ConstructionPro Week, Volume: Construction Advisor Today - Issue: 74 - 09/24/2010

Zero Net Energy Action Plan Launched in California

California's Public Utilities Commission (CPUC) and state business leaders have launched a 2010-2012 Zero Net Energy (ZNE) Action Plan for the state. The effort is designed to help commercial building owners in the state take advantage of the latest technologies and financial incentives to help reduce building energy use to "net-zero" through greater efficiency and on-site "clean energy" production.


ZNE buildings have a net energy consumption of zero over a typical year. On-site solar, wind, and other renewable energy resources generate the amount of energy used by the building. To date, California is estimated to have more ZNE buildings than any other state. Technologies needed to achieve ZNE, including high-performance lighting and distributed generation such as rooftop solar, are considered widely available and incentivized.


Buildings consume more electricity than any other sector in California. About five billion square feet of commercial building space accounts for 38 percent of the state's power use and more than 25 percent of the state's natural gas consumption.


The action plan consists of the following strategies for new construction and existing buildings:


New Construction
Strategy 1-1 - Establish a long-term, progressive path of higher minimum codes and standards for all new buildings by 2030.


Strategy 1-2 - Expand Titles 20 and 24 to address all significant energy end uses.


Strategy 1-3 - Establish a "Path to Zero" campaign to create demand for high-efficiency buildings.


Strategy 1-4 - Develop innovative financial tools for ZNE and ultra-low-energy new buildings.


Strategy 1-5 - Create additional investment incentives and leverage other funding.


Strategy 1-6 - Develop a multi-pronged approach to advance the practice of integrated design.


Existing Buildings
Strategy 2-1 - Lead by example by having state/local governments and "major" corporations commit to achieve energy-efficiency targets.


Strategy 2-2 - Lower the threshold for applying codes to existing buildings.


Strategy 2-3 - Ensure compliance with minimum Title 24 codes and standards for building renovations and expansion.


Strategy 2-4 - Establish mandatory energy and carbon labeling and benchmarks.


Strategy 2-5 - Develop tools and strategies to use information and behavioral strategies, commissioning, and training to reduce energy consumption in commercial buildings.


Strategy 2-6 - Develop effective financial tools for energy-efficient improvements to existing buildings.


Strategy 2-7 - Develop business models and supplier infrastructure to deliver integrated and comprehensive "one-stop" energy-management solutions.


Strategy 2-8 - Improve the use of plug-load technologies within the commercial sector.


The action plan was developed through a collaborative 11-month period and represents the work of more than 150 stakeholders in commercial building, architecture, finance, clean energy, technology, and various state agencies. The action plan lays out a path to implement California's Long-Term Energy Efficiency Strategic Plan for the commercial sector, published in 2008, which identified ZNE as one of the Big Bold Energy Efficiency Strategies.


The action plan can be accessed at the following website:


CPUC Commissioner Provides GBI Additional Details About the Plan
Dian Grueneich, CPUC commissioner and lead commissioner overseeing the agency's energy-efficiency programs, provided Green Building Insider the following additional details about the plan:


GBI: Does the plan need to be endorsed by the governor, the legislature, or another entity to take effect? What is the procedure for this plan to be reviewed, adopted, and enforced?


Grueneich: The plan stems from our Energy Efficiency Strategic Plan, which CPUC formally adopted in the fall of 2008. The sister energy agency in California, the California Energy Commission, sent a unanimous letter of support, and the governor and legislature have all endorsed it informally as well, so that set the stage for our goals on zero net energy. We're now doing a series of detailed action plans stemming from the strategic plan, so we do not have a plan for going to the legislature or formal adoption by our commission. So, the answer to the question is "No," not a formal endorsement, but we certainly have received great support for it.


GBI: So, anything you do under this ZNE Action Plan is approved by virtue of the fact that the larger Energy Efficiency Strategic Plan has been approved?


Grueneich: I wouldn't say anything we would do, but we're right now at a stage where we thought, as far as I can tell, [there is] a lot of support for our efforts. I can't predict 4-5 years into the future, but the general theme is the efforts that we're undertaking under the plan are carrying out the Strategic Plan. They're consistent with the utility funding that we approved last fall and the types of programs that we directed the utilities to be assisting in, so it's all part of the same activity.


GBI: Approximately how many ZNE buildings currently exist in California?


Grueneich: We don't yet have a good inventory of zero net energy buildings, and that's one of the things we want to do. We do know that there are at least a dozen commercial zero net energy buildings in the state and a number of residential ones as well.


GBI: You said you would like to do a formal count of how many ZNE buildings there are out there. When may that actually take place?


Grueneich: I don't know the details of it. I know that part of the action plan is to develop a comprehensive inventory, and I suspect that we're going to have to do a little more work to know how long it will take because there's not a law [requiring] people to report it. So, it's really part of our informal network we're developing where we can identify the buildings. Right now, we've got at least a dozen commercial [ZNE buildings], and my bet would be probably a comparable number on the residential side.


GBI: With the implementation of this plan, about how many additional buildings could become a zero net energy building and by when?


Grueneich: We don't have a definite answer or number here because a lot is going to depend upon the economy and the real-estate market. What we have is a specific goal for 100 percent of the new commercial construction [to be] zero net energy by 2030 and a goal of 50 percent of the existing buildings by 2030, but that's not a hard-and-fast requirement in law. As you can imagine that is, I believe, millions of buildings, certainly hundreds of thousands, and part of it is getting an understanding of, as we start to ramp up zero net energy buildings, how fast can we go, so we on purpose have not set specific short-term goals yet.


