The Empire State Building has been an integral part of the NYC skyline since 1931. The 102-story art deco structure totaling 2.8 million gross square feet is heated by district steam.
Following a deep energy retrofit initiated in 2009, Empire State Realty Trust (ESRT) has taken a step further with ESB 2.0, a groundbreaking, comprehensive plan to bring the iconic building to net zero. Empire State Realty Trust and their team of consultants developed a phased roadmap for its entire commercial portfolio that strategically deploys energy conservation and decarbonization measures through 2035. ESRT will optimize existing systems, maximize energy recovery, and enable heat pump integration to decrease steam and electricity consumption.
By 2035, ESRT portfolio will target net zero through an 80% operational carbon reduction, achieved through a combination of energy efficiency measures, a renewable sourced grid, and a 20% offset with off-site clean energy generation and renewable energy certificates (RECs).
Project Highlights
Emissions Reductions
54%
Since 2009, ESRT has reduced emissions at the Empire State Building by 54% and counting through its industry-leading strategic decarbonization planning.
Lesson Learned
Consistent rollout of high-performance standards is crucial. Key internal and external service providers require technical oversight to ensure all their work supports energy and carbon efficiency goals.
Testimonial
“The Empire State Building is as innovative today as it was the day it was built and serves as the international beacon of the possibilities within the built environment to prove the business case to reduce carbon emissions. This important partnership between New York State and commercial real estate leaders creates local jobs, drives technological innovation, improves our communities, and stands as an example for climate-friendly retrofits.”
Tony Malkin
Chairman, President, and CEO
Empire State Realty Trust
Emissions Reductions
75%
By 2035, this plan is projected to reduce energy use intensity by 40% and carbon emissions by 75% from 2019 baseline, assuming the grid decarbonizes according to New York State’s CLCPA goals.
Step 1
Step 1: Examine Current Conditions
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Equipment nearing end-of-life
Tenant load change
Comfort improvements
Resilience upgrades
Efficiency improvements
Asset Conditions
Tenant turnover/vacancy
Carbon emissions limits
Tenant sustainability demands
Owner sustainability goals
Market Conditions
Technology improves
Market demand changes
Market supply changes
Policy changes
To establish a “business-as-usual” baseline scenario, the project team meticulously evaluated the current operational conditions and systems within the Empire State Building. This comprehensive review included:
The building’s operating schedule
Building and energy management systems
Cooling, heating, and ventilation systems
Lighting, plug loads, and tenant IT loads
Domestic hot water systems
The building envelope system
For a precise evaluation, the team analyzed the building’s utility data from the baseline year of 2019. This analysis aimed to dissect energy consumption, utility expenses, and resultant carbon emissions across different fuel types, including gas, steam, and electricity.
In addition to assessing the building’s physical baseline conditions, the team identified several key factors motivating the need for strategic decarbonization initiatives:
The technical and economic imperative to align with municipal and state climate objectives set for 2024, 2030, 2035, and 2050
Specifically relevant was the necessity to avoid penalties linked to Local Law 97 (LL97),
Commitments to the electrical grid
Upcoming major equipment replacements within the next decade
Enhanced building resilience
Existing limitations in cooling capacity
In the short-term, the comparative advantage of district steam in reducing emissions over electricity, due to lower carbon emissions coefficient
To contextualize the project’s carbon reduction targets, the team layered essential carbon-related objectives onto the baseline scenario. These objectives encompassed the emission thresholds defined by LL97 for the periods 2024-2029, 2030-2035, and beyond 2035, along with a goal to slash emissions by 80% from the 2007 baseline. This strategic overlay clarified that although previous energy efficiency efforts had substantially cut emissions beneath the LL97 2024 benchmark, significant further action was required to fulfill the upcoming emission limits and the ambitious 80% reduction goal. Notably, reaching this 80% reduction will demand comprehensive measures beyond merely reducing or eliminating gas and steam usage; it will also necessitate a significant reduction in electrical energy consumption.
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Existing Conditions
This diagram illustrates the building prior to the initiation of Strategic Decarbonization planning by the owners and their teams.
Click through the measures under “Building After” to understand the components of the building’s energy transition.
Sequence of Measures
2022
2023
2024
Building System Affected
heating
cooling
ventilation
The Empire State Building (ESB) energy model has been developed over the past 15 years. Each year, the energy model has been calibrated based on several factors including utility bills, hourly sub-metering, occupancy rates, new construction projects, etc. The energy usage breakdown showed that space heating, broadcast, and tenant loads were the largest contributors to energy usage. This analysis allowed the team to determine where there were the most impactful opportunities for improvement.
The team narrowed down over 200 energy and carbon conservation measures (ECMs) to 60 that have potential to be implemented over the next 15 years. Each ECM was vetted to ensure technical feasibility and to determine its capacity to reduce energy consumption and further decarbonize the building. The energy modeler analyzed the ECMs through the baseline energy model to extract the associated energy, carbon, and cost savings.
To facilitate a comprehensive comparative analysis, the ECMs were organized into five distinct packages. These packages were designed to include varying combinations and quantities of ECMs, enabling the team to examine their collective impact on carbon dioxide (CO2) reduction and Net Present Value (NPV). This strategic grouping allowed for an in-depth comparison of how different ECM assortments align with the project’s goals, offering insights into the most effective strategies for achieving substantial environmental and financial benefits. ESRT is in the process of installing phased, central heat pump systems in multiple buildings, including the Empire State Building, which will begin to reduce steam consumption at these properties. Pilots of energy recovery ventilators on office systems are underway across the portfolio to reduce energy consumption associated with ventilation and mitigate freeze risks. Installation of hydronic heat recovery systems at ESB, including steam condensate recovery, and a new water-to-water heat pump to recover waste energy and reduce steam consumption.
Project Reflections:
Consistent rollout of high-performance standards is crucial. Key internal and external service providers (fit out designers, controls vendors, maintenance contractors, lease negotiators) require technical oversight to ensure all their work supports energy and carbon efficiency goals.
Small deviations of tenant designs from energy code and tenant design guidelines can build up to significant impediments to achieving carbon savings.
Small decisions add up to big impact. Consider long-term ROI and operational consequences of first-cost decisions on all projects.
Central systems may present more opportunities for optimization based on automation and controls sequences.
Capture low hanging fruit – retro-commission & optimize controls for existing systems to eliminate waste energy, increase automation and improve part load efficiencies
Exploit opportunities for heat recovery (e.g. ERVs, WWHPs, HXs). This mitigates the impact of electrification on peak electrical demand
Develop electrification pathway – even partial electrification can yield significant carbon reductions
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
$40.7M
Capital Costs of “CO2 Mid” measure package.
Business-as-Usual Costs
$4.2M / YR
Energy cost savings: 3.7M / YR.
Repairs & maintenance savings: 0.5M / YR.
Business-as-Usual Risks
$0.9M / YR
Avoided LL97 fines, starting in 2035.
Decarbonization Value
$11.8M
Incentives.
Net Present Value
$4.3M
Net difference between the present value of cash inflows and outflows over a period of time.
A crucial component of the financial evaluation involved calculating the energy cost savings attributed to each energy and carbon conservation measure (ECM). These calculations were based on the energy savings predicted by the energy model and refined through detailed tariff analyses performed by project partner, Luthin Associates (now Energy by 5). Notably, the ECMs yielding the greatest energy cost savings were among the most technically challenging, such as the steam phase-out, select building envelope enhancements, and optimizing airside sequences to reduce simultaneous heating and cooling. A significant discovery was that transitioning to electrification—shifting from steam to electricity as a fuel source—does lead to cost savings. This is attributed to a strategic approach of first implementing ECMs that decrease the heating load, followed by adopting electric heat pumps. Heat pumps offer a higher heat output for each unit of energy input compared to electric resistance and traditional fuel sources, thus the increase in electricity costs is effectively compensated by the elimination of steam expenses.
The calculation of individual ECMs’ Net Present Value (NPV) facilitated a rapid evaluation and comparison among them. The NPVs were instrumental in guiding the iterative process of ECM package formulation. Despite their substantial energy cost savings, the steam phase-out and building envelope improvements were among the ECMs with the most negative NPVs, primarily due to their high upfront costs. In assessing these measures, the team also considered their carbon reduction impact, simple payback period, system lifespan, and the cost per ton of CO2 saved, ensuring a comprehensive analysis of each ECM’s performance.
In comparing financial outcomes across the five ECM packages, each was analyzed for both CO2 reduction potential and financial viability. Three packages emerged as NPV positive, while two were NPV negative; however, four packages projected a simple payback period within the study’s timeframe. The “CO2 Mid Reduction” package stood out, projecting a positive NPV of $4,349,957 and a simple payback period of 6.8 years. The implementation of this package would necessitate a capital investment of $40,672,466 (excluding escalation), yielding annual energy cost savings of $3,701,538 and additional operational savings of $546,000. This package’s feasibility is further supported by $11,795,328 in available incentives from Con Edison and NYSERDA, covering approximately 29% of the total required investment. The Decarbonization Roadmap section consolidates the principal financial metrics for all the packages examined, providing a clear overview for decision-making.
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
While energy modeling was completed for all 5 packages of ECMs studied, the CO2 Mid Reduction Package was selected to form the Decarbonization Roadmap for the Empire State Building. This package strikes the best techno-economic balance and is in the process of being implemented. Nevertheless, certain ECMs from the CO2 High Reduction Package are highlighted for in-depth evaluation to ascertain their feasibility, cost-effectiveness, and performance metrics. Based on the results from upcoming pilot studies, these ECMs may be integrated into the long-term decarbonization strategy if they prove viable. Both the CO2 Mid and High Reduction Packages align with the Empire State Realty Trust’s (ESRT) objective to achieve an 80% reduction in carbon emissions by 2030, relative to the 2007 levels, and to comply with the medium and long-term emissions thresholds set by Local Law 97 (LL97) by 2035.
