Opportunities & New Frontiers in Building Energy Efficiency (bee.stanford.edu)

Opportunities & New Frontiers in Building Energy Efficiency (bee.stanford.edu)


Now, I would like to welcome our presenters. To start, we have Professor Will Chueh. He is an associate professor in the Department of Material Science and Engineering, a senior fellow of the Precourt Institute for Energy here at Stanford University, and the co-director of the StorageX Initiative at Stanford University. He’s also a faculty scientist at United States Department of Energy, SLAC, National Accelerator Lab, he leads a research group of more than 40 tackling the challenge of decarbonization on using various energy transformation pathways. Will is an expert on the science and engineering of batteries, fuel cells, and related electro-chemical technologies. Also with us today is Dian Grueneich. She is Precourt Energy Scholar at the Precourt Institute of Energy at Stanford University, and a commissioner emeritus of the California Public Utilities Commission. Dian is an internationally recognized energy expert, has worked on energy policy for over four decades, and has received numerous awards for her work on energy efficiency including, the 30th anniversary Award of the American Council for an energy efficient economy for outstanding contributions and its national champion of Energy Efficiency award. She’s also received the National Association of Regulatory Utility Commissioners Clean Energy award, and the EE Global Forum’s first Visionary Award for leadership and developing the California long-term energy efficient strategic plans. She has also served on external advisory committees to the US Department of Energy and the National Renewable Energy Lab, and is a senior fellow with the New Buildings Institute. Our third presenter today, Steve Comello, is the Lead for the Energy Business Innovation focus area at the Stanford Graduate School of Business. Steve leads the Energy Business focus area and is a senior research fellow at the Steyer-Taylor Center for Energy Policy and Finance. He is also a techno-economic and policy lead for the Stanford University’s Precourt Institute for Energy Bits and Watts initiative and StorageX initiative. His work examines how technology, policy, and organizations co-evolve to influence the business models and economic attractiveness of Advanced Energy Solutions. He advises academic, industry, government, and non-governmental organizations on strategies for clean technology deployment. Within his current portfolio, he explores policy and business model innovation within the electricity sector with one set of projects focusing on how digital platform technology diffuses, intersects with structural changes in the industry. To start today, Will will talk about the energy industry and its transformation as well as the energy courses we have offered here at Stanford University for online education. Anita, thank you very much for the introduction, and hello everyone and welcome. So as Anita mentioned, we’re here to talk about energy innovations, and I’m the Academic Director of the EIET, the Energy Innovation and Emerging Technologies program. So I thought I might begin with just highlighting a few important trends happening in energy, and then try to tell you a little bit more about how everyone could be contributing towards solutions for these pressing problems. So in the past decade, we have seen some tremendous opportunities and trends in energy. For example, we are seeing the emergence of low cost natural gas through shale, we have witnessed the explosion of electric vehicles thanks to the decreasing in the cost of battery technologies, the market for lithium ion batteries will increase from 50 billion dollars it is today to over a trillion dollars in the next 10-15 years. We have also seen in the past decade the tremendous decrease in the cost of wind and solar renewable electricity now becoming competitive, if not more than competitive in certain market areas with conventional fossil based electricity. And we’re also seeing tremendous opportunities for energy innovations in developing countries such as India and in China. And for today’s presentation, we’ll be learning about building energy efficiency, and there, there are also some extremely exciting trends. For example, in 2017, the building energy efficiency area added more new jobs than any other industry in the US energy sector. In 2018, more than $400 billion were spent in building energy inefficiency alone. So these are some of the exciting opportunities that Dian and Steve will discuss today. The purpose of our online education program at EIET is to empower those of you who want to learn more about how you can contribute. I often like to say that it would be wonderful if all of us can work our sleeves and contribute something toward the solution. You might be an engineer or a scientist looking into clean tech and thinking about how to develop technologies necessary for the transition, you may be working in the policy area thinking about how to implement and incentivize some of these transformation that is needed, you could be an entrepreneur looking at new business opportunities and commercializing new areas of business opportunity and technology. So no matter what you’re interested in, I think you’ll find something interesting in our collection of courses which you can see on the slide now. The course really covers many aspects of energy, technology, and innovation whether it’s the technology, the policy, the finance aspect, which Dian and Steve will also talk about today, in the context of building energy and efficiency. We discuss topics such as solar, fossil especially in terms of natural gas, the electricity grid, energy storage, wind, water, economics, behavior, building efficiency of course, and then we have new courses coming online on electric vehicles as well. I think you will find many of this course will get into not only the deep aspects of the problem involved but it will also give you the bird’s eye side view of what can be done for all of us to contribute. Let me end on the note by saying that a huge amount of work is being done to help us get to the aggressive energy efficiency and admission goals that we have set forth, but we’re very far from reaching it and I think all of us can do something to contribute. And I’m extremely delighted to welcome Dian and Steve to talk about one important aspect of energy innovation in terms of building energy efficiency. So Dian and Steve. Thank you. Yeah. Thank you. This is Dian. I’ll get started, and if you are able to stay till the end of today’s webinar, we’re going to give you a brief overview of the different modules in the online course that we’ve developed here at Stanford. But for today, we decided to just pick out a couple areas that we do touch upon in more depth, and that’s new frontiers and opportunities because for those of you who may have heard of energy efficiency or building energy efficiency, you may not be aware of just how quickly this whole area is involving, not just in terms of technology but the policy and finance. So we’re very excited today to be presenting this particular information that we go into more detail in the course. So this webinar will give you a high-level overview of emerging opportunities in building energy efficiency. We’re going to start off with covering motivations for pursuing building