GBI: What would be the approximate cost of implementing the plan? How much of that cost would be shouldered by the government?


Grueneich: We have not developed a specific cost [estimate] in part because the final end point of, for example, on the new construction zero net energy, our hope is that that will actually be [required by] law in California. We are setting the stage to get to that end point of the law, where basically we want to get a lot more buildings built to understand the cost and how much savings we're getting. Until we get more factual information, we don't know the cost, what it would end up being, and the same thing with the cost shouldered by the government. We are really just launching this effort for the first time.


GBI: Who are the primary opponents of this plan, and what, if anything, could they do to thwart it? Litigation?


Grueneich: We actually do not have opponents to the plan. In fact, [there is] a lot of support for going in this direction. What I will say is I think we do need to be cautious that as we move more into implementing this through standards and mandatory requirements that we demonstrate that the technologies are feasible [and] that they really do save energy, but typically, that's the stage at which you would start to see opponents, when it becomes mandatory requirements.  At this initial stage, it's really a voluntary effort, where, as I said, we're getting lots of interesting support.


GBI: Other comments?


Grueneich: I guess the one comment I would say is that our overall approach is to try to engage leaders -- we're calling them 'champions' -- in not just the government sector and not just the utilities but very much in the private sector because that's what's going to make this a reality.


GBI: As you move through this plan and start to implement it, what will you be doing to alert the public about what will be happening?


Grueneich: We are in the process of setting up a brand new web portal for energy efficiency in California. It's called 'Engage 360,' and that's going to be the place where we are going to have a page or hub for the zero net energy effort. We will be sending out press releases and announcements, but we're also going to try to have a central place where there's an exchange of information where we're keeping everybody who's interested in this up to speed on what's going on.


GBI: When will that be launched?


Grueneich: It's supposed to be launched in the next month. You can actually go to, and you can sign up now because they're literally in beta-testing. It should be going live in the next month.


Experts Submit Op/Ed About California's Plan to GBI
Allen Matkins attorney Bryan Jackson and GeoSource Foundation Chairman Parke Blair have submitted to GBI the following opinion/editorial article about California's Zero Net Energy Action Plan:


For energy efficiency to be adopted wholesale in California and across the country, it must make economic sense. Plans to increase energy savings must make economic sense after taking all of the following factors into consideration:  purchase and installation costs; maintenance costs; replacement costs; and positive cash flow that allows pay-back periods to occur well before  replacement cycles. The Zero Net Energy (ZNE) Action Plan for 2010-2012 as proposed by the California Public Utilities Commission (CPUC) and business leaders does not appear to make economic sense. Similar to President Obama's Executive Order 13154, which phases in ZNE federal buildings over time and makes ZNE buildings mandatory for new federal projects after 2030, California's ZNE plan should be modified to make it more economically viable.    


Many see the biggest energy issue for California and the nation in 2010-2012 and beyond is energy pricing volatility for end users. Implementing the "Smart Grid" allow monitoring, pricing and billing practices that are transferring energy pricing volatility from utilities to end users.  Also, peak pricing and variable demand charges at all levels add to volatility in energy pricing.  This energy pricing volatility will become the number-one economic motivator for energy efficiency in the built environment.


The ZNE plan does not completely solve energy pricing volatility. A ZNE building may put energy onto the grid and take energy off of the grid for a net zero use of energy, but if the costs of taking power off of the grid does not match the price paid to put power onto the gird, then the net zero building is still a loser in economic terms. Add energy pricing volatility, and the potential losses could be substantial. Perhaps even more important economically is the choice of the technology used to reduce energy consumption and put energy back onto the grid. If the technology is expensive to buy and install, requires costly maintenance, is inefficient, and provides a payback period that comes close to its replacement cycle, then the technology is economically flawed even if it fits within a ZNE plan. 


 We believe efficient geothermal ground source heat pumps (GSHPs) remain the best economical technology available today to protect end users against volatile energy pricing, high maintenance costs and life-cycle replacement costs that approach payback periods.  The ZNE plan does not mention GSHP. When compared to current HVAC technologies, GSHPs help end users avoid two or three life-cycle replacement costs, require little maintenance, have near-zero lifetime degradation, and are 400-500 percent efficient.  HVAC systems, which are the heart of the ZNE plan, approximate 85 percent efficiency, loses 3-5 percent efficiency every year after installation, and have payback periods that approximate the lifecycle replacement cycles. While the HVAC industry will continue to benefit from selling replacement equipment and ongoing maintenance contracts, the economics of ZNE buildings will ultimately fail economically. 


To make more expensive technologies work, economic incentives need to be provided. Unfunded programs without economic incentives will not work. After 20 years of regulation without useful or usable inventories, tallies, or standard formats for energy savings, another round of the prescriptive regulations and programs in tough economic times will accomplish little. This is particularly true in absence of capital funding by public entities. 


Title 24 compliance in California already increases construction cost substantially with little evidence of energy savings or evidence of energy savings that make economic sense. CPUC should explore commercial and residential block load rates that actively rewarded energy savings and provide further economic incentive for energy savings.


Bottom line: if it makes economic sense, energy savings will occur on a wide-scale basis across the country.


Steve Rizer, Editor
Green Building Insider 



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