A phased approach that strategically deploys energy conservation measures over the next 15 years can deliver an additional 14.5% reduction in annual building CO2 emissions, with a simple payback of 6.8 years. By the conclusion of the 15-year analysis period, projections indicate that the CO2 Mid Reduction Package will achieve a 64.8% reduction in energy use compared to the 2007 baseline, significantly contributing to the building’s sustainability goals. The most substantial energy savings within this package are anticipated to arise from Phases 1, 2, and 5, with steam phase-out highlighted as a separate component due to its significant impact. These phases are expected to contribute energy savings of 6.1%, 8.0%, and 5.7% respectively, underscoring their critical role in the building’s comprehensive energy reduction strategy.
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
Tags
Insights from the Empire Building Challenge
The Strategic Decarbonization Assessment calculator is a valuable tool that allows building owners and retrofit teams to align their asset decarbonization strategies with their capital investment strategies. The SDA is designed to integrate assessment of multiple requirements including optimizing net present value, replacing equipment close to end of life, avoiding compliance fees, and coordinating electrification of fossil fuel equipment with future electric grid decarbonization.
The SDA is a long-term financial planning tool for building owners to manage carbon emissions and energy use. During the Empire Building Challenge program, the tool guided participants in refining their decarbonization scenarios and identifying the most cost-effective decarbonization plans. Several teams were able to show positive net present value for their decarbonization plans compared to business as usual. This process can benefit many buildings and property owners in New York in better quantifying, representing, and identifying optimal decarbonization scenarios.
The SDA tool was built by Arup and Ember Strategies. It was previously developed for the San Francisco Department of the Environment and modified for NYSERDA use in the Empire Building Challenge.
The SDA tool was created as the one-stop shop for the development and modeling of the business case that supports initiating a decarbonization roadmap. The SDA tool below was developed based on ASHRAE Standard 211 normative forms with a variety of users and use cases across the United States in mind.
The tables and charts on the “Summary (Print Me)” tab outline assumptions, costs, savings, decarbonization trajectory and alignment with NYC’s LL97 requirements. The bar charts and trajectories on this tab should be a graphical representation of the narrative explanation of your plan and business case from the “Narrative & Measures” and “Alternatives” tabs. The “Carbon emissions per year, before offsets” and the “Relative NPV of Alternatives” charts on the “Summary (Print Me)” tab should illustrate the sequencing and timing of equipment replacement, relationships between ECMs and savings/costs.
SDA Inputs Table
The table below describes inputs of the SDA tool and directions associated with each.
On the “Building info and assumptions” tab, users input basic information about the building: floor areas, space types, fuel types and consumption (bill) data. The “Building info and assumptions” tab enables users to communicate building information in a highly customized way at a very granular level. Default values do not need to be changed unless the business case is materially impacted by these estimates (i.e. maintenance costs are reducing in addition to energy costs). Most of these assumptions are found in the “Real Estate Characteristics” drop down menu. Use the drop-down menu to change the default escalations rates for general costs and specific fuel costs over time. Sensitivity analyses that explore a variety of future rate scenarios are encouraged to show that you have considered the sensitivity/fragility/resilience of your plan in a variety of futures.
The “Regulatory Assumptions” drop down on this tab includes NYSERDA default values for fuel specific emissions factors stipulated by LL97. This section also automatically calculates the building’s LL97 emissions limits for the 2024-2029 and 2030-2034 time periods using building typology and GSF inputs on the same tab. Please note: As of 2024, the SDA tool has not been updated to reflect any recent changes to LL97 building classes and missions factors.
On the “Equipment Inventory” tab, users will input major energy using equipment. All the fossil fuel equipment and at least 80% of total energy using equipment should be inventoried and reported on this tab. Very similar or identical equipment can be grouped into one row (e.g. multiple AHUs of generally the same size and age). The date of installation is required as it determines the equipment life and is used to define the Business As Usual (BAU) trajectory – existing equipment is projected to continue functioning until it reaches End of Useful Life and is replaced, like for like, at that time. User-input costs for the like for like replacement are also required inputs to complete the BAU trajectory. Please note, the estimated replacement cost and year installed are required inputs for the SDA graphics. Replacement costs for decarbonization measures and BAU equipment replacement need not be overly precise – these cost numbers should be realistic to ensure ROI and NPV calculations are sufficient for comparative purposes.
NPV and savings calculations in the SDA are significantly influenced by major energy using equipment. To streamline SDA development and simplify analysis, project teams should focus on major equipment and group minor equipment together by age, if feasible. If you are not using the landlord/tenant cost/benefit breakout, keep all equipment in column I (Tenants Own/Operate) marked “No”. This tab also enables a simple summer/winter peak/off peak calculator for demand ECMs, but using this feature is optional and is not a replacement for a full 8760 hour model.
The “Percent energy/carbon by equipment RUL” graphics to the right (cell AY) should populate as expected if everything is input correctly. This visual is often used in business case narratives, but does not appear on the Summary tab.
On the “Narrative & Measures” tab, users narratively define their alternatives and input all the ECMs (costs and energy/carbon impacts) that will be assigned to years on the “Alternatives” tab. The SDA automatically generates two BAU cases: one in which LL97 compliance is not sought and fines are applied, and one in which LL97 compliance is achieved through carbon offsets alone.
Note the measure life column is a critical input as it determines how long the measure’s savings will persist – if the measure ends without replacement, the corresponding uptick in energy/carbon on that year will show in the trajectory graphs.
Some potential users may be generating detailed energy models and bringing the outputs from those models into the SDA. These users may streamline ECMs to minimize data entry and rely on the narrative explanation of the measures. The simplest ECM list in this case may be “Year 1 ECMs”, “Year 2 ECMs”, etc. with corresponding costs and benefits; but be advised that users must explain their measures very clearly where they have aggregated costs and benefits.
On the “Alternatives” tab, users schedule ECMs and review the bar charts and trajectories between those Alternatives. The charts on this tab should illustrate the business case consistent with the narrative section. As stated before, the landlord vs. tenant breakdown for ECMs is not required (column H of Alternatives) and the subsequent charts can be disregarded if not used. Note the Holding period and Analysis periods can be varied independently, but most EBC users keep both set for 20 years.
The “Total Relative NPV Compared to Baseline – Varying Time Horizons” chart (cell AZ) is very commonly used in internal business cases to evaluate cost-effectiveness of the Alternatives over different time horizons, but it is not included on the Summary tab.
Most of the calculations happen on the “Operating Statements” tab, where an annual operating statement is created for each alternative/baseline for the 20-year analysis period. Users can review these statements as needed; however, it is not recommended to edit this portion of the tool directly. This is typically done when troubleshooting a trajectory chart that does not match user expectations.
Download
The SDA tool is available for download below, including a blank version as well as a version with data from a sample building.
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
Tags
Insights from Empire Building Challenge
The discovery phase is intended to provide an initial understanding of the building’s existing conditions, current challenges, and potential opportunities. The data and insights gathered during this phase will be used to create the building’s calibrated energy model. Key activities in this workstream include:
Collecting and reviewing relevant building information
Observing building operations under different conditions
Testing subsystems and their interactions
Creating the Business-as-Usual (BAU) base case
This workstream is critical because it grounds the project team in the reality of the building’s current performance. It also helps build a jointly owned process for uncovering early energy or carbon reduction opportunities that can increase trust and enthusiasm to identify more complex measures as the project progresses.
At the end of this phase, the team should have a clear understanding of the building energy systems, its historical energy and carbon profile, the potential impact of local laws or other building requirements, opportunities for additional metering, and preliminary energy and carbon reduction opportunities.
This workstream provides vital information on current challenges, near and longer-term carbon reduction opportunities, and the accuracy of the energy model. It also creates early wins that build momentum and trust. Getting the most out of this work requires trust-based collaboration between multiple stakeholders, including facilities managers, operations staff, the energy modeler, external contractors, and design engineers. Engaging with tenants to get insight into what drives their loads can also add value and inform this process. Data and insights on the building’s existing condition typically arise from four sources:
Design documents
Data from metered systems
Direct observation and testing
Building operations team feedback
Each source is important, but it is the integration across these four categories of data that leads to deep operational insights and identification of major areas of opportunity.
Inputs
Cross-disciplinary, trust-based collaboration
Tenant insights
Activities
Gather Information: In this phase, project teams should work with the building management and operations teams to collect key information using the sample checklist shown below.
Architectural drawings will be used to build the energy model geometry and assign performance characteristics to exterior wall assemblies.
Mechanical, Electrical and Plumbing Drawings: · Mechanical Schedules · Mechanical Riser Diagrams · M-Drawings (Schedules) of Retrofit/Upgraded Equipment or a Description of Changes · Electrical Schedules · Electrical Riser Diagrams · Lighting Schedules and Detail Sheets · Plumbing Schedules · Plumbing Riser Diagrams
MEP drawings will be used to build the energy-consuming systems in the energy model. These documents will also inform opportunities for equipment replacements based on end of useful life and can be referenced when evaluating equipment locations and available space.
Utility Data: · Minimum 12 months of data for all incoming utilities including electricity, natural gas, district steam, fuel oil · Data from tenant electrical sub-meters (if available) · Data from central plant BTU meters (if available)
Building utility bills showing annual energy consumption and tariffs are required to create an initial energy model. Utility bills allow the energy modeler to calibrate the total energy consumption and the breakdown by fuel type, which is important to track as different fuel sources have different greenhouse gas emissions and associated energy costs.
BMS Operational Information: · Fan run hours · Damper and valve positions · Air and water flow rates · Air handling unit supply air set points · Space temperature set points · Air, water and space temperatures · Chiller/cooling tower/boiler entering and leaving water temperatures · Pump flows during peak and off-peak times · Fan and pump electrical consumption and demand data from VFDs
Relevant BMS parameters include: · Meter data · Equipment hours of operation · Temperature setpoints · Data trends · Fault detection · System mode (manual versus override)
Historical data from the BMS can help align modeled energy use breakdowns with actual operation. Collating and reviewing this data can provide insights into building operations. Sometimes building operation differs from the document design, standards, and even the facilities team’s own understanding as system modifications are made incrementally over the years. Live data can be used to verify system schedules, turndown, and setpoints and drive even more accurate modeling of building operations. Building management systems provide insight into how the building is performing in real-time.