energy efficiency, and then we’re going to briefly describe our approach in this area, four key elements and three dimensions, and why this approach is unique and necessary for unlocking the great potential of building energy efficiency. And then we’ll take a look at two of the major building energy efficiency areas that are rapidly emerging, and now, how everyone can seize opportunities in those areas. And finally, we’ll finish with some question and answer. So let’s begin with motivations for focusing on building energy efficiency and why it’s an area of significant growth and we’ll be even more so in the coming years. As Will mentioned at the outset, building energy efficiency is a massive industry globally, with over 425 billion in 2018 spending according to the International Energy Agency. This spending includes deployment of solutions across a wide variety of components and systems, such as building envelop, lighting, plug loads, H-back, controls, building management systems, and very advanced intelligent efficiency as well. Now second, and looking at the United States specifically again, as Will mentioned, in 2017, energy efficiency added more new jobs than any other industry in the entire US energy sector. In 2018, building energy efficiency employed over 2.3 million people in the United States. And in 2019, this number was projected to grow by almost eight percent, making building energy efficiency one of the fastest growing areas in energy. So let’s take a look in another way. In keeping with US for a moment longer, energy efficiency has had an impressive impact on reducing the consumption of energy and saving money. This graph shows that in 2014, energy efficiency intervention saved 58 quadrillion BTUs of energy, taking 1980 as a baseline. Put another way, the US consume 37 percent less energy in 2014 than it would have absent energy efficiency, using 1980 as a baseline. In terms of economic savings, on average, every person in the United States in 2014 alone saved almost $2,500 in avoided energy costs. And bi-partisan legislation now before the US Congress that would boost energy efficiency in homes and other buildings could save an additional $51 billion on US energy bills through 2050. Now fourth and finally, let’s look at the role of energy efficiency in dealing with climate change. Looking at the scenario of annual global emissions created by the International Energy Agency, energy efficiency will be needed to contribute 44 percent of the reduction in CO2 emissions, about the same as all renewables and carbon capture technologies combined. This role is needed both to reduce and avoid emissions, but also to avoid having to make investments in more costly supply side options. So while energy efficiency has had a great history of accomplishment, the climate crisis necessitates multiple step changes in development, deployment, and market transformation. And this is the tremendous opportunity for energy efficiency and building energy efficiency in particular that has us truly excited and we hope you will be as well. [NOISE] Steve. Thanks Dian. So for building energy efficiency interventions to be effective, we teach that there are four key elements that must be understood in isolation and in combination in order to design and implement solutions that need cost, emissions and other, kinds of, targets, both initially and persistently. The first key element is the buildings. Now this is where the sites for any building energy efficiency intervention occurs. We distinguish across four kinds of buildings, residential, commercial, industrial, and civic or special. Now central questions about buildings that require clarity include, what are their purposes? How are they currently used? And how will they be programmed in the future? Connected to buildings is the next key element, which is the stakeholders. These are all the actors who have direct and indirect influence on the building energy efficiency intervention. From conceptualization to design, from sales and implementation, to post implementation and ongoing operation, validation, and assessment. Now central questions concerning stakeholders include, how do stakeholders relate to each other? What authorities and powers do they have? And how do you accommodate preferences and requirements? The answers to these questions need to be considered throughout the entire life cycle of the project. Third, is the motivations of the key decision-makers, groups or entities which are often not the eventual occupants of the building. Are costs and energy savings the only criteria? What about non-energy benefits such as health and productivity, energy security, economic and social development? How are these motivations articulated and understood? And in what ways do these bias or constrain building energy efficiency solutions? Finally, the fourth element is the barriers. Building energy efficiency is rife with market, structural, institutional, and behavioral barriers that shape the, kinds of, solutions available. The difficulty of implementation, and the ultimate- ultimate success, both in the short and long-term. Together, these four elements form the basis for understanding building energy efficiency as a concept. Absent understanding and addressing each of these elements, projects will likely not succeed. So given the complexity of the building energy efficiency space, we introduce and teach an integrated approach that incorporates three leavers, technology, policy, and finance. These are the key dimensions that must be appreciated to successfully design, develop, and deploy building energy efficiency intervention. Now specifically, these are the lenses through which to view the four elements we just spoke about. Again, building, stakeholders, motivations, and barriers. To understand or select the appropriate mechanisms and tools, to create solutions that meaningfully and persistently address energy costs, climate, and other dimensions. And moreover, this integrated approach emphasizes the interactions across these three dimensions to provide a holistic view of building energy efficiency, and thereby increasing the effectiveness and probability of success of the project. So looking at the cross influences of technology and policy, policy provides the incentives, penalties, and information that shapes the, kinds of, technological solutions that can be developed. While technology provides policymakers and regulators, the knowledge about how stringent to set policy, policy goals and what, kinds of, solutions might be used to achieve such goals. Looking at the cross influence of technology in finance, all things being equal, advances in technology increased the probability that savings will occur from more efficient components and systems, particularly when there is widespread adoption and market experience. This is what we mean by being bankable, that a finance year would have high confidence in the performance of the technology and meeting energy efficiency goals, and this will lower the financing costs of the energy-efficiency intervention. At the same time, financing is able to match the stream of benefits of energy efficiency technologies with the cost of acquiring and operating them. This is crucial in getting new technologies to market and to help them gain traction. Now, however, the benefits to new energy-efficiency technologies and interventions are not only saved energy and lower