Specification Overkill

March 11, 2002

Special Report: Turning Green Into Gold - Part 3

The design and engineering process must address a long list of criteria, including building codes, laws of physics, and rules of thumb that have developed over the years. However, criteria based on experience may no longer prove valid.

The proliferation of desktop computers, laser printers, and fax machines in the early 1980s overwhelmed the mechanical and electrical capacity of the typical office building. Building systems designed to accommodate an electric typewriter could not meet the stress created when desktop computers started appearing on every desk. Clearly, greater mechanical and electrical capacity would be needed to handle the increasing amount of technology finding its way into the office.

Today, a plug load capacity of four to six watts per square foot is a requirement for many tenants seeking space. A building with only three watts of plug load capacity may find itself excluded from consideration by the tenant. The irony is that it is difficult to exceed a plug load of 1.5 watts per square foot. The typical office building has a plug load of about 1.0 watts per square foot.

As developers, architects, and designers were busy increasing the mechanical and electrical capacity of office buildings to meet the increased technology, the high-tech industry was moving in the opposite direction: reducing power consumption levels. Early desktop computers consumed several hundred watts. By the early ’90s, power consumption for the typical computer fell to roughly 120 watts. Introduction of the U.S. EPA’s Energy Star® program in 1993 helped reduce power use further by encouraging the development of the “sleep mode.” This allowed a computer and monitor to consume a miserly 75 watts and 12 watts, respectively, when in the sleep mode. The savings potential is enormous, considering that the average desktop computer is on seven hours per day, but used for four hours, and 30 percent of computers are left on overnight and weekends. The City of San Francisco saves about $150,000 each year through a program of encouraging city employees to use the sleep feature and turn off equipment before leaving the office.

The trend of laptop computers replacing the traditional desktop also has a dramatic impact on power consumption and heat load. At 15 watts or less in power use, laptop computers offer a 90-percent reduction in power use without losing computing power and the added benefit of mobility. Continued improvement in efficiency and power management may reduce their power needs to less than five watts.

Power consumption for lighting also dropped during the last 20 years. Improvements in lighting technology suggest the trend will continue. For example, in 1980 the typical lighting load for office space was three watts per square foot. Ten years later, it dropped 50 percent to a peak use of 1.5 watts per square foot. By 2000, peak lighting load had dropped to 1.0 watt or less per square foot. As lighting controls become more common, further reductions in heat load for the mechanical system will be possible. As a result, many office buildings have oversized mechanical systems, creating a huge penalty in operating efficiency. Even buildings with systems correctly matched to peak load requirements will operate at partial load conditions over 90 percent of the time. A chiller with a design efficiency of 0.5 kW per ton can operate at 1.0 kW per ton or more during partial-load conditions. Alternatives – multiple smaller chillers for multi-staged operation, or a single chiller with a variable speed drive – are more efficient at partial-load conditions. Clearly, the potential for savings in both construction cost and operating costs are great.

Rather than use four to 10 watts per square foot for lighting and plug load levels, a more sensible standard would be 1.5 watts for plugs and 1.0 watts for lighting. While still conservative, it would allow the mechanical systems to run more efficiently and lead to reductions in first costs, operating costs, and pollution. A reduction in the mechanical system load of 2.5 tons or more of cooling per 1,000 square feet is possible. This translates into savings of $4 per square foot in construction costs and $0.50 per square foot in annual operating costs.

The financial impact of this on an investment-grade office building is dramatic. Office buildings are typically valued by the income capitalization method. Using this approach, the net operating income (income minus expenses, but not including debt service) is divided by a capitalization rate to establish a building’s value. A reduction in annual operating costs of $0.50 per square foot at 8.25-percent capitalization rates would increase a building’s value by $6.06 per square foot. In short, a developer could reduce construction costs $4 per square foot and increase building value by $6.06 a square foot.

Even more dramatic is the impact on a company that owns its facilities or leases them on a triple net basis. Assume the company has a price earnings ratio of 22 and owns a 350,000-square-foot headquarters. Saving $0.50 per square foot in operating costs is equal to adding $3.85 million to the company’s market value, with 20 million shares – that’s 19.25 cents per share.

No question: Sustainable products are important. Yet, equally important are the design, engineering, and operation of a building. Opportunities to protect natural resources, create a healthy productive workplace, and save money can appear in the most mundane places.

Continue Article >> Part 4 - Project Strategies to Keep More Green (as in Money)

Alan Whitson ([email protected]) is the seminar leader for Corporate Realty, Design & Management Institute, a national provider of educational seminars. This year’s seminar schedule, including “Breaking the Sustainable Design Barrier,” can be found at (www.squarefootage.net).

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