Professional Documents
Culture Documents
Summary Report
A complex sector 10
Changing behavior 28
1
For the EEB project, the building industry covers all
buildings and all those involved in the value chain from
architects and property developers to occupiers.
2
Quotes are from the EEB project perception research unless
otherwise stated.
3
A cost curve for greenhouse gas reduction, McKinsey
Quarterly 2007 Number 1.
Market risks
The timing and pace of rising demand for energy
efficiency is uncertain and poses the most significant
risk for market entrants. Demand is expected to grow
as people become more aware of the importance of
energy use in buildings. The value proposition will
continue to develop, given the right market
structures and instruments. The key question is how
fast these changes will occur.
Operational risks
Businesses need the skills to devise attractive, energy
efficient propositions at appropriate cost levels. The
projects perception research found that there is a
widespread lack of personal and corporate know-
how in the market and a general reluctance to
innovate (see page 12).
Strategic assessment4
There are potential first-mover advantages for
companies entering the energy efficiency market.
Subsequent competitors will face barriers to entry in
the form of specialist know-how, which should result
in a lower level of competition than in the
mainstream market. This in turn will tilt the balance
of power in favor of suppliers rather than buyers, due
to the relatively low number of suppliers with the
necessary expertise. Energy efficient property could
lose value if demand for office and retail sites falls
because of a rise in working at home and on-line
shopping.
4
The factors in this assessment are based on Michael Porters Five
Forces see http://www.quickmba.com/strategy/porter.shtml.
Swedens Bo01 housing estate (the first stage of the Western Harbor redevelopment) was
completed in 2001. It was designed as a sustainable urban environment, including 100%
renewable energy supply, increased biodiversity and a waste management system designed to use
waste and sewage as an energy source.
The houses are built to minimize heat and electricity consumption. Well-insulated buildings with
low-energy windows decrease heating needs, and the installed electrical equipment is highly
energy efficient. Each unit is designed to use no more than 105 kWh/m2/year, including household
electricity.
Buildings and construction are one of the sectors Figure 1: Be st and wor st ca se pr ojecti on s of site
causing emissions that are really a problem for energ y de mand 7
climate change.
Journalist, International 35000
2003 level
Thousands of TWh
demands in China move toward those in 4
1
0
2003
2003
2003
2030
2030
2030
2003
2003
2030
2030
2003
2030
China* India* Brazil US Europe (OECD) Japan
* Energy use from marketed sources
China will more than double during this period. 20% coal
11
International Energy Outlook 2006, US Department of Energy.
12
Annual Energy Outlook (2006). US Energy Information Administration; IEA Lights Labours Lost Policies for Energy efficient
Lighting (2006); Price et al. "Sectoral Trends in Global Energy Use and Greenhouse Gas Emissions", Lawrence Berkeley National
Laboratory (2006); Yamashita, "Residential Statistics in Japan", Institute of Energy Economics Japan, (2001), US Census (2006).
13
IEA Energy Statistics and Energy Balances". (2003); IEA Energy Technology Perspectives 2006: Scenarios and Strategies to
2050.
Commercial
12000 Residential
10000
Primary AEC (TWh)
8000
6000
4000
2000
0
Brazil China India EU-15 Japan US
Manufacturing, transport
and construction, 12%
Use, 84% (heating, ventilation,
hot water & electricity)
Maintenance and renovation, 4%
14
IEA "Energy Statistics and Energy Balances". (2003); TIAX
analysis based on IEA Energy Technology Perspectives
2006: Scenarios and Strategies to 2050.
15
Building & Environment, Vol. 32, No. 4, pp. 321329.
(1997).
The EEB Project is developing a database of Energy efficiency factors in buildings vary
information on the nature of each sub-sector according to geography, climate, building type
and its energy-use characteristics that will be and location. The distinction between
used in the next phase of the project to build developed and developing countries is
scenarios. The major division by property type is important, as is the contrast between retrofitting
between commercial and residential. But there existing buildings and new construction. In all
are significant differences between commercial cases there are different standards of building
sub-sectors (such as offices, retail, banking and quality. It is vital that energy efficiency
hotels). These other attributes are also permeates all levels and is not restricted to high-
important: end properties.