Operator Interviews
Information gathered from building operators can provide deep operation insights, serve to develop trust, and identify areas of opportunity for improvement.
Existing Capital Plans
It is also important to gather data on the “business as usual” (BAU) plan for future capital and operational expenditures. Doing so allows the team to compare ECMs against already planned expenditures and to begin to understand the sequence and timing of ECMs within the context of already-planned building upgrades.
Lease Turnover Schedules
Having insight into lease turnover schedules can help define opportunities for engaging tenants in the low carbon retrofit process and identifying proper phasing of decarbonization solutions in tenant spaces.
Survey the Building: Understanding a building’s existing conditions requires time on-site. Design drawings, operator interviews, and utility data all provide valuable insight, but do not capture the nuances of how the building runs day-in and day-out. Project teams should plan to conduct an initial site walkthrough to confirm high-level information about the building equipment, systems, and operations strategies shortly after project kickoff. As the study unfolds, additional site visits to verify information, gain additional clarity on certain conditions, or evaluate the feasibility of implementing ECMs will be necessary. The more time the project team spends in the building, the easier it will be to capture the building’s existing conditions in the building energy model and to develop ECMs that are feasible. When completing the building walkthrough, the project team should evaluate the following:
Space temperatures: does the space temperature feel too low or too high?
Infiltration conditions: are there noticeable drafts within the space?
Pipe trim and valving: is there proper instrumentation within the system?
Unoccupied space conditions: is equipment running when it should be off?
Central plant operations: is equipment running more often than it needs to be?
Piping/duct conditions: are there noticeable leaks or inefficiencies within the distribution?
Multiple controls for different equipment within a single space or physically grouped thermostats: is it possible that the controls are causing conflicting operation?
Deploy Additional Metering (if required): Collecting documentation and surveying the building will highlight gaps in data or information needed to build a calibrated energy model. To fill these gaps, the project team may elect to deploy additional metering to capture the missing information. Metering ultimately reduces speculation and provides real-time insight into the building’s operations. Project teams should execute the following steps when developing a metering strategy:
Identify and create an inventory of existing meters, submeters and instrumentation.
Verify the accuracy of existing meters and ensure they are properly connected and integrated in the building management system (BMS).
Gain direct access to view the BMS data. Ideally, the team will have viewing access to real-time building operations during the entire duration of the project.
Identify areas where additional meters will be required.
Develop a deployment program for additional metering needs including preferred vendors, meter types, meter quantities, locations for placement, and an installation schedule.
Observe and Test Systems: Building system assessments and functional tests are great ways to capture operating parameters, evaluate performance, and identify issues that can be resolved with retro-commissioning. Project teams should conduct some or all the following building tests to further inform the study:
Test/Assessment
Goals
Reference/Procedure
Building envelope performance and infiltration
Understand the conduction losses/gains through the envelope. This will inform potential envelope opportunities and the baseline energy model.
Refer to ASTM E1186 – 17 for standard practices for air leakage site detection in building envelopes and air barrier systems.
Tenant electric load disaggregation, i.e. plug loads, lighting, IT
Identify high consumption loads within tenant spaces to target critical loads and opportunities.
Select one or two tenants and install submeters on their floor (can be temporary), separating out loads by lighting, IT, plug loads. Analyze consumption and data trends to develop energy conservation measures.
Setpoints and setbacks in all spaces (tenant areas, common area, IT rooms, MEP) during winter and summer seasons
Determine the most energy efficient setpoint/setback while maintaining a comfortable space. Evaluate what is possible within each space. Evaluate the ability of the system to recover from the setback without causing excessive utility demand.
Test potential setpoint and setback temperatures within each space type to determine the optimal energy efficient condition.
Airside controls
Verify that airside controls are configured to optimize energy and indoor air quality. Identify easy-to-implement and inexpensive controls ECMs.
Test procedures will vary based upon the type of airside equipment in use; however, the following assessments are applicable to many airside configurations and can act as a starting point: Step 1: Verify that static pressure setpoint controls are correct per the sequence of operations or current facility requirements. Step 2: Verify that supply air temperature resets are programmed and operating within the correct range. Step 3: Verify that terminal box minimum and maximum setpoint are appropriately set per the latest balancing report. Step 5: Confirm if outdoor airflow stations are installed, and if so, verify that the appropriate amount of outside air is being delivered per the design documents or current facility requirements. Step 6: Verify if a demand control ventilation (DCV) program is in place. If so, confirm that outside airflows are reduced as occupancy is reduced. Step 7: Verify that turndown controls are appropriately reducing equipment temperatures or flows in low load conditions.
Waterside controls
Verify that waterside controls are configured to optimize energy and are load-dependent.
Identify easy-to-implement and inexpensive controls ECMs.
Test procedures will vary based upon the type of waterside equipment in use; however, the following assessments are applicable to many waterside configurations and can act as a starting point: Step 1: Verify that static pressure setpoint controls are correct per the sequence of operations or current facility requirements. Step 2: Verify that supply or return temperature resets are programmed and operating within the correct range. Step 3: Confirm if an economizer mode is available, and if so, verify that the system appropriately enables this mode in certain weather conditions. Step 4: Verify that turndown controls are appropriately reducing equipment temperatures or flows in low load conditions.
BMS anomalies and faults
Identify discrepancies in what the BMS is outputting on the front-end versus the actual observed conditions. Identify easy-to-implement and inexpensive controls ECMs.
For each tested system, compare the BMS outputs to the actual measured data or observed condition. Identify the root cause of the discrepancy and resolve.
Outputs
An additional metering strategy with a timeline for installation and a plan for measurement & verification of new meters.
A preliminary list of operational adjustments and retro-commissioning issues based upon building surveys and building system assessment/tests.
A plan for implementing operational opportunities like setbacks and setpoint adjustments.
Lessons Learned and Key Considerations
Investigation and discovery are an iterative process: — Information from all avenues including reviewing design drawings, walking the building, talking to the facilities team, and performing building tests will be required to create a full picture of the building’s existing condition. Consistent feedback is the key to success.
Organization should be a top priority: — The amount of information collected on the building will be significant. To ease the burden of developing an energy model for the building, information should be verified and organized so that it can be easily referenced throughout the project.
Business operations are as important as facility operations: Energy studies tend to focus only on the architectural and MEP operations within the building. Project teams spend a lot of time understanding how equipment and systems operate and perform, but often don’t spend enough time considering the building’s existing lease turnover schedules, existing capital plans, or hold strategy. These business considerations are critical to understanding the types of decarbonization strategies that building ownership are likely to invest in.
2. Build the “Business-as-Usual” Base Case
Building the business-as-usual (BAU) base case occurs between the Discovery and Energy Modeling phases and includes an analysis of the building’s utility data to gain insight into how the building uses energy at a high level and how that consumption translates to carbon emissions. From this analysis, the project team will be able to evaluate the building’s exposure to mandates such as Local Law 97.
Inputs
Building the BAU base case requires obtaining one full year of utility data, at a minimum.
Activities
Utility Analysis (Baseline Condition): As the project team learns the building, one full year of utility data (at a minimum) will be collected. The project team should visualize this data monthly to further develop its understanding of how and when the building uses energy. The following list of questions can be used to guide the analysis:
What fuel types are consumed by the building?
When are fuel types used the most or the least and why?
Are there unexpected usage peaks for certain fuel types?
What is the building Energy Use Intensity (EUI) and how does it compare to peer buildings?
What is the building Energy Cost Intensity (ECI) and how does it compare to buildings?
What service class is the building in and what is the tariff structure for that service class?
How does demand correlate with cost?
Based on the results of this activity, the project team will begin to form hypotheses about how building systems interact, which end uses are the most energy intensive, and where deeper energy and carbon reduction strategies may be pursued.
Building Performance Standard Impact Analysis: Depending on the jurisdiction in which the deep energy retrofit study is taking place, it may be beneficial for the project team to evaluate the building’s current performance against mandates or building performance standards (BPS) that are in effect. In New York City, for example, Local Law 97 is a BPS that many building owners are focused on. Other jurisdictions may have energy use intensity (EUI) targets or other metrics for performance. The outcome of the impact analysis may help to inform the overall decarbonization approach for the building. Project teams should execute the following steps to conduct a BPS impact analysis:
Step 1: Aggregate annual utility data by fuel type.
Step 2: Convert raw data into the appropriate BPS metric. In the example of LL97, annual fuel consumption is converted to annual carbon emissions with carbon coefficients that are published in the law.
Step 3: Compare the building’s annual performance against the BPS performance criteria.
Step 4: Consider how the building’s performance might change over time as the electric grid decarbonizes. In the example of LL97, a building’s carbon emissions associated with electricity consumption will naturally decline over time as the grid decarbonizes.
Step 5: Calculate impacts of compliance or non-compliance with the BPS. For LL97, building emissions in excess of the allowable carbon limit results in an annual financial penalty.
Step 6: Share results with the building management and ownership teams to further inform that building decarbonization approach.
During the energy retrofit process, the team will discover simple ways to reduce energy consumption that can be implemented almost immediately. With real-time data, the BMS allows the team to analyze how effective the changes to the system are.
Outputs
Deliverables for this task include the following:
Energy, carbon & cost end use breakdowns (monthly)
Demand and tariff structure analysis
Mandate or Building Performance Standard impact analysis
Lessons Learned and Key Considerations
Visualize the data: — Data visualizations can bring insights to light and help project teams explain these insights to non-technical audiences. Making complex energy analysis accessible to all members of the project team, including those without technical backgrounds, will lead to a more engaging and actionable process for all.
BPS impact assessments can alter the deep energy retrofit approach: — Mandates and building performance standards are often successful in getting building owners to think more critically about existing building energy and carbon performance; however, the anticipated impact of a BPS can alter how the project team approaches a deep retrofit project. For example, if an Owner discovers that their building is not subject to non-compliance penalties until 2030 or 2035, they may elect to wait on larger retrofit projects than they would have if penalties were imminent in 2024. It’s important that project teams review BPS exposure with the Owner before settling on a particular decarbonization strategy or timeline.
