Making Net-Zero Energy Affordable

Kelly Vaughn explains how exterior sun shades adjust the sunlight and energy admitted into the Rocky Mountain Institute headquarters building.

Kelly Vaughn explains how exterior sun shades adjust the sunlight and energy admitted into the Rocky Mountain Institute headquarters building.

The new Rocky Mountain Institute headquarters building in Basalt, Colo., demonstrates how to drive net energy consumption down to zero at a cost that offers a four-year payback.

by James A. Bacon

When the Rocky Mountain Institute (RMI) decided to build a new headquarters building in Basalt, Colo., it had its own high standards to uphold. The free-market, environmental think tank had set a goal of transforming four billion square feet of building space into smart, energy-efficient structures, enough to reduce energy consumption over five years by 398 trillion BTUs and prevent emissions of 50 million metric tons of CO2 — the equivalent of decommissioning 17 coal-fired power plants.

Doubling as a meeting center where legendary co-founder Amory Lovins could convene with Fortune 500 executives visiting nearby Aspen, the new facility had to push the envelope for passive, integrative design. But it also had to show that investing in energy efficiency made economic sense. There wasn’t much point in demonstrating cutting-edge approaches that were too expensive to replicate.

When the 15,610-square-foot Innovation Center opened in December 2015, it was one of only 200 buildings constructed to net-zero energy standards, meaning that it produced more energy than it consumed on an annual basis. But it was more than an ideological fashion statement. Although achieving net-zero and a design life of more than 100 years added an incremental cost of 10.8%, RMI will recoup that sum, primarily through energy savings, in just under four years.

I gained an interest in energy-efficient buildings when my wife worked at Richmond-based Tridium, developer of a software platform for smart buildings. Buildings account for about 60% of the electricity generated around the world, and energy constitutes a major expense of property ownership. A whole industry has grown up around using technology to wring electricity savings from HVAC and lighting. But the RMI Innovation Center went beyond tweaking its HVAC system — it dispensed with it altogether. Instead of paying for heaters, coolers and ducts, RMI invested in solar energy, sensors, insulation and passive design.

Exterior shot of the Innovation Center. Photo credit: Rocky Mountain Institute

Exterior shot of the Innovation Center. Photo credit: Rocky Mountain Institute

During my visit to Aspen earlier this month, I took a side trip to Basalt a few miles away to check out RMI’s Innovation Center myself. I wanted to see what state-of-the-art energy efficiency looked like and gauge what potential might exist for cutting electricity consumption and CO2 emissions by redesigning the built community. RMI was kind enough to assign Kelly Vaughn, a marketing manager with RMI’s communications team, to give my friend and me a tour.

The building sports many of the features one might expect from an energy efficient building — big windows with a southern exposure to the sun, shades to control sunlight entering the building, and solar panels to generate electricity on-site. Less visibly, the building is so tightly insulated that the Passive House Institute declared it to be one of the most air-tight buildings it ever measured. Heat is stored in concrete floor slabs and other thermal masses such as walls.

Also invisible, more than 120 submeters track temperature, humidity, CO2, lighting and other critical variables that feed into the building’s brain. “The building is so smart,” says Vaughn, “that it saves us from making stupid decisions. You don’t just walk up to the thermostat. The building makes critical decisions based on outdoor temperatures projected out to the next day.”

Most office lighting comes from outside, although RMI does use LED lights as backup.

Most office lighting comes from outside, although RMI does use LED lights as backup.

The building generates solar electricity, some of which it stores in a 30 kW lithium ion battery system. The batteries provide a buffer for periods of peak demand, such as the coldest hours of the coldest days of the year. The storage allows the building to keep peak demand under 50kW, which places it in a lower commercial rate class with its local electric co-op.

Perhaps RMI’s greatest innovation is to re-think the 68º-to-72º temperature zone maintained in most office buildings by taking an innovative approach to delivering thermal comfort. “We’ve thought beyond what temperatures we need to maintain in a building and expanded our ideas about how to deliver comfort on an individual level, allowing us to expand our temperature bandwidth from 67º to 82º,” says Vaughn. 