Demographics
Economic development
Lifestyle changes
Technology and the spread of new
equipment
Local authorities
Loc al aut horiti es influence the value chain Develop ers are the primary actors in
through enacting building policies for their commercial construction and are frequently
areas. These rules are often a compromise speculative, which inevitably results in a short-
between high levels of energy performance and term focus on buildings financial value.
cost considerations.16 Speculative developers will only be interested in
energy efficiency if it is a significant factor in the
Ca pital prov id ers, such as lenders or buying decision. On the other hand, developers
investors, are overwhelmingly concerned with who hold property to receive income from
the risk and return equation. They often tenants have a longer term view, which may
consider only a short time period, which can make energy-saving investments attractive. But
reduce energy use to a relatively minor factor in developers may not be able to reap the benefits
decision-making. of such investments, as energy cost saving goes
to the occupier even though the developer
incurs the investment cost. This weakens the
16
Who Plays and Who Decides, Innovologie LLC, US DOE, incentive for energy efficiency investments.
page xiii.
The role of a g e nt s can be important. They Figure 9 illustrates the decision-making islands
often stand between developers and tenants that are typical in commercial developments.
and between owners and occupiers. Typically, The first pyramid describes the various technical
their financial interests are short-term. disciplines involved in the building sector. The
second pyramid describes the building delivery
O w ner s may rent their buildings, making their process. Combined, the third pyramid highlights
interests different from those of end users. the ineffective coordination that exists because
Some owners buy to sell (and make a capital of the functional gaps and management
return); others buy to lease (as an investment) discontinuities. There are often lengthy delays
or occupy. The last group is most likely to between the design stages, due to problems
consider investments that may have paybacks with planning permission, project financing or
over several years. signing up of anchor tenants for commercial
property.
More vertical integration in the supply chain The isolated roles and ineffective coordination
can improve energy efficiency in buildings. But between participants have two important
fully integrated design/build projects are consequences:
perceived to be more costly to implement.18
Many property developers believe competition Incentives to reduce energy use are
rather than cooperation results in lower bids in usually split between different players and
a tendering process. not matched to those who can invest in
and benefit from energy-saving measures.
There is normally very little opportunity for
users to provide feedback through the
market to developers or designers.
17
Seminar proceedings Aus-PeBBu Industry seminar, presenter Lee Siew Eang, Melbourne, 24 June, 2004 .
18
Who Plays and Who Decides, Innovologie LLC, US DOE.
Progress on energy efficiency depends on Qualitat ive resea rc h was conducted with
people in the building industry being aware of three groups:
the importance of the issue, and then being able
and willing to act on it. Awareness is high in Opinion leaders architects, journalists,
most countries covered by this project, but there NGOs, academics
are significant barriers preventing widespread Regulators policy-makers, politicians,
involvement. regulators
The finance community analysts,
The EEB project commissioned research that financiers, property investment companies.
identified serious gaps in knowledge about
energy efficiency among building professionals, Researchers carried out in-depth interviews with
as well as a lack of leadership throughout the 45 people between October 2006 and January
industry. 2007. The interviews covered attitudes toward
sustainable buildings, barriers and the role of the
The research investigated perceptions of EEB project in driving change.
sustainability in relation to buildings, including
the use of the terms green and sustainable. Qua ntitat i ve res earch questioned three
The word sustainable tends to be more broad sub-groups of building professionals:
prominent in Europe, while green is more suited
to Asia, especially Japan. Regardless of the term Specifiers and developers including
used, energy costs and energy use were the architects, engineers, builders and
highest priorities for building professionals. Their contractors
other prominent objectives were occupant well- Agents and professional landlords
being and productivity, conservation of water, including corporate building owners
and reducing the risks from rising energy costs. Corporate tenants.
Potential future resale value and reputational
benefits for companies were ranked lowest of Researchers interviewed 1,423 people between
the main factors. November 2006 and February 2007, using a
telephone questionnaire.
An unengaged respondent:
S k e p t ic a l p a rt ic ip a n t L e a de r
High
C om pany is highly motivated by C SR ... W illing to drive/ lead adoption
but individual is not c onvinced Believes in the econom ics, the clim ate
N eeds clear argument for w h y im pact and the regulatory incentives
Convince
why M ore specifiers / developers
A w a re C o n s id e r e d In v o lv e d A w a re C o n s id e r e d In v o lv e d
81 % 3 4% 1 6% 87% 46% 22 %
U ne n ga ged U n in f o rm e d e n t h u s ia s t
Very low k nowledge lev els and Pessimistic about the econom ics, the
pessim istic about do-ability climate impact and the incentives
U nengaged on environm ental issues D oesnt know how to get involved
Convince
Low M ore corporate tenants why Passionate about the environm ent
A w a re C o n s id e r e d In v o lv e d A w a re C o n s id e r e d In v o lv e d
45 % 1 3% 5% 72% 21% 5%
19
Source of figures 1015: Lippincott research.
