The federal government manages some 429,000 buildings totaling 3.34 billion square feet. It owns approximately 80% of that space and leases 20%.
A portfolio of that mammoth size clearly has an impact on the buildings industry. Just the 20% of the federal portfolio that is leased – some 670 million square feet – is far larger than the 420 million square feet of office space in New York City, the nation’s largest building market. The federal government’s facility policies influence industry regulations, new technology, suppliers, and energy management practices.
The Bush and Obama administrations have established a number of targets for facility energy use. GSA,DOE and other federal agencies are developing a variety of approaches, including performance contracting, deep retrofits, a green “proving ground,” and analytics tools. The private sector can learn from the government’s successes.
The Impact of Performance Contracting
Performance contracting offers not only little or no initial cost to a cash-strapped federal government but also a broad and deep approach to upgrades of existing buildings. It is a pivotal part of the federal government’s plan to achieve energy-efficient facilities. The government is working the strategy from several angles.
Energy savings performance contracts – or ESPCs, as they are known in the federal code – refer to contracts awarded to energy service company (ESCOs). After completion of an investment-grade energy audit, an ESCO provides a turnkey solution for a retrofit that is guaranteed to provide a given decrease in energy consumption. The stream of future energy savings pays the ESCO for the project, resulting in little or no upfront costs for the government. The terms of such contracts can be as long as 25 years. ESPCs are also available to federal agencies through a utility energy service contract (UESC) with a facility’s energy supplier.
In 2011 President Obama challenged the federal government to enter into $2 billion in performance contracts within two years. The president added $2 billion to the challenge in 2014, making the total goal $4 billion by the end of 2016.
Accelerators for Performance Contracts
The president’s performance contracting challenge comes with its own implementation challenges. Projects with large scopes and long-term commitments to an ESCO provoke caution. Facility managers may not be familiar with the energy management technologies or comfortable with an ESCO’s control of some building operations.
Another factor is the nature of the performance contract itself. “The contracting process is unfamiliar to them because it’s a negotiated process based on best value, not a low bid. That’s a whole different ball game,” says Donald Gilligan, president of the National Association of Energy Service Companies.
To assist in developing ESPCs, the DOE’s Federal Energy Management Program (FEMP) has introduced a web-based project entry and tracking system, eProject Builder, that standardizes performance data for ESPCs across all government agencies. The system compiles data from previous ESPCs, enabling ESCOs to compare historical data to estimated savings for proposed retrofits.
For smaller federal facilities under 200,000 square feet, FEMP and GSA have developed a new funding approach. The ENABLE program is designed to speed the award and construction process to 6 months or less. Pre-qualified vendors and pre-negotiated pricing expedite a contracting process that offers the same benefits as conventional ESPCs.
“A small facility is not generally a good candidate for an extensive retrofit,” says GSA’s Kampschroer. “But sometimes if you go in and tune up the controls, do a little HVAC work, and change the lighting, you get 50% of the savings from 5% of the labor.”
Mining Results from Deep Energy Retrofits
The National Deep Energy Retrofit (NDER) project, a pilot launched by GSA in 2012, is designed to push the savings from performance contracting well beyond that of typical ESPC projects. The ultimate goal: Discover innovations that will allow existing buildings to achieve net-zero energy consumption.
The NDER currently encompasses 32 facilities totaling more than 20 million square feet. As with other ESPCs, NDER projects must self-finance in 25 years or less. The program emphasizes renewable energy and other innovations. Identified improvements must be linked to the expected useful life of the equipment and the facility.
Based on results in FEMP’s database, the average energy savings for ESPC projects across all federal agencies is 18%. However, the average anticipated
savings for the first 10 projects in the NDER pipeline is 38%, according to 360° Degree Perspective on Federal Deep Energy Retrofits, a 2014 report by GSA and the Rocky Mountain Institute.
A key component of the NDER program is maximizing a retrofit’s impact by bundling all improvements into one deep package.
“You can combine the quick payback items with the long payback items and get an average that does much better than if you looked at them individually. That is a big lesson learned,” says Kevin Kampschroer, Director of GSA’s Office of Federal High-Performance Green Buildings. “Every time we touch a building, we’re looking to do as much improvement as we can.”
To ensure maximum savings from deep retrofits, GSA is currently looking at ways to include operations and maintenance (O&M) measures within ESPCs. GSA buildings typically contract for O&M services on a per-system basis. However, both GSA and ESCOs see value in integrating O&M into whole-building ESPCs.
A Proving Ground That Speeds Technology to Market
In the deployment of new technology, a hurdle often higher than the discovery itself is its transformation into a viable commercial product. And the buildings industry is not known for a great willingness to employ new and unproven products.
GSA’s Green Proving Ground (GPG) program is designed to clear this hurdle and help federal agencies meet energy targets. The program leverages GSA’s building portfolio as a real-world place to evaluate new technology.
“The program addresses the risk of high first cost and possible underperformance that might otherwise stymie adoption,” says Kevin Powell, director of GPG. Because GSA owns and leases over 354 million square feet in 9,600 buildings in more than 2,200 communities, new technologies can be tested in sufficient numbers and locations to predict their potential.
Building systems rather than tenant fit-out systems are the target. “We’re focused on the building systems that GSA, as a landlord and building owner, can control,” says Powell. Most evaluations take place in spaces that GSA leases to other agencies.
To select technology for evaluation, GPG looks for both innovation and deployment potential for its portfolio. Technology that would likely reach the market anyway is passed over. GPG also seeks a balance of risks, pursuing some high-risk, high-payoff products as well as more certain opportunities. GPG works with the National Renewable Energy Lab on screening and rating technologies for possible assessment.
When evaluating a product technology, GPG categorizes each in one of three phases:
- Translation – a product with very limited or no commercial installations
- Adoption – a product with an emerging market but a limited installation base and little objective information available about its performance
- Diffusion – a product with some market penetration, possibly even with multiple suppliers, but little information about performance and best practices.
GPG product evaluations specify whether a technology is suitable to replace equipment at end of life, retrofit for immediate benefits, or use in new construction. To date the program has published findings from completed assessments. Nine assessments that are underway will publish results in 2016. For more on all, visit www.gsa.gov.
GSAlink: Analytics for Peak Efficiency
Rapid detection and response to building faults are key to operating at peak efficiency. To continuously monitor its buildings, GSA is developing the GSAlink platform. The program’s architecture pulls data from individual buildings, stores it in a national database, runs it through a fault-detection diagnostics engine, and presents the data back to building operators so they can react to any problems.
GSAlink has been deployed in 81 GSA buildings. The software’s search for faults includes malfunctioning equipment, inconsistent application of processes and policies (e.g., weekend shutdowns), and equipment working at cross purposes (e.g., simultaneous heating and cooling). With continuous monitoring, operators can be alerted to problems promptly rather than waiting until the next cycle of preventive maintenance. For example, the system was able to detect a fault due to a bird stuck in a damper, a situation that not only was wasting energy but risking frozen equipment due to winter temperatures.
GSAlink currently has about 40 rules that are applied to the building data, according to Frank Santella, acting assistant commissioner, Facilities Management & Services Programs, GSA Public Buildings Service. For example, 7 data points are used to detect simultaneous heating and cooling. “I think as people get a better understanding of the tool, they will request rules for their specific building,” Santella says. Ultimately, GSA will make the platform available to other agencies.