Consider the grid: — When evaluating a building’s anticipated performance over time in the BAU base case, the project team must take grid decarbonization into account. The overall outlook for the building can change drastically with and without grid decarbonization. Both scenarios must be explored and discussed with the building owner and management team.
3. Identify Preliminary ECMs and Carbon Reduction Strategies
Inputs
Based on the work completed during the “Learn the Building” and “Build the BAU Base Case” tasks, the project team should already have a sense of the ECMs that are a good fit for the building. The project team should review the outcomes of the work done up to this point and develop a list of preliminary strategies so the team can level set on an approach as the project enters the Energy & Carbon Modeling phase.
Activities
• Develop a Tiered List of ECMs: Through the document collection and building system assessments, the project team likely identified low or no-cost operational items that can be implemented immediately. These simple items should be grouped and presented as Tier 1 measures. Deeper measures that require more upfront capital and/or have a longer lead time should be separated out into Tier 2 items. Tiers can be based upon cost or timeframe for implementation. Categorizing measures in this way will support building owner decision-making.
• Conduct a Qualitative Assessment of ECMs: Once the measures are appropriately categorized into tiers, the project team should generate a qualitative assessment of each measure, based on metrics that are important to the building management team. For example, one building team may identify disruption to tenants as their primary go/no-go metric when deciding which strategies deserve deeper analysis. Metrics will vary from project to project.
• Present and Solicit Feedback: Present the tiered list of ECMs, along with the qualitative assessment, and solicit feedback from the building management team. Eliminate ideas that don’t meet the team’s decarbonization approach and welcome new items that the building team may want to pursue that were not originally considered. This process will bolster team engagement and ensure that time spent in the energy model is dedicated to measures that will be considered seriously by the building team for implementation.
Outputs
The output of this task will be a finalized list of energy reduction strategies to study the next phase: the Energy & Carbon Modeling Phase.
Lessons Learned and Key Considerations
Solicit feedback early and often: — In any deep energy retrofit study, there will be several opportunities for the building to reduce energy and carbon. Some of these strategies will be reasonable to the building management and ownership teams, and others will not. To avoid going down the wrong road and analyzing a set of solutions that don’t align with the building team’s vision, the project team should present potential strategies early on and gain consensus on the decarbonization approach before analyzing measures in the building energy model.
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
Tags
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.
Step-by-Step Process to Advise Decarbonization Efforts
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.
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.
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.
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.
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.
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.
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:
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
Tags
Insights from the Empire Building Challenge
A calibrated energy model should play a central role in building out a decarbonization plan because it provides insights on:
Current building energy and carbon profiles, and costs.
Potential energy, carbon, and cost savings of energy conservation measures (ECMs.
The impact of groups of ECMs, and the order of implementation and timeline.
The steps to follow include:
An initial energy model is developed using commonly available building information such as architectural floorplans, MEP schedule sheets, and BMS sequences of operation.
The initial model is then refined and “calibrated” to the building’s real utility data for each utility consumed, creating a baseline condition that ECM’s will be compared against.
The baseline energy model is used as a test bed for individual ECMs to understand potential energy, carbon, and cost impacts.
Evaluate the financial performance of each ECM. These results will be used to identify strategies that are economically viable and should be considered further.
Those ECMs that are economically viable on their own may be grouped together with other ECMs to help build a holistic business case for system optimization and maximum carbon reduction.
During the evaluation process, the project team should take the evolving emission factors associated with utilities such as electricity and steam, as well as the impact of rising average and design day temperatures/humidity, into account.
Key outputs from the energy modeling workflow should include data driven charts showing energy end use breakdown and costs, carbon footprint of each utility, building carbon emissions vs. LL97 targets and fines, and who “owns” the carbon footprint (i.e. tenants, building operations). It is important to note that not all energy models are created equally. For a deep energy retrofit project, the accuracy of the energy model should align with ANSI/ASHRAE/IES Standard 90.1. Code or LEED energy models that were developed for the building in the past are not appropriate for this effort.
Below is a selection of the energy modeling software packages used to support the case study findings presented in this Playbook, and throughout the industry.
An energy model is developed in multiple phases. In the first phase, the energy modeler must build an initial model that captures the geometry, material attributes, occupancy types, MEP systems and basic information about the building’s operations. The energy modeler should also include surrounding buildings that may impact sun exposure on the different facades of the building under study. This initial model will produce a rough estimate of how the building performs every hour during the year. Then in the next phase, the energy modeler must hone the model’s accuracy by “calibrating” the initial model to utility data and detailed building operations information. Code or LEED energy models that may have been created for the building during its initial design and construction should not be used in deep energy retrofit study efforts because they do not reflect the actual performance of the building under study.
Lessons Learned and Key Considerations
Determine energy model accuracy expectations early: Energy model accuracy can vary widely. For a deep energy retrofit study, the energy model should be highly accurate and align with ANSI/ASHRAE/IES Standard 90.1. Building management teams should set model accuracy expectations with the energy modeler at the onset of the project. This will help inform how assumptions are made and where the modeler should or should not simplify certain aspects of the model.
Energy model calibration takes time but is worth the investment: Calibrating the initial energy model is a continuous and iterative process that can span multiple days or weeks depending on the complexity of the building. This time investment is well worth it because the quality of the energy modeling results is directly dependent on the quality of the calibration effort.
Sync energy modeling assumptions with site observations: Even well-maintained buildings with stringent base-building and tenant standards have operational nuances and anomalies. Equipment may be shut off or sequences may be manually overwritten because the system wasn’t commissioned, wasn’t correctly integrated with the BMS, or was causing a localized issue that required a quick fix. This is especially true for older existing buildings that have had operations team turnover resulting in a loss of institutional knowledge over the years. For the energy model to accurately capture savings for ECMs, the calibrated model must reflect real-life operation. The project’s energy modeler should capture these nuances in the calibrated model whenever possible.
Perfection is the enemy of “good enough”: The energy model will never perfectly simulate the performance of the building. There will also be a margin of error that comes from very specific nuances in building construction or operation that can’t be captured by simulation-based software. The project team should set reasonable expectations for the level of modeling and calibration effort that aligns with AANSI/ASHRAE/IES Standard 90.1 but also conforms to the project schedule and status.
Share model visualization with the project team: Energy modeling can be a complex topic that may seem inaccessible to non-technical audiences. To maintain good project team engagement during the energy modeling phase, the energy modeler should prepare and share data visualizations that can help tell the story of how the building uses energy. Graphs, rendering, and infographics are great examples of visual assets that can demystify the energy modeling process.
2. Create the Baseline Energy Model
The baseline model represents the current systems and operations of the building, adjusted for “typical” weather conditions and other criteria. Energy savings for all proposed ECMs will be calculated relative to the baseline model performance.
Inputs
The calibrated energy model
TMY weather data
List of planned upgrades, tenant lease turnover schedules
Activities
Make Necessary Adjustments to the Baseline Model: To create a baseline energy model, the calibrated energy model consumption should be adjusted to account for the following:
Weather: Typical weather data for the site can be modeled using TMY3 data files, which capture and compare typical performance and eliminate any extreme weather event effects that may have occurred in the baseline year. TMY3 files are produced by the National Renewable Energy Laboratory and can be freely accessed and downloaded from the EnergyPlus website.
Occupancy (Lease Turnover or COVID): The baseline energy model should be adjusted to account for any fluctuations in building occupancy that are expected to occur over the study period. For example, tenant lease turnover schedules should be collected during the Discovery Phase and accounted for in the baseline model. Similarly, any disruptions to building occupancy, such as those experienced during the COVID 19 global pandemic, should be captured in the baseline model. To understand the full magnitude of ECM impacts, it is important to separate energy reductions resulting from ECMs versus those resulting from lower occupancy levels.
Planned Upgrades: The baseline model should be adjusted to account for any planned projects that will impact the building’s energy consumption. By capturing these savings in the baseline model, the project team will avoid projecting ECM savings that are no longer available because they have already been captured by planned projects.
The baseline model represents “business as usual” building energy consumption and associated energy cost. It is the reference point used to determine the energy savings of potential ECMs and track progress towards reaching project objectives.
Generate Detailed End-Use Breakdowns: Once the baseline energy model is complete, the project team can begin to gain additional insight into how the building uses energy. A particularly useful output of the model is a detailed end-use breakdown like the one shown below:
The energy modeler will be able to analyze this end use breakdown and identify systems that appear to be high energy consumers. Hypotheses should be vetted by the engineer and facilities team based on their understanding of the building.
Document Assumptions and Review Initial Results with the Team: After the initial baseline model has been built, the energy modeler should review his/her/their assumptions and the resulting load breakdowns with the project team. The modeler should then solicit feedback from the engineers and building operators who have greater insight into the current building operation and systems design. Feedback should be incorporated into the next iteration of the baseline model. The feedback loop between the energy modeler and the building team will be an iterative process that will continue throughout the duration of the project as more information is collected from the building.
Overlay Carbon Emissions: Once the baseline energy consumption results are refined, the associated operational carbon emissions can be calculated by multiplying the annual energy consumption by a fuel-specific carbon coefficient. Carbon coefficients represent the greenhouse gas emissions intensity of different energy sources and are used to determine a building’s total greenhouse gas emissions in tons of CO2 equivalent. This analysis will identify the primary contributors to greenhouse gas emissions in terms of fuel type, system, and ownership (end-user that is driving the demand).
Refine the Preliminary List of ECMs: At this point, the energy modeler and engineer should work together to refine the preliminary list ECMs that was developed in the “Build the BAU Base Case” task. The additional information gleaned from the detailed end use breakdown should be used to validate the initial list of measures and to identify new areas of focus that were not identified in early phases of the project.