Studies have shown that six factors, not just temperature, affect a person’s comfort in an office building. These include humidity, air movement, metabolic levels and clothing. RMI has designed the office to give people more control over their micro-environments — overhead fans, and even chairs with built-in seat heaters, like those found in automobiles, and fans that blow air on the back. An office-hoteling arrangement also allows employees to switch to work stations in warmer or cooler parts of the building. Says Vaughn: “This is something a lot of green buildings ignore.” (For details on how RMI re-defines thermal comfort, click here.)

Perhaps the most remarkable thing about the Innovation Center is how unremarkable the technology is. Most of it is off-the-shelf.  The key to making the building energy efficient, says Vaughn, was adopting the right project management strategy. RMI brought together architects, engineers, contractors subcontractors and other stakeholders early in the process to get their interests aligned. The Integrated Project Delivery approach gave everyone a stake in the outcome. (RMI shares its contract, as seen here.)

Bacon’s bottom line: RMI has demonstrated that it’s possible to design a net-zero energy building at a reasonable price — there is no need to pay a big premium to be green.

I don’t see the Basalt design translating directly to Virginia, though. The Old Dominion is more humid than Colorado, and Virginians would be loath to give up their trees, which would interfere with RMI’s approach to passive solar heating. Design features would have to be adjusted accordingly.

A bigger problem is that it may be difficult to retrofit existing building stock with heated floors, large, southern-facing windows and other design features incorporated into RMI’s from-the-ground-up construction. HVAC systems will be with us for decades, if not centuries, in existing buildings.

But no one said it would be easy changing the world. If nothing else, RMI has shown what is possible.

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16 responses to “Making Net-Zero Energy Affordable

  1. As an aside, the Chesapeake Bay Foundation’s Brock Environmental Center is a net-positive building. According to Virginia Business, “the 10,500-square-foot center has produced 83 percent more power than it has consumed, qualifying it as a net-positive building. Its 168-rooftop solar panels generate about 60 percent of the building’s energy needs, with two 10-kilowatt wind turbines producing the remaining 40 percent.”

    No mention in the article of the payback. The Brock Environmental Center is an environmental showcase, to be sure. But is it economically replicable? I’d like to know. I’ll check it out if I get a chance.

  2. I’d be curious to know how the free-market RMI feels about global warming …

    • RMI has been on a carbon reduction path for decades, including a cooperative arrangement for research with a group called the Carbon War Room. That said, they believe that carbon and other environmental issues can be best assisted by reducing the amount of energy we use while getting the same or a better result. Lower costs, fewer impacts, yet greater comfort and productivity. Sounds like a good plan.

  3. Excellent post Jim. Thank you.

    One note however, the Colorado design might not be suitable for Virginia, but it wasn’t intended to be a cookie cutter recipe. One of the primary assumptions about energy efficient design is that the building should be designed for its site. For decades Americans have been taking their favorite building designs and carting them throughout the nation requiring extra heating and air-conditioning to make up for the building’s poor fit with its environs.

    One of the things that makes older architecture so appealing is that it suits the conditions. What is beautiful and suitable in Virginia or South Carolina is not a good fit in New England or the Rocky Mountains.

    One of the things that Rocky Mountain Institute is trying to do is to design a building appropriately from the very beginning rather than add on a lot of expensive and wasteful HVAC, pumps and pipes that have been added because of poor design decisions.

    It is easier and cheaper to do this with new construction but they have also helped others retrofit many existing buildings with a great result.

    You note that most of this technology already exists, although new innovative devices are making it even cheaper and easier to save energy. Massachusetts is asking their utilities to invest $2.2 billion to save the ratepayers $6 billion. Investments of this sort create many more jobs and reduce rates compared to investing an equivalent amount in new power plants.

    Now all we need is an updated regulatory system that allows utilities to support that alternative.

  4. One other thing. In nearly every discussion about energy efficiency everyone talks about “payback”. In this case, the extra 10% in capital costs is repaid within 4 years and after that it provides a savings – how magnificent!