energy bill costs. There are the non-energy benefits, such as comfort and lower O&M costs that are often critical to customers and end users, and understanding these areas are key for focusing development on technology. Finally, the third intersection is that between policy and finance. Just as they do for technology, policy tools are combination of incentives, penalties, and information support and enable building energy efficiency, financing mechanisms, and market investment. In turn, financing provides funding to implement policies and incentives to align behaviors and transform markets. Dian. Thanks. We know we’ve covered a lot in just the last several slides in minutes, but we wanted to set the stage to give you a sense of in the online course, how we approach it, and especially the fact that we’re trying to look at this area of building energy efficiency in a multi-dimensional approach, because that is what both historically has made it successful. But looking forward in the ways we’re going to talk about today with the new frontiers, it’s really bringing together these four different dimensions as well as the three actual tools that we use. So I’m going to, before we get into our very exciting new frontier, spend just a moment on talking about an example that has been very successful historically that brings these understandings together. And this is about refrigerators. It’s one of my favorite stories because it shows through California’s groundbreaking efforts in energy efficiency, how technology and policy combined have led to lower costs, and how better products for consumers in the environment have also emerged. So let’s start with the energy use of refrigerators increased steadily in the United States from the 1940’s up until 1975. In 1975, a state agency here in California, the California Energy Commission, developed what has now become globally a key building energy efficiency policy tool, introducing the first appliance standards ever, and did so for refrigerators. So let’s see what happened with that policy tool. Since 1975, California and the federal government have tightened refrigerator standards on a regular basis due to better technology coming into the market, but that’s not the only story. The average refrigerator cost, as shown in this slide on green, has fallen dramatically in a 45-year since the standards were first set. So that now, consumers pay much less for efficient refrigerators than they did for inefficient ones. The final part of the story is that the size of the refrigerators has increased steadily. It has leveled off only due to the size of doors, preventing bigger refrigerators from getting into kitchens and though not shown on this chart, the trend has continued. By 2013, the electricity use for the average new refrigerator in the United States had decreased to about three quarters of its 1973 level. Even though refrigerators had increased in average size and decreased in inflation adjusted price, costs falling to about 10 percent of what they were six years earlier. So this example demonstrates how building energy efficiency must involve an understanding and strategies integrated across technology, policy, and economics. And while we don’t have time to go into it today, the success story of refrigerators is also due to the focus on the five key elements in building energy efficiency that Steve’s mentioned. Buildings themselves, stakeholders, motivations, and barriers. Steve, back to you. Thanks Dian. So we’ve discussed the motivations for focusing on building energy efficiency, the four key elements of every project, the integrative approach we teach to enable successful solutions, and an example of how the elements and tools of technology, policy, and finance have worked together in the context of refrigerators. Now, we turn to the very exciting future; new frontiers and opportunities for building energy efficiency. Our course teaches three areas that are rapidly emerging as significant opportunities for building energy efficiency in the coming decade. They are intelligent efficiency, building decarbonization, and energy efficiency as a climate mitigation strategy. In this webinar, we will very briefly touch upon two of them, intelligent efficiency and building decarbonization. So let’s spend a couple of minutes first on intelligent efficiency. So we borrow the definition of intelligent efficiency from the leading energy-efficiency research organization in the US, the American Council for for an Energy-Efficient Economy, ACEEE. As an aside, the first module in our course includes an interview with ACEEE’s executive director Steven Nadel, as well as with Stanford professor, Nobel Prize winner and former US Secretary of Energy, Steve Chu. ACEEE defines intelligent efficiency as the additional energy efficiency that is possible with information and communications technologies, also known as ICT, such as sensors, connected devices, networks, and data analytics. Intelligent efficiency is a systems-based, holistic approach to energy savings enabled by ICT and user access to real-time or near real-time information. Intelligent efficiency or IE, is a tremendous growth area in building energy efficiency, a consequence of the digital transformation that is sweeping across all sectors within energy and beyond with the simultaneous advancement and access to data, algorithms, networks, the Cloud, and specialized cost-effective hardware. So let’s quickly walk through how all of these intelligent efficiency components can come together for building energy efficiency. [BACKGROUND] First, we have data produced by the devices and streams indicated here in red. These include solar panels, smart thermostats, plug load controls, and other data feeds. A key data stream is that of utility data, which is enabled by smart meters, which not only record energy consumption at a high frequency, but also allow for two-way communication of set data. A key question is, who controls the data and how? This is related to two of the elements that were key in building energy efficiency, stakeholders, and barriers, and should be viewed through the lenses of both technology and policy. Now these data are shared via network shown here in the black arrows using both wired and wireless communication technologies, perhaps from data feeds from services outside of the building like weather data. Analytics is performed using algorithms within system shown here in the purple circles, with examples including: energy information systems, energy management information systems, and building automation systems. This is where input data is analyzed and displayed in networked and proprietary clouds to enable a corrective response if needed. These analytics can ingest and process literally millions of data points depending on the complexity of the system. And they provide a real-time or near real-time situational awareness of the building, all the way down to the individual component or device level. Now such analytics could also forecast how a building is likely to behave based on historical patterns, and may allow for more flexible load that could benefit the grid as a whole. And it’s imperative to consider the building type, stakeholders, and barriers that may influence the kinds of analytics perform and interpreted, and how decisions to act upon recommendations will emerge. Finally, we have the physical devices. They can either be sensors creating