Outputs
Deliverables from the baseline energy model work include the following:
Baseline energy model is a reference for potential energy, carbon and cost savings
Building energy consumption and detailed end use breakdowns
Documented baseline system assumptions
Finalized List of ECMs for study in the energy model
Lessons Learned And Key Considerations
Document and review input assumptions: A robust energy model can be a reusable tool that can serve the building team for many years after the initial deep energy retrofit study. To ensure the information within the model is accurate and up to date, any inputs and assumptions should be documented and shared with the building management team. This will give the team the opportunity to correct any assumptions that do not align with the actual operation of the building and will create a log where inputs can be revised and updated as the building evolves.
3. Analyze Individual ECMs
In this task, the energy modeler will run all ECMs in the energy model and extract associated energy, carbon, and cost savings for each. For this task, the energy modeler will need the baseline energy model and the finalized list of ECMs that will be evaluated.
Inputs
For this task, the energy modeler will need the baseline energy model and the finalized list of ECMs that will be evaluated.
Activities
Develop a Modeling Strategy for Each Energy Conservation Measure (ECM): Before the modeler begins modeling each ECM, he/she/they should develop a modeling strategy for each measure including performance characteristics and any important assumptions. Documenting model inputs and modeling strategy for each ECM will make it easier to troubleshoot if there are any surprising results.
Run ECMs in the Model and Analyze Results: Once all ECMs are explicitly defined and the modeling strategy has been finalized, the modeler will run each ECM to create a proposed energy model. The proposed energy model is compared to the baseline energy model to estimate energy, carbon and cost savings. The energy modeler will extract savings for each ECM from the proposed model, which will enable the team to study the individual impact of each ECM and vet the results. Energy savings for individual ECMs should be compared to industry experience to gauge their validity. When surprising results arise, the team must explore why and either justify the inputs or modify them according to additional information.
Refine and Troubleshoot as Needed: Assumptions may need to be revised after this initial review of the results, especially if there are unexpected results.
Compare Mutually Exclusive ECMs: In some cases, the team may develop mutually exclusive ECMs. These competing ECMS must be compared to determine which is the most energy efficient and by what margin. The energy model can be used to run multiple ECM options and compare estimated energy savings between them. The project team should decide which mutually exclusive ECMs should be advanced into the future rounds of analysis before packaging ECM in the next phase of modeling.
Assess Maximum Theoretical Potential for Energy Savings: The final energy consumption of the proposed model will factor in all the energy savings associated with the ECMs. This resulting value is the theoretical minimum energy consumption for the building, assuming all technically viable ECMs are implemented. At this point it is helpful to determine the percent reduction from the baseline and evaluate how this theoretical minimum stacks up to the project objectives. Important questions to answer include:
Does the theoretical minimum energy consumption meet or exceed the project’s energy and carbon goals, and if so by how much?
Which ECMs contribute most significantly to energy and carbon reductions and are they likely to be financially feasible?
Are most of the energy savings attributable to a few select ECMs or are energy savings spread evenly amongst many small measures?
The analysis of the energy modeling results can be facilitated by the creation of ECM waterfall charts which show the baseline energy consumption / carbon emissions and the progressive impact of each ECM on these values. The final energy consumption and carbon emission of the proposed model will establish the theoretical minimum.
Outputs
Outputs and deliverables of this work include:
Initial energy, carbon, and cost savings for individual ECMs. Based on this initial review and analysis, the team will identify further data collection required to refine the modeling assumptions and improve the accuracy of the outputs.
Actionable information regarding which mutually exclusive ECMs are most impactful and should be advanced to the next phase of modeling.
The maximum theoretical energy savings and carbon reduction for the building. This will give the project team an indication of how many ECMs may need to be implemented to meet the project objectives.
Initial energy cost savings for each measure, which can be used to inform preliminary financial analyses.
Lessons Learned & Key Considerations
Review and question surprising results: When reviewing preliminary energy savings, it is important to make sure that the results make sense and question any surprising results. The energy modeling results are only as accurate as the modeling inputs. These assumptions must be vetted to ensure accurate savings. Data collection during this time will be useful to determine modeling assumptions. Assumptions can also be informed by the insights and advice from industry experts. Energy modeling is an iterative process, and the model will continue to be refined as more information is collected.
Identify high priority ECMs: Preliminary results may indicate that most of the energy savings available are attributable to a select number of ECMs. Implementing these select few ECMs may be all that is required to meet the project’s short-term objectives. The project team should focus on refining the inputs for these high impact ECMs to ensure accurate savings.
Remember many small measures have a cumulative impact: To maximize savings and meet long-term project objectives like 80×50 it is likely that a wider array of ECMs will need to be considered for implementation. This holds true especially for buildings that have undergone recent renovations where the most impactful ECMs have already been executed. In this case it may be necessary to evaluate the cumulative impact of many small measures. Therefore, individual measures with minor carbon reduction impacts should not be dismissed too quickly.
4. Group, Sequence, and Package ECMs
As the Energy and Carbon Modeling phase is progressing, a preliminary financial analysis of individual ECMs will also take place in parallel. Preliminary results from the financial analysis will help inform this phase of modeling. Individual ECMs should not necessarily be discarded based solely on their associated capital cost; expensive ECMs can be grouped together with related financially viable measures to optimize savings and make a more comprehensive business case that maximizes CO2 reduction while still addressing investment return hurdles.
Once ECMs have been grouped, an implementation duration and timeline should be established for each. This will depend on factors like short term project budgets, tenant lease turnover, operational budgets, and maintenance schedules. The ECMs should then be sequenced according to their implementation timeline so that energy savings for each ECM can be captured accordingly.
Finally, several ECM packages should be assembled for owner evaluation. Each package will include a different combination of ECMs to be implemented with varying degrees of cost and carbon impact. This variety will provide the owner with options to choose from when striving to balance the project objectives and constraints.
Inputs
For this task the project team will need the following inputs:
Energy, carbon & cost savings from the proposed energy model
Preliminary ECM capital costs estimates: Preliminary results from the financial analysis will provide approximate NPV values for each ECM based on the projected energy cost savings and capital costs. These results will be used to identify those ECMs that are economically viable on their own, those that are worth pursuing due to large carbon impact, and those that should be discarded at this point due to technical infeasibility, cost, or low carbon impact. Those ECMs that are economically viable on their own may be grouped together with related, and costly, but effective, ECMs to help build a stronger business case.
Outputs
Outputs and deliverables of this task include the following:
Finalized grouped and sequenced ECM list.
Results from Packaged ECMS for Owner consideration.
Activities
Establish the Final List of ECMs: Once a preliminary financial analysis has been conducted and approximate NPV values and energy and reductions are calculated for each ECM, the list of measures should be reviewed and finalized. Typically, ECMs will fall into the 5 categories described below, with associated outcomes:
ECM has a positive NPV and has a large carbon impact. ECM should be considered seriously for implementation. Additional QA/QC should be completed to ensure savings are accurate.
ECMs that has a positive NPV but has a minor carbon impact. ECM should be evaluated collectively with other measures, as the impact of many small measures can compound.
ECM has a positive NPV and has a large carbon impact but is technically challenging or infeasible. ECM should likely be eliminated because it will not seriously be considered for implementation by the Owner or building operations team
ECM has a negative NPV (simple payback may still be within the useful life of the ECM) but has a large carbon impact. Financial case for the ECM should be investigated further – the incorporation of maintenance costs, baseline requirements or planned capex unrelated to emissions reductions, and potential incentives in the financial model may improve the financial performance.
ECM has a negative NPV and a small carbon impact. ECM should be eliminated.
Group and Sequence the ECMs: Once the list of ECMs has been finalized, the project team should determine the anticipated duration of time required for completion and the implementation sequence. There are various considerations that should be understood during this part of the modeling process:
The timing of implementation will be unique to each building and vary depending on the types of existing systems and their age and performance. Well maintained systems may be able to be updated and optimized in the short term and replaced in the long run depending on the project objectives.
The sequence of ECMs will depend on various factors including tenant lease turnover schedules, maintenance schedules, and investment cycles.
Interrelated and codependent ECMs should have the same timeline and/or be sequenced appropriately. Some ECMs should be considered as a group to help make a financial case for optimized carbon reductions.
The impact of the ECMs will decrease as the sequence progresses, and savings will be less than if they were directly compared to the initial baseline. This is because as each new ECM is executed and absorbed into the baseline model, this “new” baseline model against which new ECMs are compared performs more efficiently, thereby decreasing the potential for savings.
Create ECM Packages: Once the ECMs have been sequenced, various implementation packages should be compiled for final evaluation. Given that implementing all ECMs will likely be cost prohibitive, the project team should provide the owner with different options along the spectrum of project cost and carbon reduction.
To book end the problem, it is recommended that two of the proposed packages be a “CO2 Maximum Reduction” package and an “NPV Maximum” package. These packages are described below:
CO2 Maximum Reduction: Package includes all technically viable measures, even if they are not economically viable at the time of the analysis. The purpose of this package is to find the technical maximum CO2 reductions achievable.
NPV Maximum: Package includes only those measures that payback within the study period and have positive NPVs. These are the minimum CO2 reductions that can be expected with a financially viable package.
Additional packages should be created and evaluated based on feedback from the project team. These hybrid packages will allow the owner to choose from a wide range of options with different value propositions.
Lessons Learned & Key Considerations
Visualize the results: A helpful tool for analyzing ECMs results is a 2 x 2 matrix that shows the NPV vs. the CO2 reductions for each ECM.
Consider non-energy benefits: Before eliminating measures because they have small carbon impacts, the project team should evaluate the non-energy benefits of the measure. If the non-energy benefits align with the owner’s overall sustainability strategy or make the building a more valuable asset, the building team may still wish to pursue the item. For example, a façade upgrade or replacement may not have a positive NVP but will make the building more competitive with newer buildings.