    But we never ask about “payback” when we build a new power plant. All that does is increase our cost. The same usage today costs much more than it did 10 years ago. And that doesn’t include all of the other external costs of power production: pollution, health effects, damage to land for transmission lines, pipelines, etc. Why is that? Why does one way of producing power get a free pass while its alternative, energy efficiency, has to pay its capital cost back within a few years to even be considered? Power plants don’t pay their costs back. The ratepayers pay the power companies. If the cost was the same, energy efficiency would still be superior because of all of the avoided impacts. But it is far cheaper and still we ignore its value. How can we change that?

    We have to make it so the utilities don’t suffer by its use.

    • I emphasize payback because if we want the private sector to design and build buildings differently, property owners need to get a return on their investment. If they see that they can generate an additional 20% return on the added incremental cost of going net-zero, they will do it on their own. No need for prodding. Net-zero design will become the new normal.

    • I just installed some new LED bulbs yesterday. Now that the price on them is down I’ll switch out some more. I get that energy efficiency pays. But I am not going to pay the utility for electricity which I do not buy, which is where I suspect you are going, Tom H. That is certainly where some utilities want to go, earning a profit on power they do not sell the way farmers get paid for crops they do not grow.

      • No, I am not suggesting a subsidy to utilities to make up for energy saved. I agree with Jim, energy efficiency makes so much sense from a return on investment point of view that it should become our normal design decision in new buildings and existing ones wherever it makes sense.

        I am suggesting a recasting of the role of utilities. They should be responsible for providing the platform (a modernized grid) and a transactional space where they and third-parties can provide demand response, and energy efficiency solutions, grid services, distributed renewable generation, energy storage, and the host of other services that will make up our modern energy future. Utilities will be paid for the value they provide. This will ensure their economic health without requiring them to propose and build unnecessary energy infrastructure (power plants, pipelines, transmission lines, etc.) just to receive a source of adequate revenues. This will keep rates low, reduce the amount of energy used, while keeping utilities financially healthy by doing only what has value to the customers.

        The interests of customers and utility shareholders can be aligned once again. Today the utilities are choosing the interests of the shareholders over the interests of the ratepayers, by building unnecessary projects that increase the cost to ratepayers.

        The environment benefits significantly too. But not as a result of an additional expense. Just as a consequence of using less energy, more wisely.

  5. re: ” If they see that they can generate an additional 20% return on the added incremental cost of going net-zero, they will do it on their own. No need for prodding. Net-zero design will become the new normal.”

    How does that sentiment mesh with Dominion Virginia Power current attitude towards cutting electricity use and incorporating renewables.

    DVP seems to be in denial that net zero is a real concept that could change the way utilities operate.

    However, call me a “skeptic” – a true “skeptic” not a “denier” when it comes to net zero for residential subdivisions which are geometrically arranged for maximum return on development potential without regard to orientation for energy conservation.

    It does sound like RMI does believe in Global Warming – and that’s at least some of the motivation behind their net-zero mindset.

    Too bad other “free-market’ organizations are not on that track – at all.

    • I’m not sure Dominion is in denial of the potential of energy efficiency. They have many intelligent people on staff. I think they see it clearly as a significant threat to their current business model. That is why they are dead last of the 30 largest U.S. utilities in two categories related to energy efficiency. Anything that could reduce their stream of revenues is seen as a threat. This is evidenced by their opposition to third-party distributed solar and their plan to have Virginia’s solar be all utility owned, central-station solar plants.

      It is also evidenced by their rush to build as many new power plants, transmission lines and pipelines that they can get approved under the cover of the CPP to create a long-term stream of revenues. From the old utility world-view, it is the best way to create a high return for shareholders. Unfortunately, it will be achieved at great cost to ratepayers, the environment, and Virginia’s long-term economic prospects.

  6. Thanks for the post and for going to see the really good work RMI has been up to for years! You mention old buildings. You might want to run down the mountain to Grand Junction to see the historic Court House retrofitted to net-zero by the GSA.

    A few places have info for creating building efficiency … VA actually has 6 buildings in this database.

    And RMI talks about the difficulty of getting taken seriously and the road blocks …

    “The U.S. commercial buildings sector is incredibly diverse in building types and uses—from luxury hotels to office buildings to distribution centers. But commercial buildings do in fact have one thing in common: They consume an enormous amount of energy, cumulatively accounting for more than 20 percent of total energy by end use, and more than 35 percent of the generated electricity in the U.S.”