the data about the building of the first place or actuators, which make changes automatically or otherwise in response to signals sent from the information systems. Now what I’ve just sketched for you is the outline of a smart building, a system that provides useful feedback about the operation of a building, coupled with the ability to make fine tuned adjustments to optimize the comfort, cost, convenience, and energy use. As you can well imagine, an integrated approach that makes explicit the four elements we outlined earlier and considers their implications through an integrated approach is crucial to develop and implement solutions that are meaningful, measurable, and persistent. Now back to Dian. Thank you. I wanna just spend a minute, um, Steve, what you were talking about health for our audience, just to understand why we’ve put such emphasize on the dimensions like, what are the different types of buildings? Who are the stakeholders involved? If you’ve looked at what Steve has shown us today, just think of how many different technical areas there are in the buildings that you need to understand, and the different stakeholders in job classifications of people involved? And then think also about how policies have to start to change to be dynamic enough that they can take advantage of the new technology coming in? That the type of policies that we’ve had in the past, say for a light bulb to incent the production of LEDs is vastly different from the type of policies to get this type of technology installed, and then an area specialty for Steve in particular finance, is how are you going to bring together this new technology in having finance friendly policies? And that’s again, part of why we wanted to select this particular example in intelligent efficiency to show what a rapidly changing area this is, and the new opportunities that you can think are developing across whole range of occupations. So now I’ll turn to for just a minute, our next area that we picked out both for the course and for talking about today, which is very new, building decarbonization. So I’m gonna take a moment just to explain what it is, because even though I’ve been involved in this area for over 40 years, it’s really something that’s just emerged in the last three or four years in terms of really a focus. Buildings account for almost 40 percent of global carbon dioxide emissions. As something to really keep in mind, but that there are two sources of greenhouse gas emissions associated with buildings. The first are direct building emission sources like: gas furnaces, gas water heaters, and gas stoves, all of which produce emissions within buildings. But then there is a second, the indirect emissions produced by the production and transport of electricity and natural gas to our buildings. For the natural gas system, methane leakage is a major source of emissions, and on the electric system, is generally power plant emissions. So building decarbonization means decreasing the greenhouse gas emissions associated with buildings by three steps. The first is deep building energy efficiency. For example, a building that uses less electricity because it has efficient lighting, and deep building energy efficiency decreases both direct and indirect building emissions. Now the second is decarbonizing our grid, thereby decreasing indirect emissions. But the third is strategic electrification within the building or changing fuel types for the building and uses, which focuses on the fuel used within the building and avoiding or eliminating their emissions. So now let me take a minute to talk about why building decarbonization is so important. This slide comes from the California Energy Commission. It models a two story house in Sacramento using the highly efficient California 2020 titled 24 building standards. The slide- the chart on the left models are very efficient home. But it is a dual fuel home using both electricity and natural gas for water and space heating. The chart shows the monthly and annual emissions from the house. On the right side, the same sized house and location is modeled, but for and all electric house. In other words, instead of a gas fired water heater or furnace, electric heat pumps are modeled as well as induction cooking in lieu of a gas fired stove. The results are dramatic. The all electric home has a 60 percent reduction in water heating emissions, and 70 percent reduction in space heating emissions. And that in a nutshell, is why building decarbonization has so much focus and attention right now when we are dealing with our global climate crisis. Further, building decarbonization is an excellent example for understanding building energy efficiency through the lens of the three dimensions that we teach in our course, and provides very exciting opportunities for each of the three areas. Let me take you through them very, very briefly. Technology is critical, especially smart electric heat pumps, where the technology exists but improvements through solid performance tests, lowered costs, and grid integration capabilities are needed. Improvements are also needed to reduce hydrofluorocarbon, HFC emissions, enlarge cooling systems and in heat pumps. So that’s technology, we could give many more examples but that’s really what we have time for today. Let’s turn to policy, our second dimension. That’s where it is very critical because building decarbonization will not happen without critical policy changes. Examples include, setting targets and developing roadmaps. But also key changes in great design, and something that does not make greater use of electrical devices in our buildings cost prohibitive. And what we’re seeing increasingly is that many local governments are reviewing building codes to require or encourage all new electric buildings with a lot of differentiation and how they’re approaching it. But again, looking at the policy tool of building codes and thinking about how that can be used to integrate with the new technologies coming into this space, as well as the existing technology that we have. And then finally, finance will have a major role including: carbon price signals, wholesale market incentive for grid level load management services, and methodologies that value non-energy benefits associated with building decarbonization, and aspect of finance that Steve briefly mentioned, but we really try to go into detail more in this course. So in short, there is much work to be done to create rapid building decarbonization market transformation. So for those of you with us today who are interested in building energy efficiency, we hope you’re excited about the tremendous opportunities in just these two areas and new frontiers that we’ve talked about. If you are interested in learning more about intelligent efficiency and building decarbonization and a whole host of other topics related to building energy efficiency then we invite you to take our course. Here’s an overview of the course content. There are seven substantive modules plus one wrap-up that teach material covering basic concepts, in depth review, including many case studies of the dimensions of technology, policy, and finance, and the advanced topics we touched upon here as well as specific on the role of energy efficiency in global climate change efforts, all in about six and a half hours of lecture time. Steve. So one last element that we want to emphasize before we open