5. Generate a Decarbonization Roadmap
Once the finalized ECMs have been grouped, sequenced, and packaged, the energy model can be run to obtain final results. These results will be used in the detailed financial analysis and will represent a time-dependent decarbonization roadmap for the building. The final results will include energy savings, energy cost, and CO2 reduction for each package under study, and should phased according to the anticipated implementation timeline to reflect the gradual and overlapping impacts of each measure over a 20- or 30-year time horizon. CO2 reduction over a longer time horizon should include a changing electric grid carbon coefficient to account for grid decarbonization.
Inputs
The inputs for this task include:
The finalized ECM Packages
Carbon coefficients for the Future Grid
Activities
Run Final ECM Packages in the Model and Analyze Results: The modeler should update the proposed model based on the final list of ECM packages and intended implementation sequence. Energy results should be provided for each ECM, even if there are several ECMs that are intended to be grouped together, as this provides granular data for the financial analysis to be conducted down the line. This is important because each ECM may have distinct capital costs, maintenance costs, and incentive implications which may impact the financial viability of the measure.
To reduce the modeling time, it may be assumed that a given ECM’s savings are recognized at once, even if it is anticipated that the ECM and associated savings will be realized over a period of several years. These savings can be split proportionally according to the intended timeline in a post-processing exercise without a major impact on the results, so long as the sequence of the ECMs is correct.
Calculate Savings from the Baseline: The final run of the proposed energy model will produce energy, carbon and cost information that should be compared to the baseline energy model to determine anticipated savings. During this exercise, project teams should consider the following:
The energy model provides energy costs for each run, but it may be beneficial to conduct advanced tariff analysis that evaluates the anticipated annual hourly energy consumption for each package. Given the energy consumption results from the model, and the implementation timeline, a composite file of hourly data can be created to accurately reflect the percentage of each ECM that has been implemented each year. This will result in an energy consumption profile that reflects the expected annual peak and associated demand charges. More accurate utility costs can be calculated using this information. At a minimum, a utility cost escalator should be applied to the initial calculated energy cost savings to capture the impact of changing rates over time.
The anticipated CO2 emissions reductions associated with each ECM can be calculated by overlaying today’s carbon coefficients onto the energy savings results. For a greater level of accuracy, the carbon coefficients from LL97 can be overlaid on the annual energy consumption for the years where this data is available (2024-2029). Beyond 2029, project teams should consider different electrical grid decarbonization projections and overlay evolving carbon coefficients on the yearly energy consumption. For example, New York’s Climate Leadership and Community Protection Act (CLCPA) targets 70% renewable energy by 2030. Assuming the grid meets the goals and schedule of the CLPCA, the carbon coefficient for electricity for the year 2030 will be much lower than it is today.
Outputs
The final energy modeling results should include energy savings, energy cost savings, and CO2 reduction for each ECM package studied.
Lessons Learned & Key Considerations
Total carbon emissions depend on the building and the grid: While building owners have control over how efficient their building is, they cannot control the long-term decarbonization of the electrical grid. Building owners can and should evaluate how they can optimize the energy performance of their building through the implementation of ECMs, but the total associated carbon emissions produced by the building will depend on both the magnitude of the energy consumed and how carbon-intensive the source of energy is. For this reason, it is beneficial to understand how different grid scenarios and emissions factors impact the ECM results. A cleaner grid in 2030 may be the difference between meeting or exceeding the LL97 emissions limit for that year.
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
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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.
Vornado Realty Trust is spearheading a groundbreaking retrofit at 1 Pennsylvania Plaza (PENN 1) in New York City, aiming to reach 100% carbon neutrality by 2040. This ambitious project is part of the company’s broader commitment to environmental sustainability, as outlined in their Vision 2030. PENN 1, a towering landmark in midtown Manhattan, stands at 57 stories and spans approximately 2.5 million square feet of office and retail space. Constructed in 1972, the building is a key component of THE PENN DISTRICT, Vornado’s flagship property cluster.
The roadmap to carbon neutrality at PENN 1 includes advanced waterside heat recovery measures. This strategy focuses on capturing and reusing heat from the building’s condenser water loop, a method that not only reduces heating loads but also facilitates a subsequent transition to electrification through air-source heat pumps and thermal storage. The PENN 1 project demonstrates a ‘thermal dispatch model,’ in which carbon-free energy sources are gradually deployed to fulfill the heating and cooling demands of a large commercial building.
By adopting this innovative approach, Vornado aims to significantly reduce the carbon footprint of PENN 1 while also setting a replicable model for building decarbonization in New York City. This initiative underscores Vornado’s role as a leader in sustainable real estate development, with a portfolio that includes over 34 million square feet of premier assets across New York City, Chicago, and San Francisco. Through Vision 2030, Vornado’s commitment to achieving carbon neutrality and a 50% site energy reduction reflects their dedication to pioneering sustainable solutions in the urban landscape.
Project Highlights
Emissions Reduction
100%
PENN 1 aims to achieve 100% carbon neutrality by 2030.
Lessons Learned
Accurate, calibrated energy models are essential for realistic projections of energy and carbon reductions, guiding the selection of feasible decarbonization measures for complex buildings.
Lessons Learned
Leveraging existing technologies in innovative ways, such as the purposeful dispatch of thermal energy and optimizing for scalability and affordability, can be as impactful as waiting for new technological breakthroughs.
Lessons Learned
Training and involving operations teams in the design and implementation phases are crucial for ensuring systems function as intended.
Step 1
Step 1: Examine Current Conditions
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Equipment nearing end-of-life
New heat source potential
Tenant load change
Resilience upgrades
Efficiency improvements
Asset Conditions
Repositioning
Capital event cycles
Carbon emissions limits
Tenant sustainability demands
Investor sustainability demands
Market Conditions
Technology improves
Policy changes
Utility prices change
Fuels phase out
The project team initially explored two packages of combined reduction measures to assess the impact of eliminating fossil fuels and electrifying the building’s heating end uses. Individual measures studied earlier in the project were selected and combined with additional infrastructure enhancements to develop two electrification packages summarized as follows:
Beneficial Electrification: Incorporates a suite of tenant, airside, and envelope upgrades along with the installation of air source heat pumps working in conjunction with the cogeneration plant to keep the building heated; eliminates all district steam resources.
Full Electrification: Incorporates the same set of upgrades but utilizes more air source heat pumps in place of the cogeneration plant.
The thermal dispatch approach utilized at PENN 1 allows the building to intelligently prioritize low-carbon thermal resources for operational building needs ahead of those that are more carbon intensive. This strategy, enabled by electrification of heating loads and heat recovery measures, will reduce energy use by 22% and carbon emissions by 38% by 2030.
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Existing Conditions
This diagram illustrates the building prior to the initiation of Strategic Decarbonization planning by the owners and their teams.
Click through the measures under “Building After” to understand the components of the building’s energy transition.
Sequence of Measures
2022
2023
2024
2025
2030
Building System Affected
heating
cooling
ventilation
Reduce Energy Load
Envelope Improvement: install new triple pane glazing
Induction Units Replacement: replace constant volume perimeter induction units with VAV units
Enhance Tenant Fit-out: Install high-efficiency equipment and engage with tenants to ensure best-in-class fit-out during turnover
Thermal Layering: Heating loads are sequenced and prioritized to first engage low-carbon resources to meet the building’s heating demand, and then use next-available or higher carbon-intense thermal resources to come online. For example, first use low carbon electric thermal resources from water-source heat pumps, and then utility steam to meet remaining demand. When the ASHPs are installed, they will be dispatched second, as another low carbon alternative. This approach makes it possible to meet peak heating loads during extreme cold events with relative ease and low carbon emissions.
Recover Wasted Heat
Condenser Water Heat Recovery: This tactic will use water-source heat pumps (WSHP) to utilize heat from the condenser water system to supplement heating hot water for the building’s hydronic system.
The WSHP method creates a “heat-lifting” machine that will raise the temperature of hot water to match the building’s existing supply – usefully extracting heat that would otherwise be wasted and reducing steam heat emissions.
Computer Room Air Conditioning (CRAC) Conversion: Convert existing condenser water cooled DX units to chilled water-cooled units to maximize heat recovery and improve cooling efficiency
Partial Electrification:
Electric Chillers: Replace steam turbine chillers to electric chillers
Partial Air Source Heat Pumps: Install ASHPs to partially cover heating load served by the secondary hot water loop
Full Electrification:
Cogen Decommissioning: Retire cogeneration plant and eliminate on-site fossil fuel usage; keep district steam as back-up
Thermal Storage: Install thermal storage systems to enable full-building electrification by shifting and support heating and cooling peaks and empower grid flexibility
More ASHPs: Install ASHPs to cover remaining heating load
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
$4.15M
Capital costs of decarbonization (est. in 2025 $).
Business-as-Usual Costs
$8.01M
Energy cost savings (2026–2050 [25 yrs]): 3.56M.
Repairs and maintenance savings: 99k.
BAU cost of system replacement/upgrades: 2.7M.
Residual cost (remaining equipment value): 764k.
Business-as-Usual Risks
$724k
LL97 fines avoided starting in 2030.
Decarbonization Value
$1M
Incentives.
Net Present Value
$1.015M
Net difference between the present value of cash inflows and outflows over a period of time.
Heat recovery remains a very costly endeavor. Even with the Empire Challenge award of $1 million, the energy savings alone yields a payback in excess of 7 years. Compared to other energy conservation measures with rapid ROIs, this is not in the realm of being a “no-brainer.” However, unlike other retrofits or upgrades that target electricity savings, this project reduces our future reliance on district steam, a utility that is expected to undergo very high cost escalations as they incorporate renewables into their production.
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
The Vornado team has gained countless lessons-learned on their decarbonization planning journey. The following are essential insights from the project team:
Insights from the energy model
The predictive energy model revealed that while the renovations to the building will yield significant energy and carbon reductions, the energy consumption from tenant spaces, such as computer and plug loads, must also be significantly reduced and intelligently managed to drive down the carbon intensity of the building (and reduce/eliminate exposure to LL97 through the 2030 compliance period).
