The following framework explains all the steps an organization needs to go through to achieve carbon neutrality. An ideal customer goes through these steps in order; however, most companies do these steps differently [the order is not important as far as the steps are done in a structured format].
Fig: Path to Carbon Neutrality Framework
1.0 DEFINE & ANALYZE
Identify the organization's sustainability/energy efficiency goals before defining the carbon reduction strategy.
1.1 BENCHMARK
Comparing building energy performance to similar buildings (cross-sectional benchmarking) or its historical performance (longitudinal benchmarking). Benchmarking can also be performed at the system or component level. One of the cross-sectional benchmarking key metrics is energy use intensity (EUI), which expresses total building energy use per square foot per year (kBtu/sf/yr).
1.2 AUDITS
Resource Conservation Measures
A project/technology/initiative implemented to reduce resource consumption (Electricity, Gas, Water, etc.) in a building or a facility. RCMs can be implemented individually or as a bigger energy savings project.
Fig 2: Type of Audits
2.0 RCM IMPLEMENTATION
The Implementation of identified Resource Conservation Measures can be done in several ways. No-cost/Low-Cost measures are usually digitization RCMs, and the rest are capital-intensive RCMs.
2.1 DIGITAL TRANSFORMATION:
Digitization in the building is a process that maintains and continuously improves building performance over time. Digitization focuses on monitoring and analyzing large amounts of data continuously. It is a systematic process of investigating, analyzing, and optimizing the performance of the building systems.
Typically, digital transformation can achieve 10-15% of energy savings with less than three years of payback.
[The Next Chapter is dedicated to Digital Transformation, so I am not going into detail here.]
2.2 CAPITAL INTENSIVE
Capital-intensive RCMs can be implemented in several ways, like Self-financing(CapEx), ESPC, EaaS, etc.
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Energy as a service (EaaS)is defined as a service provider offering customers access to energy and management services without any associated upfront costs through a contract with the organization. The customer pays only for ongoing services and avoids infrastructure and equipment charges, much like a software-as-a-service model. These services are specifically tailored to the customer’s goals, whether to reduce energy usage, be more sustainable or improve their bottom line.
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Energy Savings Performance Contracts [ESPC] an energy service company (ESCO) installs equipment following a pre-defined scope of work and typically guarantees that the project will achieve an agreed savings threshold, called a “Performance Guarantee.” The customer can pay upfront installation costs with cash or third-party financing. As such, the customer owns the equipment throughout the contract. If the measured savings of the equipment fall below the guaranteed threshold, the ESCO will pay the customer for the underperformance to satisfy their Performance Guarantee.
- CapEx- projects require significant capital investment and are typically budgeted a fiscal year in advance. The Owner does the financing of the project.
Figure 3: ESPC vs. EaaS
3.0 DECARBONIZE
Once we improve the energy efficiency of the building, the next step in decarbonization is Electrification, followed by the usage of renewable energy.
Figure 4 - Impact of Decarbonization
Even if we cut all of our carbon emissions to zero, many emissions from certain types of manufacturing (like steel), air travel, etc., cannot be eliminated. Therefore, Carbon Dioxide Removal(CDR) technologies will be vital along with the Electrification and usage of clean energy to achieve net zero.
3.1 ELECTRIFICATION
Replacing fossil-fueled assets with efficient electric assets powered by clean electricity (The key here is powered by clean electricity).
Strategy: Heatpumps/Heat recovery chillers/Electric Resistance for HW and heating, Battery storage for resiliency, Electric stove for cooking, etc. A 40% increase in heat pump sales is observed in Europe compared to 2021.
Disadvantages of Electrification
1Infrastructure upgrade: Adding new electrical assets like Electric boilers(replacing gas boilers) and EV chargers will add a significant
electrical load to the building.Suppose the infrastructure is designed with a limited capacity to accommodate this additional load; a significant electrical infrastructure upgrade will be required.
2Utility Load: this will increase the load on utility plants
3CapEx: replacing the existing Fossis fuel equipment with electrical assets will require a significant investment
4Utility Rate: Electricity costs are historically higher than natural gas on a per-unit energy basis. The utilities are also increasing shifting rate structures to penalize customer who has very low demand utilization factor [Average demand/Monthly maximum demand)
3.2 RENEWABLE ENERGY
Clean energy resources include solar, wind, water, geothermal, etc. Once all the gas equipment has been replaced and the building is all-electric, we can choose where the energy for our building comes from. A great example of this is the usage of geothermal Heat Pumps for heating and cooling in buildings.
Renewable energy can be generated on-site or off-site. The cost of renewable energy systems has gone down significantly in recent years, making renewable energy a more appealing option.
3.3 CARBON DIOXIDE REMOVAL[CDR]:
Different CDR strategies are in different stages of development.
Strategy: Afforestation/deforestation, Direct Air Capture, Carbon Mineralization, Bioenergy with carbon capture and storage (BECCS), etc.
4.0 MONITOR AND SUSTAIN
Continuous monitoring is the most crucial step to sustainable building performance. Therefore, defining, monitoring, and tracking KPIs is vital to
ensure the site performs as it should.
KPIS should be tracked at 3 levels:
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Level 1 - Site Level [ EUI, Daily Min/Max Demand, etc.
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Level 2 - Meter level: Schedule, Baseload, Energy profile(heatmap), Daily load profile, etc.
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Level 3 - System level: Occupant Comfort, System efficiency, etc.
Three Important Takeaways
1
The biggest mistake made during benchmarking is comparing non-normalized data. Most benchmark databases are national averages, and hence they might not be an accurate reflection of the performance of the building. For example, A similar manufacturing facility in Florida and Colorado with similar outputs will have significant variations in energy consumption due to the impact of weather. Unfortunately, very few databases show the benchmark data by weather regions and building type.
2
Geothermal Energy
Geothermal energy is heat within the earth. Geothermal energy can be used for heating and cooling(heat pumps) and electricity production(steam turbines).
In 2022, 17 billion kWh of energy was produced from geothermal power plants[0.4% of total U.S. utility-scale electricity generation.
Geothermal energy will be critical for decarbonization and will be widely used in the next decade.
3 Importance of Digitization
The importance of data to improve and sustain building performance is often overlooked. A few examples where data can play a big part are a) continuous monitoring for sustainable results. b) Doing Level 1 audits remotely using digital tools are the best way to identify the areas to improve without a significant investment. c) Tracking site, meter, and system level KPIs. And more.
A Scope 1, 2, and 3 are mutually exclusive for an organization - If the emissions are already accounted for in Scope 1 or 2 of an organization, they can't be accounted for in its Scope 3, to avoid double counting. For example, the indirect emissions from electricity consumption are categorized as and accounted for as the consumer's Scope 2 emissions. Therefore, they cannot be accounted as purchased products or services in its Scope 3 emissions.
B The same emissions can be double counted between organizations - The emissions of one organization can be allocated to another organization if they have related business activities. For example, a manufacturer's emissions from producing a product can be allocated to the customer who buys that product as upstream Scope 3 emissions.
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