up the Q&A is the numerous international industry experts from academia, policy, business and advocacy that we interview in the course. Hearing from them provides unique insights into this often complex and rapidly changing area. So in combination our course provides a comprehensive and valuable view on how to think about building energy efficiency. How to identify its challenges, and how the opportunity space is rapidly expanding around the globe. So with that, we’re happy to take questions now. Thank you, Dian and Steve, and Will for getting us, uh, started and uh, providing this, ah, very important information, ah, for our uh, attendees today. Thank you very much Anita. And Dian and Steve thank you very much for the informative webinar. So there are quite a number of questions and, um, I have, ah, I’m going to, uh, read them out here. So the first question concerns what innovative financial mechanisms are emerging beyond what has been at play and that will drive the enormous capital needed for customers to move to large-scale clean energy adoption. Sure. So with- um, what is in play right now, uh, you- you have generally traditional and non-traditional financing mechanisms. Uh, traditional ones are typical loans and leases, non-traditional are more specialized like energy service performance contracts and PACE. But what’s emerging right now is actually energy service agreements. And that’s essentially looking at energy efficiency on a subscription model where essentially you are, um, paying for the reduction of the consumption of some elements, say it’s energy, say it’s water, um, something along those lines. And instead of being capital intensive, um, there is a company that you just subscribe and you agree upon what is the level of energy efficiency you will achieve. And then that is essentially, uh, the provider will- will be able to, um, hopefully meet that goal. Um, and that is where it makes it cost-effective for the, ah, receiving entity to actually pay for this because there is a reduction in the cost. At the same time, they don’t have to go and search for the capital outlay. That is actually the responsibility of the energy service agreement provider who would probably be more savvy in trying to find the capital that they can then use to provide this subscription. And then they start getting cashflow from the entity who is actually receiving their, their, um, their services. So one, for example, is cooling as a service. That is something that is emerging. Cooling is very, very important especially as the emerging economies, um, seek to essentially move, uh, and er, install air conditioning. Ah, that is as a first-time basis quite expensive. But if there are models that are able to essentially alay that cost, um, then those are the ones that are actually seeing a lot of uptake. And you’re seeing that in India, um, in some case in China, and some cases in the Southeast of the US. Thank you, Steve. Dian would you like to add anything to the [inaudible] [OVERLAPPING] What I would say is that, um, thinking back to what we talked about earlier today on intelligent efficiency, that to me is where it’s so exciting to think about. With intelligent efficiency, we’re starting to build buildings that are quite smart. And instead of being a black hole of what’s going on within them, we understand a great deal about individual components as well as overall systems. So you can think about having that- where does that knowledge go, now that we know what’s going on in buildings? Well, it can go to obviously in some aspects to people who are in the buildings so that they understand that they’re feeling too hot or too cold in different parts of the building, how systems can be adjusted. It can go to the building owners, but it can also go to third parties such as Steve talked about, where they’re not just again dealing with a black hole of where they may have financed some aspects of this smart building. But understanding if parts of it get out of whack, how you go in and do a fine tune retro commissioning of different systems and which ones need to be done. So it’s essentially looking at the various stakeholders involved within uses in buildings, bringing in new technologies through intelligent efficiency. And then having that feedback loop that helps on the financing to make sure that we get the returns back to those who have invested in buildings. And this again, is just an example of why we chose today to highlight on intelligent efficiency. Because it really isn’t just about technology, which is what you might think it is, but it’s about the finance and how that can open up areas as well as some of the new policies. And, you know, just to build on top of that, you reminded me. Um, so what I- how I just described energy service agreements, um, for those who are in the ESCO market. That sounds pretty similar, but en-energy service agreements are actually being targeted toward residential buildings like single, um, homes or duplexes or small, um, and medium enterprises. And those have typically been locked out of what’s called the subscription model for energy efficiency. And because you have these lower-cost, um, mechanisms to find information about the building and you’re able to then, um, see where an intervention might occur, ah, this is why you’re seeing this- this move toward, um, making these smaller buildings smarter. And the smartness of the building then allows the energy service agreement to actually gain traction. Thank you. So in the webinar today, you really highlighted the interdisciplinary nature of addressing building energy efficiency. So the next question touches further upon this. Um, so the question is on what- how does the energy water nexus fit into building energy efficiency, specifically the embedded energy of water? I know that we didn’t talk about that today, but I was wondering if you can comment on the importance of water as well. Um, it’s hugely important. Uh, I think Anita mentioned as part of my background, I was a commissioner at the California Public Utilities Commission, where we oversaw an energy efficiency, um, uh, annual spending by investor-owned utilities in California of over one billion dollar a year. And I was, um, fortunate to be the assigned commissioner, and I actually had, um, some background in water as well as energy. So what we did was that we brought in new policies that had utilities in the water area start to work with utilities in the energy area to offer combined programs because you actually have a lot of energy usage in the, um, production and in the conveyance of wa- and distribution of water into our buildings. That I just looked at California, but it was a major area, I think it’s, um, uh, well over 10 percent, maybe even 15 percent of electricity use is actually related to the conveyance and use of water. So here’s just some quick examples of what can be done like in the policy area, you can set up programs where electric utilities actually provide rebates and incentives for the installation of low flow shower heads. Because then again, you can think about that reduces the energy use, the water use in the building, but because you’re having less water being conveyed and distributed in the building, that also decreases the electric use. And that’s something where internationally, we’re seeing a lot of interests that with climate change, we are increasingly looking at potentially some