Overall 19%
Overall 17%
France 22%
France 12%
Germany 23%
Germany 17%
Spain 30%
Spain 19%
US 12% 16%
US
0% 5% 10% 15% 20% 25% 30% 35% 40% 0% 5% 10% 15% 20% 25% 30%
(Que stion: What per centage of CO 2 (Que stion: H ow mu ch m ore d o you thi nk
emissi on s do you think b uildi ng s giv e a certified su stainable buil ding w oul d cost
rise t o directl y and indi rectl y?) to bui ld relati ve to a normal b uildi ng? )
Spain 87% 9%
28%
US 83% 16%
43%
Brazil 82% 9%
27%
Japan 13% 5% 3%
20
The results in Japan are particularly interesting 13% awareness of green/sustainable buildings compared to an average for
other regions of 84%. This is odd given that its building energy use is the lowest of the developed countries.
Leadership
Figu re 15: Lack of leadership
E ff e ctiv e ne s s f or
C o st
e mi s si o n
e ff e ctiv e ne s s
red u cti o n s
Control and regulatory instruments
Appliance standards High High
Mandatory labeling & certification programs High High
Energy efficiency obligations & quotas High High
Utility demand-side management programs High High
Economic and market-based instruments
Energy performance contracting High Medium-high
Fiscal instruments and incentives
Tax exemptions and reductions High High
Support, information and voluntary action
Voluntary certification and labeling Medium-high High
Public leadership programs Medium-high High
21
UNEP SBCI, Quoted at the Brussels Forum.
Holistic approach
Policy and
regulation
Finance Behavior
The RETREAT is a part of TERIs Gual Pahari campus, about 30 km south of Delhi. It
demonstrates efficient use of natural resources, clean and renewable energy technologies and
efficient waste management. The 3,000 m training center is independent of the citys electricity
grid system. The peak electricity load is only 96 kW, compared to a conventional 280 kW peak.
There are three important aspects of the design:
Various passive design concepts have resulted in the reduction of space conditioning loads by
1015%:
The building is oriented along the eastwest axis to have maximum exposure along north
and south.
Roof insulation uses vermiculite concrete and China mosaic white finish.
Wall insulation uses expanded polystyrene.
Part of the building is sunk into the ground to stabilize internal temperature.
Shading devices and windows have been designed to cut out summer sun and to let in
winter sun.
Glare-free daylight has been provided, using specially designed skylights.
Landscaping affects wind directions.
Deciduous trees are used in the southern side of the building to shade it during summer
but let in the winter sun.
22
The envelope is the structure that encloses the internal
space and separates it from the exterior.
TIME
Source: Solidar, Berlin Germany
Others &
adjustments 21%
1. Design
Water heating 10% 2. Building envelope
3. Equipment
1+2+3+4 - Lighting
IT & ofce
equipment 14%
3+4 - Heating & cooling
- Appliances & ofce equipment
- Building automation
Lighting 18%
3 4. Infrastructure
1+2+3
HVAC 37%
PassivHaus
PassivHaus, which began in Germany in 1991, has developed an approach that can reduce the energy
demands of a building to one-twentieth of the norm but still provide comfortable conditions. There are
more than 6,000 buildings that meet the PassivHaus standard offices as well as apartments and houses,
as well as new and renovated buildings.
23
2004 DOE Buildings Energy Databook.
Council House 2 (CH2) is a 10-story office building for City of Melbourne staff. It has ground-floor
retail spaces and underground parking and was officially opened in August 2006.
CH2 was designed to copy the planets ecology, using the natural 24-hour cycle of solar energy,
natural light, air and rainwater to power, heat, cool and supply water to the building.
The north faade has 10 dark-colored air ducts that absorb heat from the sun. The hot air rises,
taking the stale air up and out of the building. The south faade has light-colored ducts that draw in
fresh air from the roof and distribute it down through the building. The west faade has louvers
made from recycled timber that move according to the position of the sun and are powered by
photovoltaic roof panels.
Financial savings of US$ 1.196 million annually, including US$ 272.366 in electricity, gas and
water.
CH2 will pay for its sustainability features, worth US$ 9.330 million, in a decade.
15
This applies both to owners specifying a new
building that they will occupy as well as to
10
existing owner-occupiers considering retrofitting.
On the other hand, investors time horizons are 5
likely to be shorter. This increases the
importance for their investment calculations of 0
Low Medium High
the propertys residual value when they sell
Quality
compared with operational returns during their
ownership. In any case, energy costs are often
hidden in operational costs and not considered
by most investors.
24
McGraw-Hill Construction: Green Building SmartMarket
Report 2006.
25
Jones LaSalle GmbH, CREIS.
12%
Platinum
Cost premium by location & LEED level
10%
Gold
8%
Silver
6%
4%
2%
0%
UCSB, CA San Francisco, CA Merced, CA Denver, CO Boston, MA Houston, TX
26
Herkel and others, Energy efficient office buildings Results and Experiences from a Research and Demonstration Program in
Germany, Building Performance Congress 2006; see www.enbau-monitor.de.