While every effort was made to ensure that the model reflects the design team’s best understanding of the building’s existing conditions and future usage, the modeled energy consumption, energy cost, and carbon emission estimates will likely vary from the actual energy, cost, and carbon of the building after construction. This is due to variables such as weather, occupancy, building operation and maintenance, changes in energy rates, changes in carbon emission coefficients, and energy uses not covered by the modeling scope.
Underscoring the importance of an iterative design process
In the first iteration of the decarbonization strategy, the Vornado team approached the project with an all-or-nothing electrification mindset. They found that the strategies that achieve the deepest levels of decarbonization through fully eliminating district steam and co-generation waste heat as heating sources may not be practical nor cost efficient to implement in such a complex existing building. So, they went back to the drawing board.
In the second iteration of the project, a more holistic strategy emphasizing the following core principles was developed:
Re-use existing infrastructure (i.e., piping and ductwork) where possible
Recovery wasted heat from internal loads
Electrify heating loads affordably with heat pumps
Compress space requirements for electrification equipment/systems
Dispatch thermally stored energy to shift and smooth loads to promote grid flexibility
Resource Efficient Electrification framework: With these guiding principles, the Vornado team developed a new strategy that follows the Resource Efficient Decarbonization Framework, which JB&B refers to as “Reduce, Recycle, Electrify”. Phasing, cost compression, and space compression were prioritized so that measures are more likely to be installed and scaled to other Vornado properties.
Key takeaways on the broader decarbonization decision-making process
Invest in a Calibrated Energy Model – In large and complex buildings, building owners should commission a decarbonization study with an investment-grade calibrated energy model. Energy models should be custom built to the building’s unique characteristics, ensuring the analysis of retrofits are accurate and adds confidence to decision making. An energy model is a flexible tool that captures interactivity of all systems and ensures the strategies and measures studied have realistic energy and carbon reduction projections.
Just Because It’s Feasible Doesn’t Mean It’s Practical – Anything is possible in an energy model. Technical teams must be aware that building ownership teams care about more than just the energy and carbon results from the model. Strategies must be practical in real-world scenarios and should aim to re-use existing infrastructure where possible, minimize disruption, use space efficiently, and compress costs as much as possible. Technical teams must be prepared to show building owners how a particular measure will be installed practically.
Don’t Expect 5–7 Year Paybacks on Decarbonization Measures – Deep decarbonization measures will likely have long paybacks. This is due to high upfront costs of electrification technology, supporting infrastructure, and invasive retrofitting. Working against these high-efficient electric systems is the price of electricity, which is 5 to 6 times more expensive per unit of energy than natural gas. Simple payback analyses are unable to capture the true value of decarbonization investments, including non-energy benefits. Ownership teams have to adjust their payback expectations when considering deep decarbonization measures.
Technological Innovation Isn’t the Only Innovation – There is new and exciting technology out there that has the potential to revolutionize the way we electrify buildings, but in the meantime, there are innovative approaches to electrifying buildings today with currently available technology. Purposeful dispatch of thermal energy sources and optimization for scalability, practicality, and affordability are innovative strategies.
Conditioning Exhaust Air – Recycling waste heat from exhaust air streams isn’t a new idea, but using the refrigeration cycle to extract and lift heat from exhaust air streams to serve heating loads is a new and innovative concept. Essentially, by air conditioning the exhaust air, like traditionally avoided toilet exhaust, heat can be recovered and lifted to higher temperatures by a heat pump to offset heating loads. The reverse is also true in the summertime, where exhaust air can serve as a heat rejection medium for the chilled water production of chiller plants.
Potential of Low Temperature Hot Water in Existing Chilled Water Coils –Low temperature hot water enables heat recovery and air source heat pumps to have a big impact, but reconfiguring all comfort heating systems in existing buildings to be low temperature is difficult and costly. The following approach offers a more practical alternative:
Partially electrify high temperature hot water systems (i.e., perimeter systems) with water-source heat pumps and condenser heat recovery. This allows existing distribution infrastructure to stay in place – critical to wider spread of heat pump adoption.
Transition air handling unit steam or hot water coils to low temperature, which can be served by air source heat pumps. The cost and scope of coil replacements is much more manageable than replacing all heating systems with low temperature hot water infrastructure. In some cases, existing chilled water coils can be used with low temperature hot water and become a modified change-over coil, negating the cost of replacement.
Operations Team Integration: These decarbonization strategies are new and complex. Existing operations teams must be part of the design and implementation of these systems and training is of critical importance. A system that is designed to be low-carbon will not be successful if it is not operated per the design intent and understood thoroughly by those operating them.
Disruption and Phasing: Some of the best decarbonization strategies are also some of the most disruptive. Phasing must be based upon several factors including the rate of grid decarbonization, leasing turnover cycles, capital planning cycles, and equipment nearing its end of useful life.
As a partner of the Empire Building Challenge, BXP will complete a decarbonization pilot project at 601 Lexington Avenue. The 1.52 million square foot, 59-story, multi-tenant premier workplace in midtown Manhattan was constructed in 1977 and features building systems typical among commercial high-rises of a similar vintage. The innovative measures planned for implementation demonstrate a scalable and replicable decarbonization opportunity within a difficult-to-decarbonize building type.
As part of their demonstration project, BXP will install water-to-water heat pumps to transfer heat from the condenser water loop to secondary water systems. Recovered heat will then be used to offset perimeter heating loads. By deploying existing technology in a novel way, this project creates a thermal network which utilizes heat that would otherwise be rejected to the atmosphere from the building’s cooling system. BXP will reduce the building’s annual steam consumption by over 30% with this innovative thermal system.
BXP is a fully integrated real estate investment trust and is the largest publicly traded developer, owner, and manager of premier workplaces in the U.S. with a portfolio spanning 54.5 million square feet.
Project Highlights
Progress
Construction drawings are complete, and the project is awarded to the selected General Contractor. Water source heat pump equipment procurement has also been released.
Steam Use Reduction
30%
Heat recovery retrofit at 601 Lexington Ave will reduce annual steam consumption by over 30%. The project uses an existing technology in an innovative way to create a thermal network in the building, using heat that would otherwise be wasted.
Lessons Learned
Reducing demand and dependence on fossil fuel driven heating systems is an enablement step for building decarbonization.
Testimonial
“At BXP, we are committed to carbon-neutral operations and the advancement of built environment climate action. Climate action is collective action and alongside our partners at Norges Bank Investment Management, we are thrilled to pursue this decarbonization initiative at 601 Lexington Avenue.”
Ben Myers Vice President, Sustainability
Boston Properties, Inc. (BXP)
Lessons Learned
The project is highly replicable elsewhere within the BXP portfolio and provides a bridge to carbon neutral planning.
Step 1
Step 1: Examine Current Conditions
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
New heat source potential
Efficiency improvements
Asset Conditions
Carbon emissions limits
Owner sustainability goals
Market Conditions
Technology improves
Policy changes
Utility prices change
Fuels phase out
BXP is committed to carbon-neutrality by 2025 for its actively managed occupied office buildings. Starting in 2010, BXP adopted a phased approach with a long-term goal of achieving low site energy use and reducing GHG emissions at 601 Lexington Ave. Compared to a 2010 baseline, BXP has reduced the building’s GHG Emissions by 47% and site EUI by 33%. The notable reduction in energy use was achieved through a series of targeted energy efficiency measures, including a building automation system upgrade, installation of Variable Speed Drives on all major HVAC equipment pumps and fans, lighting upgrades, modernization of the central chiller plant (replacing steam chillers with high efficiency variable speed electric chillers), and optimization of operational controls.
To accelerate decarbonization efforts, the next phase of retrofit projects should be geared to reduce district steam consumption within the building. This initiative aligns with BXP’s decarbonization strategy and energy efficiency objectives and positions the building on a path towards full compliance with Local Law 97.
The heat recovery project focuses on minimizing the dependence on district steam, a fossil-fuel sourced commodity. This project demonstrates a replicable decarbonization solution in existing commercial high-rise buildings and joins a list of energy conservation measures already deployed at the property.
To compare the energy and carbon reduction impact of the measure on a business-as-usual scenario, a comprehensive energy analysis was performed to establish a baseline operation and compare alternatives. The effort included review of existing HVAC systems, electrical infrastructure, space constraints, submetering of heating and cooling loads, potential for energy recovery to offset heat loads, and evaluation of energy use and costs.
The detailed energy analysis indicated a considerable reduction in energy and GHG emissions compared to baseline energy use and significant utility savings per year.
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Existing Conditions
This diagram illustrates the building prior to the initiation of Strategic Decarbonization planning by the owners and their teams.
Click through the measures under “Building After” to understand the components of the building’s energy transition.
Sequence of Measures
2024
2034
Building System Affected
heating
cooling
ventilation
The project at 601 Lexington Avenue will deploy existing technology in a novel way, creating a thermal network that recovers and utilizes heat which is otherwise rejected by the cooling towers.
Through NYSERDA’s Empire Building Challenge, BXP will install water source heat pumps (WSHPs) that will capture waste heat from the condenser water loop. The recovered heat will be reused into the building’s perimeter heating.
Currently, the building condenser water system carries heat from base building and tenant cooling systems to the cooling towers, where it is rejected evaporatively to the atmosphere. In office buildings, this heat is often constant and available for recovery year-round. In the proposed measure, WSHPs will be installed. They will replace the function of the cooling towers during the heating season and will reclaim heat from the condenser water loop for beneficial use. An automated bypass valve will divert condenser water from the cooling towers, retaining as much heat in the building as possible for recovery by the WSHPs. The heat recovered will be reused in the building’s heating systems and will significantly offset reliance on fossil fuel-based steam. These measures will reduce annual steam consumption by an estimated 30%.
These measures partially electrify building heat sources while recovering waste heat for beneficial re-use. This results in reduced energy consumption and enhanced demand management. These measures are replicable for existing buildings, designed to be both space-efficient and cost-effective.
In addition to the WSHPs, air source heat pumps (ASHPs) may be installed in the future to produce low-temperature hot water to cover some of the remaining heating loads. The project team plans to continue investigating ASHP infrastructure within the physical space constraints of this occupied building to minimize reliance on steam heating.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
$3.65M
Capital costs of decarbonization.