areas of wide scale, long-duration droughts. So we want to think about our buildings in terms of what are all the usages of our resources within them and how can we combine looking at both water and energy in particular. And I’ll just end with one thing, that, um, in the United States and actually elsewhere, you have utilities that sometimes provide both water and electricity, as well as sewage. So you want to, um, bring them in as players that are looking at a building in an integrated fashion. It just makes no sense to go in and say, hey, how can we reduce say, how can we improve the lighting without also saying at the same time, if you’ve gotten the occupants engaged in thinking about improving their buildings, we want to think about how across all these various areas, they, they can become really helpful in reducing usage and reducing our climate emissions as well. So that goes back to, you know, what we, what we talked about in our course, uh, quite a bit, is thinking about, again, the elements. Who are the stakeholders and how else can you bring them along? And if you can increase the pool of stakeholders that would find an intervention interesting, then the probability that it will get done increases and you can actually save a lot more energy or other- or provide other benefits then you didn’t- that you would have otherwise thought about it if you just went after one specific kind of stakeholder in the beginning. So see, that’s actually a great segue to the next question. So, um, one, um, viewer asks, what are some of the non-energy benefits of building energy efficiency that, um, uh, that you are looking at and others are looking at? So one, one example, um, and, uh, there’s quite a few, but let’s ha- have a concrete example and let’s think about LED lights, okay? So we know that LED li- lights for the amount of luminous flux or amount of light you get out of it for the amount of energy put in is much greater than an incandescent bulb. Fine. But a non-energy benefit is the O&M costs. And so think about what is the lifetime of a typical incandescent, uh, light bulb versus LED? You have one that could last anywhere from 500-1000 hours versus an LED which could last up to 25,000 hours. Now just think about all the instances avoided of someone going and changing that light bulb, right? There’s you being at home and maybe you don’t actually have a cost function for that. But if you’re at a large company and a large facility, think about all the avoided times where you don’t have to deploy crews, especially if they need to go up multiple feet to, um, essentially change that light bulb. So that’s a kind of non-energy benefit where enerve- energy efficiency really starts to pull out and that cost is much greater, that avoided cost of, uh, operations and maintenance is much greater than the actual energy saved and that’s what makes it compelling. And that’s where I’ll just mention- Yeah. -why we focus a lot on integration because it’s a non-energy benefit. Um, you can make sure that it’s really motivating and enhancing the use of, in Steve’s example, LEDs. If you have policies that instead of just valuing the reduced electricity use in the saving on energy bills, that they can also start to count and value some of these non-energy benefits. And that’s where we’re just starting to see really the, um, intense work that needs to be done to sure- to ensure that there’s rigor in this area. But these are real benefits and people value them. And so having policies, [NOISE] excuse me, that can really also provide that value are important. And then the other area that you’ve talked about Steve is the finance side, that, um, people again, this can be a non-energy benefits but still providing an economic value that then can be translated into the financing that’s given for that type of intervention. So that again is why we emphasize so much the multi-dimensional aspect of so many aspects in this area. Speaking of the multi-dimensional aspects, many of our viewers are, uh, from outside of the United States. So I thought we might take a moment and get a more international view of the problem. So one viewer is asking, how do you see some of the ideas discussed here today work in emerging markets like in Africa, where the scaling risk and finances are quite challenging compared to the United States? Um, I’ll say a few words, and then Steve, please come in. The first of all, um, is again, in, in our course, we very much have tried to have, um, information that is universal globally. That today we focused a bit on some examples in the United States, but, um, buildings exist everywhere. And in fact, there’s quite a difference between developed countries where the issue really is existing buildings and how are you going to go in and make them efficient and decrease their emissions, versus in developing countries, um, Africa, uh, China, India, where new buildings are going to be built. So let me start off specifically, um, with the example with Africa. In some ways, um, one aspect that can be easier is we have made great leaps forward in technology. And so you can have new buildings built in Africa or elsewhere that are putting in super efficient lighting, LEDs from the beginning. And because the costs have gone down, you actually can have pretty much a comparable use of LED lighting versus the old-fashioned incandescent. And so that is where you need to have, um, certainly awareness, education, um, perhaps some of the building codes that exist throughout the world that say we’re going to start off with in the developing countries with the new buildings, making sure the best technology on the market is installed. And that’s quite different from thinking about in the United States where you essentially have to get out the old incandescent light bulbs and how do you motivate as well sometimes mandate the replacement in existing buildings of the lighting system. So that’s really what I would start off with is thinking about where the technologies exist, what are their costs, and how do you have awareness of them and then actually support for their use. India has had a very successful, um, program going on that really has incented and motivated use of LEDs on a scale we haven’t seen anywhere else in the world. Did you wanna add something Steve? Yeah. I wanna actually, uh, give a shout out to, um, a firm that was started by a GSB alum, Lauren Dunford and her husband that now operates in Kenya. The company’s called Safi Analytics. And essentially, what it does is for industrial buildings, it goes in there and essentially looks at where are all the different, um, loads and then given how the loads are distributed and what are the operations of the actual facility, what are ways that you can actually reduce cost? The simple fact of just getting information, going in there, putting a few sensors in, and doing the analytics, that cost has gone from here to here over the last few years. So just getting a sense for what is possible, um, getting that baseline information is very, very cost effective, and then from there, you can make more informed decisions. Um, and it’s actually quite amazing some of the, um, interventions that they’ve been able to unearth, simply because you would think that a building would be operating quite efficiently until you actually purposely put the right sensors out there and see that there’s so much, let’s call it low hanging fruit. Um, and