Will New York City’s largest buildings meet emissions reduction limits by 2024?

Contributed by Saverio Grosso, Edison Energy

New York City’s Climate Mobilization Act has been lauded as one of the most ambitious and innovative legislative initiatives by a major city to combat climate change. 

Under the Act, passed in 2019, most buildings over 25,000 square feet—roughly 50,000 residential and commercial properties across the city—must meet new energy efficiency and greenhouse gas emissions (GHG) reductions by 2024, and stricter limits in 2030.

Courtesy: Luke Stackpoole/Unsplash

Currently, about 70 percent of New York City’s carbon footprint comes from large commercial and multi-family buildings. The goal: Reduce their emissions 40 percent by 2030, and 80 percent by 2050.

The rest of the country is starting to follow suit. Last month, the U.S. Department of Energy determined that the updated 2021 International Energy Conservation Code (IECC) would improve energy efficiency in buildings subject to the code. 

States and cities that adopt the IECC will effectively require new buildings to cut energy use an average of more than 10 percent compared to the previous code, and by more than a third compared to the 2009 version, according to the American Council for an Energy Efficient Economy.

There’s been a tremendous uptick in energy optimization and efficiency projects. What we typically saw 15 years ago was just performance evaluation. Now we’re looking at almost full building optimization—everything from start to finish—and planning for the future.

Three New York measures have really impacted energy efficiency: Local Laws 84, 87, and 97. They’re part of New York City’s Greener, Greater Buildings Plan, a comprehensive set of energy efficiency laws targeting the largest existing buildings. These constitute half of the City’s built square footage and 45 percent of citywide energy use. By 2030, the Plan is expected to reduce citywide GHG emissions at least 5.3 percent from the 2009 baseline of 50.8 million metric tons. 

Such buildings must disclose their energy and water use each year; conduct an audit and retro-commissioning every 10 years; and make lighting upgrades.

LL 84, also known as the Benchmarking Law, directs all buildings over 25,000 square feet to submit annual data on energy usage by May 1 of each year for the previous year. This was the first foray for many building owners to understand how much energy they use.

LL 87 mandates that buildings over 50,000 square feet undergo periodic energy audits and retro-commissioning measures. It looks at big-ticket items that will need to be repaired or replaced and could reduce energy usage, as well as at quick, immediate fixes of issues that hinder performance.

It may create headaches for some because action costs money, but the intent of 87 was always, “What can I fix now to capture savings, and what should I be doing within the next five to 10 years to improve it?”

Sadly, a majority of buildings went through the LL 87 process and haven’t yet taken advantage of the knowledge they paid for. Anytime legislation is passed, there are those who follow the intent of the law and identify ways of actually saving energy; and then there are the bad actors who claim, “I met the legislation,” and that’s it.

LL 97 is considered the most ambitious building emissions legislation enacted by any city in the world. It Incorporates a green power purchase option and a provision for carbon trading between buildings.

LL 97 is forcing the hand of those who just saw LL 87 from a compliance aspect. It’s prompting them to go back and say, “We have some great ideas here. Let’s take this report off the shelf and make it actionable.”

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Breaking down barriers

New York City’s package of policies is likely to transform the way the real estate and financial industries value energy efficiency in buildings, with major financial and environmental benefits. 

Along with significant job creation from energy audits, retro-commissioning, lighting upgrades, and equipment maintenance, the policies will also suppress demand for electricity, over time making the city’s electrical grid more reliable and resilient.

But getting property owners to implement energy optimization and efficiency projects can be an uphill battle because it goes against the status quo. Managers may think, “If the phone doesn’t ring and I don’t get any complaints, why change it?”

At times you’re convincing people to make efficiency improvements they don’t think are necessary. Or perhaps you’re dealing with someone within the organization who doesn’t see the bills, so they don’t see the value of saving energy.

One strategy to convince them is to show how improvements would enhance their day-to-day operations and actually solve problems they might not be aware of.

Either way, building owners will soon have to get on board or be forced to grapple with financial penalties for non-compliance, potentially facing multimillion-dollar annual fines beginning in 2024.

What property owners want

Building owners are increasingly investing in system controls to improve efficiency and cut costs. They’re also curtailing the use of fossil fuels to reduce emissions. Throughout, baseline temperature, humidity, and pressurization must be maintained. 

The challenge is to structure energy programs that can be implemented in existing buildings that operate 24 hours a day, and to develop phases for larger improvements. In a hospital, for instance, you just can’t shut down a floor and renovate; the plans need to take into account the day-to-day needs of the patients and staff with the building’s mission in mind. It’s an investment of time and effort, and there’s a cost to that.

Every building presents new challenges ranging from equipment use and age, to keeping its clients satisfied, to operations and maintenance, budgets, and the building’s future. The complexity of systems and, frankly, the people in the spaces and running them, make each a unique scenario that services need to be tailored around.

My favorite projects involve working with building operators and managers who have insights into their property’s systems, are willing to invest in energy optimization, and achieve measurable improvements from those investments.

At the project’s end, the building operations staff appreciates that we helped ease some of the burden on their O&M personnel and improved reliability. The property manager is thrilled that we captured savings and reduced risk. And the owner is happy that we put them on a path so that they don’t have to pay any fines as the legislation comes down in 2024 or 2030.

As the battle against climate change ramps up, and as American cities continue to enact emissions reduction mandates, Edison’s energy optimization and efficiency offerings will continue to evolve and expand. But our mission and vision will remain firm: always to improve the buildings that we work in, so they can provide a better value to their clients.

About the author:

Saverio Grosso is Managing Director of Energy Optimization for Edison Energy, which empowers organizations to conquer the biggest challenges in energy today: cost, carbon, and complex choices.