Business-as-Usual Costs
$262k / YR
Energy cost savings: 287k / YR.
Repairs & maintenance savings: 25k / YR.
Business-as-Usual Risks
$120k / YR
LL97 avoidance from 2030-2034.
No fines in 2035+ assuming electric grid coefficient aligns with CLCPA goals.
Decarbonization Value
$1.1M
Incentives.
Pursuing ConEd Rebates through the Clean Heat Rebate Program.
Net Present Value
$525k
Net difference between the present value of cash inflows and outflows over a period of time.
A simple payback measure as a standalone analysis does not accurately represent the benefit of decarbonization over time. A long-term outlook for decarbonization investments that accounts for utility cost escalations, building performance standard compliance fine avoidance, procurement costs to meet voluntary carbon neutral operations commitment over the life-cycle of the project, and other risks associated with taking the business-as-usual approach are critical while creating a business case for decarbonization.
The financial analysis for the project included a relative comparison to business-as-usual costs under various scenarios as described below:
Scenario 1 represented the financial impact of paying Local Law 97 penalties;
Scenario 2 represented a proactive procurement of carbon credits to minimally comply with Local Law 97;
Scenario 3 represented RECs and Carbon Credit procurement costs to achieve the goal of Carbon Neutral Operations by 2025.
The proposed project has a positive NPV when compared to a business-as-usual scenario and is a critical first step in the building’s long-term decarbonization plan as it significantly reduces the dependence on district steam for building heating loads. This is an enablement step for future decarbonization phases in 2034 and beyond. Additionally, the project is highly replicable elsewhere within the BXP portfolio and provides a bridge to carbon neutral planning.
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
To advance the building’s broad decarbonization objectives, and through the reduce, recycle, electrify approach, the team studied energy and carbon emission reduction pathways for 601 Lexington Avenue through a robust, collaborative process with multiple stakeholders.
The decarbonization projects require a phase-in plan and a multi-step approach, which includes technical analysis, detailed design, procurement, and implementation. The preliminary technical analysis for the decarbonization roadmap was performed in Q4 of 2022 as part of the Empire Building Challenge application. The first phase of the decarbonization roadmap is the Condenser Water Heat Recovery project, which received NYSERDA funding through the Empire Building Challenge. The full design (DD and CD) of this project was completed in 2023 and construction is expected to be complete in 2025.
On-site decarbonization efforts may be furthered in a subsequent second phase implemented in 2034 with electrification of heating and DHW through air source heat pumps. It is anticipated that the heat pump technology and pricing will continue to improve; because of that, the energy and GHG reductions reflected in the carbon neutrality roadmap below are conservative estimates. As an interim phase, starting in 2025, the building will achieve Carbon Neutral Operations for Scope 1 and Scope 2 emissions by offsetting them through a combination of renewable energy and carbon credits procurements.
A Rational Approach to Large Building Decarbonization
Tags
Project Highlights
Step 1
Step 1: Examine Current Conditions
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
Tags
Lessons from New York’s Empire Building Challenge
This article, published in NESEA’s BuildingEnergy magazine (Vol. 40 No. 1), addresses common “decarbonization blind spots” that impede progress and shares insights gained from the incremental methodology and integrated design process pioneered through NYSERDA’s Empire Building Challenge.
A baseline assessment is key to understanding current systems and performance, then identifying conditions, requirements or events that will trigger a decarbonization effort. The assessment looks across technical systems, asset strategy and sectoral factors.
Building System Conditions
Asset Conditions
Market Conditions
Step 2
Step 2: Design Resource Efficient Solutions
Effective engineering integrates measures for reducing energy load, recovering wasted heat, and moving towards partial or full electrification. This increases operational efficiencies, optimizes energy peaks, and avoids oversized heating systems, thus alleviating space constraints and minimizing the cost of retrofits to decarbonize the building over time.
Step 3
Step 3: Build the Business Case
Making a business case for strategic decarbonization requires thinking beyond a traditional energy audit approach or simple payback analysis. It assesses business-as-usual costs and risks against the costs and added value of phased decarbonization investments in the long-term.
Decarbonization Costs
Business-as-Usual Costs
Business-as-Usual Risks
Decarbonization Value
Net Present Value
Strategic Decarbonization Action Plan
An emissions decarbonization roadmap helps building owners visualize their future emissions reductions by outlining the CO2 reductions from selected energy conservation measures. This roadmap is designed with a phased approach, considering a 20- or 30-year timeline, and incorporates the evolving benefits of grid decarbonization, ensuring a comprehensive view of long-term environmental impact.
Project Team
Additional Resources
Tags
Insights from Empire Building Challenge
Large commercial and residential buildings must overcome various hurdles before implementing deep retrofits or capital projects that help achieve building decarbonization. This section addresses technical barriers and questions often faced by building owners and retrofit project developers.
Decentralized Systems and Tenant Equipment
Access to Occupied Spaces.
Lease Concerns.
Regulatory Limitations of Rent Stabilized Apartments.
The building owner is required to provide free heat and hot water.
No mechanism to recover investment in new systems is necessary to achieve decarbonization.
Buildings are capital constrained.
Split Incentives (e.g. tenants pay for energy).
Facade and Windows
Work must be completed at the end of facade/window useful life; very long useful life.
Building codes.
Glazing reduction at odds with aesthetic/marketability concerns.
Difficult installing with occupied spaces.
Reduce Local Law 11 recurring cost via overcladding
Aesthetic concerns
At odds with historic preservation
Capital intensive
Lot line limitations
Technology Limitations
Need higher R-value/inch for thinner wall assembly:
Vacuum insulated panels
Aerogel panels/batts
Zero-GWP blowing agents for closed cell spray foam (nitrogen blowing agent needs to be more widely adopted)
Ventilation
Energy Recovery Ventilation (ERV)
Space constraints
System tie-in point accessibility/feasibility
Rooftop Supply Air (Reznor) Unit Alternatives
Heat pump alternatives to eliminate resistance heat
Combine with ERV
HVAC Load Reduction (HLR) Technology
Vent or capture exhaust gases
Space constraints
System tie-in point accessibility/feasibility
Central vs. Decentralized Ventilation Systems
Direct Outside Air System (DOAS)
Modular perimeter ducted air heat pumps:
Competition for leasable space
Space constraints
Ventilation Points-of-Entry
Aesthetic concerns
Lot line facades/building setbacks
Competition with leasable space
Space constraints
Heat Pump Limitations
Variable Refrigerant Flow (VRF)
Fire and life safety concerns about volume of refrigerant gas located within occupied spaces.
Regulatory risk from new refrigerant policies
PTAC and VTAC
Ducted Supply/Exhaust Air Source Heat Pumps
Domestic Hot Water
Central DHW Systems:
Limited domestic production.
Performance not confirmed by independent third parties.
More demonstration projects needed.
Decentralized DHW Systems
More open-source interconnection between devices/interoperability is needed to achieve energy distribution flexibility and capacity expansion:
Air source that has a manifold connection to interconnect with water source or refrigerant gas distribution.
Interconnectivity/simplified heat exchange between refrigerants/water/air, etc.
Other options and add-ons.
Steam Alternatives and Barriers
Below are high temperature renewable resource alternatives to district steam. These alternatives are limited and face barriers to implementation due to cost, scalability, and other factors.
Deep Bore Geothermal
Renewable Hydrogen
Carbon Capture and Sequestration
Biomethane
Electric Boilers
High-temperature thermal storage
Hight-temperature industrial heat pumps
Waste Heat Capture and Reuse
Fission
Barriers to Electrification and Utility Capacity Limitations
Building Electric Capacity Upgrades
Electric riser capacity
Switchgear expansion
New service/vault expansion/point-of-entry space constraints
Capacity competition with other electrification needs:
Space heat and cooling
DHW
Cooking
Pumps and motors
Local Network Electric Capacity Upgrades
Excess Distribution Facility Charges (EDF)
Contributions in Aid of Construction (CIAC)
Gas Utility Earnings Adjustment Mechanisms (EAM) focused on System Peak Demand Reductions
Partial Electrification concepts achieve deep decarbonization but do not necessarily achieve peak gas demand reductions (debatable)
Total Connected Loads and Peak Demand drive need for capacity upgrades
Demand reduction strategies do not obviate capacity limitations unless the utility accepts the solution as a permanent demand/load reduction strategy.
Battery Storage:
Fire danger
Space constraints
Electricity distribution limitations
Structural loads
Building Automation/BMS/Demand Response:
Cost
Integration limitations; Blackbox software
Microgrid development cost and lack of expertise
On-site Generation:
Space constraints
Gas use; Zero carbon fuels availability is non-existent
Structural loads
Pipe infrastructure
Thermal Storage
Space constrains
Structural loads
Technology limitations:
Vacuum insulated storage tanks
Phase change material (DHW, space heating)
Geothermal (ambient temperature), Deep Bore Geothermal (high temperature) or Shared Loop District Energy Systems provide cooling and heating with lower peak demand than standard electric equipment
Building pipe riser limitations; need additional riser capacity:
Building water loops are typically “top down” – cooling capacity is typically located at rooftop mechanical penthouses; cooling towers at roof. Some exceptions to this rule
Space Constraints
Drilling Difficulty:
Outdoor space constraints for geothermal wells
Difficult permitting
Mud and contaminated soil disposal
Overhead clearance constraints for drilling in basements/garages
Shared Loop/Thermal Utility Limitations:
Requires entity that may operate in public ROWs and across property lines
Utilities are limited by regulations for gas, steam or electric delivery versus shared loop media (ambient temperature water).
Only utility entities can provide very long amortization periods
Utilities are best suited to work amid crowded underground municipal ROWs.
Deep Bore Geothermal Limitations:
Requires test drilling and geological assessment
Seismic risk
Drilling equipment is very large – more akin to oil and gas development equipment
Subsurface land rights and DEC restrictions
Other Energy Efficiency/Conservation Measures with proven/attractive economics (these measures are limited by lack of capital or knowledge)