again, it’s by distribu- uh, by deploying low cost digitalized technology to help you make those really important decisions. I’ll mention just one other area that I think is hugely important when we think about, um, outside of the United States and globally. And that is cooling. Yeah. That with climate change, we are seeing increased temperatures, but we’re also seeing a rise of people wanting to have cooler buildings and homes. And so there, um, we again go into this in our course. But there was adopted as an amendment to the Montreal Protocol, something called the Kigali Amendment. Which is really, um, the analysis has shown that if we simply have a world that is cooled with the types of air conditioners we have now, which not only can be very inefficient, but also can release very serious greenhouse gases, um, we are going to have much less time than we even have now to deal with climate change. And in fact, we can’t approach the world of cooling the way we have for the last 40 years. So the Kigali Amendment is about developing entire new ways of thinking about cooling new technologies, but maybe even existing technologies such as fans, but that become super efficient, and also coupled with intelligence. So this is an area where, um, it’s- we didn’t have time again today to select every area we would have loved to have talked about with newer opportunities and frontiers. But there’s literally millions of dollars pouring into thinking about cooling worldwide because of the Ki- Kigali Amendment and philanthropic efforts to support it. So anyone interested in cooling, we could go on and on about it, but it’s a very important and critical area. Steve, Dian, you highlighted the disparity in the approach for building energy and efficiency, uh, say between developed countries and developing countries. Uh, one viewer also asks, um, specifically in South Korea, that building energy efficiency is lagging behind and how would you suggest, um, on driving changes in government policies, uh, specifically for South Korea? Um, I’ll take just a little bit again to talk about in the course, we have, um, as we mentioned, different modules. And there’s this a specific module on policy. I joke that this was like my magnum opus after working in this area for 40 years, to try to summarize it. But, um, one of the areas that I teach about is not just what are the basic policy tools in this area, which is so important. And in fact, we cover the role of utilities, which we haven’t had time to talk about today but would have been very important. But I also include a section on tracking policy development and implementation and explain what are some of the major, um, reports that are issued every year in this area. And there are actually great tools where you can go into a country like South Korea. And, um, one of the tools that, um, I teach about tracks policy across, I think, seven different areas. The status of the building codes, the status of working with the utilities, um, the status of having, um, some government lead by example programs. And so I’m not- I will confess that I can’t sit here today and say, here’s exactly what can be done with South Korea. But again, you can go in and look in a very objective, systematic manner, um, to see where things stand of different policies. Because there’s about seven major policy areas for building energy efficiency, and what is happening in countries around the world. And that- that’s what I would suggest to find out sort of where things stand in terms of the mandatory building code, um, appliance standards, um, working with utilities, etc. In the webinar today, you spoke about the importance of, uh, intelligent buildings. And that being one of the pillars of this course, er, let’s take a few moments to talk about that. Um, can you discuss what the role of machine learning and artificial intelligence in informatics, uh, what are their roles in building energy and efficiency? Can you give some specific examples, um, that our viewers can look into? Um, so at a- at a general sense, um, machine learning informatics is there to- it can only be enabled if there are mechanisms or components that actually collect the data. Um, so that- that is step zero. Do you actually have sensors there? Um, are they, uh, connected in a way to a central system so that there is this system that can ingest all this data. There is data that is, um, created within the building, there is data that is created surrounding the building, and then there is data that, uh, would have impact on the building but it comes from outside streams. So let’s call that weather data, for- for example, or even traffic data. And what you would want to be able to do is you would want to be able to collect all this and then start looking for patterns. Um, and you want to start to be able to build a history so that you can actually make predictions and then based on those predictions, and if you implement those predictions, see to what extent they actually make the difference that you’re looking for. Um, there’s a lot of work actually at Lawrence Berkeley National Lab that is trying to, um, think about buildings as a whole system, and to what extent machine learning tools can be actually connected to physics-based tools to bring about a whole building and more accurate, um, approach. In terms of specifics, um, we can talk about, um, that, do you have any, um, specific you want to get into right now? Um, I will, um, mention two areas. One is, this is a plug for another wonderful Stanford professor, uh, Dr. Rishee Jain- Yeah. -who’s not with us today. But he runs here at Stanford the Urban Informatics Lab, and is doing some of the, um, uh, most cutting edge work on looking at buildings, looking at them in urban environments, and then looking at how you’re able to bring in, um, uh, machine learning. And so we were fortunate enough to have, um, Dr. Jain available. And in the course on until energy and efficiency, we include an interview specifically with him. And what he’s really looking at is developing completely new methodologies and approaches that can take in information, um, about buildings across entire urban areas, and then understand in some ways how the buildings are interacting with one another. That if it’s a tall building, it may be shadowing another building and that can affect the energy usage. So there’s some very interesting work going on in this area. The other thing that I’ll mention is that we were fortunate enough to work with, not just our national labs, um, and leading, um, uh, organizations in this area, but with a number of companies as well. And again, we have mini case studies. We had one with, um a company called Clockworks, where it is doing- it is installing, um, sensors and intelligent information systems across buildings globally. And so they are now, through that information, starting to understand and- and really think about, for example, predictive failure of specific types of components and being able to utilize millions of data points that they now have to then, as I said, utilize some machine learning and really improve where you can go into your O&M. So it’s again, very exciting where you can combine, um, some of the cutting edge areas with traditional buildings, and think about how can we move forward? So when we think about a massive amount of information and a large number of people, I think two common concerns that arise are: