The state of Alaska has a relatively new law that requires a quarter of public buildings be 15 percent more efficient by 2020.
“Ten to 20 percent is the low hanging fruit,” Jonathan Westeinde, founder of Windmill Development Group Ltd. said. “We should look at 40 to 50 percent improvements.”
Westeinde said the state’s energy goals are a great step forward, but that larger goals could be met easily, he said. “Could we be doing more? Are we missing the opportunity to make more money?” Westeinde said.
The House Energy Committee invited Westeinde to present his “Making the Business Case for Energy Efficiency” talk at a lunch-time learning session, March 27.
Westeinde’s said his goal was to start up the greenest new development firm in Canada.
A current project of Westeinde’s is the highest LEED rated building in the world, he said. “And we’ve been about to do this while still making the same amount of money as anybody else. If anything we can make more money, if done properly.”Retrofitting old buildings is another large market, Westeinde said.
A successful project often requires creative financing, Westeinde said. It’s not just the design know-how and the engineering know-how, he said, successful building projects also consider financing structures and marketing elements.
“Only about 5 percent of buildings adopt LEED standards. Cradle to cradle, by 2050 we’re going to see things like that happen,” Westeinde said.
Big tech players and venture capitalists are turning to energy efficiency for investment. “There’s a lot of money to be made here,” Westeinde said. “But we’re still not seeing it move very fast.”
“Lets look at is this building operating in the way it was originally designed is there ways that we can enhance the performance of buildings compared to how it is currently operating,” Westeinde said.
The 120 million buildings in the U.S. consume 72 percent of all electricity and 42 percent of all primary energy the national uses. New buildings make up on about 1 percent of the built environment. Existing structures are a gold mine, Westeinde said. The U.S. must look not just at incremental, 10 to 20 percent, improvements but “prove and justify that we can go 40 or 50 percent and we can make money doing it,” Westeinde said.
The American Institute of Architects made a challenge to the industry that all U.S. buildings be carbon neutral by 2030. By applying current best practices to the nation’s current building population, the U.S. could have carbon neutral buildings by before 2020.
The U.S. could lose competitiveness if it continues to maintain an energy hungry infrastructure, Westeinde said. Developing countries with growing populations, like Mexico, are showing more activity in green building work due to greater challenges in bringing energy use down, Westeinde said.
“If we are seeing our developing counterparts leapfrog us due to necessity,” Westeinde said, “then we are going to fall behind. “Developing nations could instead offer opportunity to U.S. firms for “knowledge export” of information gained during a U.S. building retrofit, Westeinde said.
“There’s a big bucket of money to be made there,” Westeinde said.
So why isn’t the industry taking off? Energy efficient retrofits or new builds bump up against several barriers, Westeinde said.
One barrier arrives when different entities pay for the capital and operating budgets of a building separately, as in multi-tenanted buildings where upgrades would be paid for by the landlord, while energy saving is enjoyed by the tenants. “He has no incentive to optimize the building because the tenant benefits, not the landlord,” Westeinde said.
“It is a riskier business,” Westeinde said. “The tried and true is the safest thing to do.”
Adopting energy efficient infrastructure means whoever is in charge of that project, “they have spend a little more time, do their homework,” Westeinde said.
Many project managers don’t want to have to change gears, he said. “And inherently you have to.”
Workforce development has also been lacking, Westeinde said. The construction industry has traditionally offered blue collar manufacturing and construction jobs, Westeinde said.
"It really is evolving into more and more of a knowledge industry," Westeinde said, due to the sophistication of the tools and products coming into the market place.
Advancements in energy efficiency technologies are stymied by a relative lack of dedicated research and development (R&D) resources, Westeinde said. One of the biggest things, Westeinde said, lowest R&D investment of any major industry in America and the lowest R&D investment of any of our counterparts in the western world. They spend far more money on research and development in the construction development sector.
"That becomes and key hurdle when dealing with risk and uncertainty" to move projects forward, Westeinde said.
Energy efficiency upgrades are a long-term investments, Westeinde said. “We need to look at structures that offer a 10-year payback.”
Businesses like Siemens and Westeinde’s Windmill Development Group Ltd. work with building owners to create retrofit plans and in some way guarantee the costs and payback of the upgrades. Westeinde recommends investing more in energy efficiency and less on “the shiny and new" renewable energy systems.
He suggests starting with passive systems, like new windows. “Better windows may allow for a smaller HVAC system,” Westeinde said.
Often, higher upfront costs deliver greater long-term payback. When planning energy efficiency retrofits “you can’t set a limit,” Westeinde said. Decisions should be “more based on ‘what is my best return?’”
• Contact reporter Russell Stigall at 523-2276 or at firstname.lastname@example.org.