    “Deep energy retrofits are proven to have as much as 50 percent energy savings (as shown by the Empire State Building – info at RMI) To do so, the market requires a new approach to retrofits that moves from individual building custom solutions (which can be time intensive and difficult to scale) to a new platform that can provide immediate, low-cost, and rapidly scalable energy savings.”

    So here is what RMI is doing …

    “The City of Chicago will serve as one of a number of testing and proving grounds for RMI’s ambitious new approach. Chicago was selected due to the city’s large commercial buildings portfolio, utility support, and strong partnerships with local government and several local and national non-profits. ”

    “By 2016, 50 of Chicago’s commercial buildings will be selected as pilots to demonstrate the first proof of concept, with an eye toward expanding to two large commercial building portfolios. When successfully demonstrated, the Commercial Energy+ Initiative will be further scaled in Chicago with a planned deployment in three additional cities within the next three years.”

    Finally, as someone who has been in the marketplace … approaching the money question is key. ‘Cash flow positive’ includes ‘costs avoided’, or the annual savings in the operating budget measured against the cost of funds to do the project. Saved operating monies go straight to the positive side of the ledger, but that works best in places like Texas and CT where commercial PACE loans are readily available through a private bank consortium funded Green Bank.

    Tom H is right … change the rate structure first so the drop in demand works for the utility.

  7. We need to have an energy rating for buildings similar to what we have for appliances. Today, the incentives are for builders, developers, and architects to reduce the upfront costs of buildings so that they are cheaper – making them easier to sell or rent. The higher life-cycle occupancy costs are left to the occupants to deal with. This creates an outcome that is well below optimum for society. We are forced to create extra energy at higher cost with greater pollution and other environmental effects than would be if the price signals were in harmony.

    Our economic dogma says that the price reflects all of the pertinent information. That is certainly not true in this example. Buyers and renters are not fully aware that the cheaper rent or purchase price will cost them much more in the long run through higher energy costs.

    This is something that can be remedied. We just need to see the benefits of doing it and remove the reasons for utilities to oppose it.

  8. Life cycle costs … including the electric utility costs of owning a home … was the beauty of Energy Efficient Mortgages. A reduced bill meant more available to pay for the loan. They did not catch on although I do understand that Fanny has come up with a new energy mortgage.
    When the energy upgrades are included in some so called ‘energy mortgages’ they simply require the upgrades to be included in the equity calculation, not something that always works because much of the cost is basically a prepaid electric bill.
    Two other alternatives … PACE loans that are tied to the tax register and if the home is sold the remaining loan amount moves to the new owner, and On-bill financing that is tied to the meter and is monies loaned from the utility company.
    The real problem in VA is how to get our utility to find value in declining grid demand. Other states are dealing with this inevitability.

  9. re: ” But I am not going to pay the utility for electricity which I do not buy”

    re: ” I’m not sure Dominion is in denial of the potential of energy efficiency. They have many intelligent people on staff. I think they see it clearly as a significant threat to their current business model. ”

    somewhere there is an issue with these contradictions but I’m not smart enough to be able to articulate it this morning.

    Perhaps someone with more brainpower can address it.

    • Steve Haner was concerned that if customers saved energy it would not necessarily lower their utility bills because the utility would want a subsidy to make up for their loss in revenues (as some have proposed).

      My comment spoke to the fact that Dominion is probably very aware of the damaging effect that widespread energy efficiency measures would have on their revenues, which is why they oppose various activities (energy efficiency and third-party solar, etc.) that would reduce their revenues.

      These are not contradictory – they speak to the same issue. How can we use less energy in ways that give us as much or more comfort, without harming the financial health of our utilities? The current regulatory system does not allow both of these things to happen effectively right now.

      We must make changes in the role of our utilities and how they are paid. This will keep utilities financially healthy. We need them to build and maintain a modern grid . And it will allow a thriving marketplace of utilities and others who will provide us with a wide variety of choices for meeting our need for comfort in a cleaner and lower cost fashion.

  10. well you’d think DVP itself would be trying to move in that direction also.

    It’s not like they can’t see how things are headed also but they’ve positioned themselves as an adversary to such changes… It’s like Kodak seeking to have laws passed against digital photography! 😉

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