27
Greg Katz, CapitalE, Economic Costs and Benefits of Green Buildings.
28
IEA Information Paper, High-rise refurbishment: The energy efficient upgrade of multi-storey residences in the European Union.
29
CoreNet Global 2007.
30
See Energy Policy 34 (2006) 188199. From volatility to
value: analysing and managing financial and performance
risk in energy savings projects, by Evan Millsa, Steve
Kromerb, Gary Weissc and Paul A. Mathew.
These barriers to energy efficient behavior are linked The challenge is to affect behavior
to three issues: permanently. Information and education
Lac k of a war eness a nd inform atio n on are key elements to change knowledge into
energy consumption and cost people are often action. This includes advertising campaigns
not aware that they are wasting energy which on energy efficiency, energy labeling of
prevents them from behaving efficiently. appliances, advice on energy efficient
Hab it people are in the habit of leaving lights equipment or behavior, education at school
on, not adjusting heating and using ovens even and the use of information technologies
though they consume more energy than such as consumption meters. Expert advice,
microwaves do. through audits, may be necessary to help
The r eb ou nd effect the reduction of energy people become aware of possible energy
savings because the saving leads to additional savings and measure the impact of their
activity through either greater use of the same behavior.
product or for another energy-using action, such
as driving a more efficient car further, or leaving Technical devices to measure energy
lights on because they are energy-saving bulbs consumption and provide immediate
is widely recognized but its magnitude varies, for feedback help households to cut energy
example:35
36 consumption by as much as 20%. 37 Direct
and immediate feedback reveals the link
o Space heating: 10- 30% between actions and their impacts. Well-
o Space cooling: 0-50% informed consumers choose actions to save
o Lighting: 5-20% energy with minimal impact on their
o Water heating: 10-40% comfort. Perceptions of comfort are
o Automobile: 10-30%. important; there must be a balance
between energy-saving value and any
perceived loss of comfort. 38
Table 2: Reason s for n ot havin g d one the ut m ost t o make energ y sa ving s
(Bel giu m, 1 00 0 ho u seho ld s)
Neither
Rather Rather Not at
Completely yes nor Total
yes no
no all
Doesn't want to lose comfort 3.5% 32.2% 5.2% 29.8% 29.3% 100.0%
Would be a drop in the sea 2.4% 23.1% 3.7% 26.4% 44.5% 100.0%
Doesn't have financial means 1.7% 23.3% 5.2% 30.4% 39.4% 100.0%
Requires too many efforts 1.9% 19.4% 4.8% 30.8% 43.1% 100.0%
Doesn't know what is necessary 3.3% 15.7% 4.7% 33.4% 42.9% 100.0%
Doesn't see the utility 0.5% 3.5% 0.4% 23.5% 72.1% 100.0%
35
UKERC, IEA, International Resource Group.
36
Anna-Lisa Linden et al. (2006) "Efficient and inefficient aspects of residential energy behaviour: What are the policy instruments
for change?
37
EPRI, 2005, In-Home Display Units, Tools for Conservation and Demand Response.
38
ACEEE Summer Session Proceedings, 2006, Effectiveness of Displaying Energy Consumption Data in Residential Buildings: To
Know Is to Change by Tsuyoshi Ueno, Central Research Institute of Electric Power Industry; Kiichiro Tsuji, Osaka University; and
Yukio Nakano, Central Research Institute of Electric Power Industry.
ArcelorMittal, ITT and Rio Tinto also contributed financially to the EEB project.
Outreach to stakeholders in the building industry such as business leaders, government officials and non-
governmental organizations is an important feature of this project. The first major event took place in
Beijing in March 2007. The China Forum was organized jointly with the International Energy Agency.
More than 150 people took part over two days of workshops and plenary sessions, helping us to
understand building energy efficiency issues specific to China. A second Forum took place in Brussels in
July 2007, concentrating on how to drive investments in energy efficiency in existing buildings.
CEMEX works together with its customers and communities to provide integral
sustainable building solutions which contribute to lower the overall Greenhouse gas
(GHG) emissions, these solutions consists of: financing, design, planning support, as
well as our products. Offering our customers practical and readily applicable products,
that are: economically feasible, can be used in a mass scale, are durable, have better
insulation properties, and additionally provides comfort and reduces energy
consumption for heating and cooling.
CEMEX also contributes to reduce the GHG emissions in our cement production
facilities; from 1990 to 2006 we have achieved an 11% reduction in our CO2
emissions. Our target is to reduce them up to 25% by 2015.