the purpose of heating, cooling, domestic hot water production, or power generation.

Return on Investment (ROI):

The ratio between net income and savings from a project investment over a set period. ROI is typically presented as a percentage for the period of one year.

Simple Payback:

Economic benefits yielded from investment in a project. Simple payback is typically presented in the time (e.g. years) it takes to recover an investment, but does not consider variations in cash flow over time or the time value of money.

Strategic Decarbonization Assessment (SDA):

A mid- to long-term financial planning method for building owners to manage carbon emissions and energy use.

Thermal Distribution:

The means by which thermal energy is moved throughout a building. This includes moving heat through various heat transfer mediums including but not limited to water, steam, refrigerant gas, or ducted air.

Thermal Energy Network (TEN):

Infrastructure that enables heat sharing through a number of thermal transfer mediums and between heat customers and producers who extract heat from multiple sources using varied technologies.

Thermal Storage:

The storage of thermal energy for later use, utilizing various mediums and technologies.

Waste Heat:

Heat or cooling which is typically rejected to the air and not recovered. Waste heat sources include sanitary sewer heat, heat rejected from air source heat pumps, cooling tower heat, heat lost from ventilation exhaust, steam condensate return, and underground transportation, among others.

Source: NYSERDA