cybersecurity and privacy. I was wondering if you can discuss, um, how these could be incorporated when designing the next set of solutions, fuel building energy efficiency. Um, I’ll take a stab and then please Steve, um, add on. Sure. Yeah. Yeah. Absolutely. Data privacy is hugely important as is cybersecurity. And we can’t minimize if we are suddenly getting a whole lot more information about what’s going on in our buildings, as well as outside factors that influence them. How are we going to protect in these two areas? Um, and this is where in my area of specialty, policy becomes so important. Um, we do have a lot of policies that have been developed that are changing about- thinking about the, um, uh, data protections. But I, for one, I’m somebody who thinks that we really have technical solutions to a lot of the data privacy concerns. And that, um, we do not need to say that we aren’t going to really take advantage of information about building, um, operations, energy usage, what’s going on in the buildings. Because we can’t protect that information. We really have safeguards that we can use, and so what has to happen is that the policies develop. And this is an area where, um, I’ve been a strong advocate that if you’re a long-time policymaker like me, um, you have to actually spend time understanding where the technology is moving, to understand how you can have policies that take advantage of the technology and are not an impediment. And, um, with cybersecurity, again, that is actually, um, somewhat of an interesting area that Steve teaches about it in the course with them, the data servers. So I don’t know if [OVERLAPPING] you want to mention that one. Um wh- Let’s also be clear-eyed that, yes, uh, i- it needs to be considered, and, ah, what I- what I would, ah, advocate for is, um, standards, and when companies are thinking about creating devices and when they’re thinking about what kinds of clouds or networks they will actually want to use, that those become primary and by design, features that they consider upfront. Um, right now, the- the standards where it comes to, ah, different devices especially when it comes to consumer electronic, um, ah, devices, ah, those can be all over the place. Now, if there- I would actually advocate for, um, the, ah, let’s call it the private sector or the industry to take a best step forward cause it’s actually in their best interest to be able to, um, become trustworthy in the eyes of consumers, and those that are actually trustworthy are the ones that, I think, will have strategic advantages over- over those that are- that are not. So it really is up to yes, policy, absolutely, but industry as well needs to step up and not just wait for policy to- to- to happen and then they complain about it, but it takes steps aggressively for standardization and for best practices when it comes to privacy and cybersecurity, and then also be willing to help educate policymakers as well, because on your own, both constituencies will- will fail. Together, then there’s a fighting hope. We have about, ah, a couple of minutes left, so I thought we can address some questions on financing. Um, there’s a very specific question here. What are your thinking when it comes to C-PACE financing. Ah, it’s continuing to gain market traction but hasn’t quite reached a potential that some would have hoped, one viewer asks. Um, I’m going to be brief and one thought that I have when it comes to commercial PACE is saliency that perhaps, um, those who either have control over the building may not have control over the f- um, let’s call it- you have- you have an occupant who may not have the right ability or the, ah, a position to actually advocate for a change in the building, so there is a, ah, let’s call it a principal agent problem there, or you have someone who owns a smaller building, um, ah, commercial property, and it’s just not salient to them. So I would argue that a- at least on the marketing side and, ah, more cases of success needs to be, um, promoted to that w- what I would, ah, uh, rightly, um, admit is a fractionated market. Now, how do you essentially go to different kinds of small and medium enterprises, and say that commercial PACE is actually, um, providing savings and is actually not that hard to implement upfront? So I’m- I’m just gonna leave it there in the interest of time. We talked more about it in- in the course, um, but that’s my feeling on commercial PACE at a high level. Anything else? No. No. And as our final question [LAUGHTER], we’ve gone through a lot, ah, today, what kind of conversations are necessary to have traditional financing institution create new financial options for building energy efficiency? This, ah, let me start off by saying the good news is, conversations are happening. Um, again, to date myself, I started off 40 years ago, and this was an area where we thought about technology. Back then, it was insulation, um, and we thought about policies, how can we, ah, work with utilities and develop incentive programs, so as we sort of the first basics. But in the last ten years and in the last five years, um, the conversations now do involve finance to a great deal because it’s understood if all we’re thinking about is what is going on with the government and what’s going on with technology, we have left out a key sector. So that’s the first one I would say is that the great news is that we are having conversations. The other thing that, um, Steve mentioned at the beginning of the webinar is, thinking about all the various stakeholders, and that’s when you start to look at the finance area. You start to understand what a ba- broad variety of people there are that are involved in the finance area, and so, um, as in many things in this, um, ah, particular discipline of building energy efficiency, there is no magic one solution, that the best finance efforts now are targeting who is doing Leases and how can we really encourage the use of Green Leases, what is the finance for different types of buildings that we’re building. Um, the type A large scale, um, skyscraper is very different from the finance for a home. And so again, the best efforts that I see are where you have, um, particular programs that work closely with those entities within a particular type of a building segment, understand what the market players are, understanding what motivates people, and then develops programs that are available and publicizes them, and then as rigorous about the feedback of what’s working and what’s not working. Our, um, challenge is that we do have successful examples in this area of bringing in innovation in finance to really improve the efficiency of both existing and new buildings, but we’ve got to scale up, and that’s where, um, it becomes an area of how can the finance community through many of their, um, global organizations really get involved, as well as how can you be working with the policy side. Now, Steve? Ah, and just to add on that, and this is the intersection of intelligent efficiency and finance, and this is where solutions then can become thinkable, because if you want to release finance, if you wanna make capital available, you wanna know what are- what are the risks involved. And if you actually have data and you don’t necessarily have what you had before which is the Black Box, then you can actually track and verify, has a solution actually done what it’s supposed to do? If it’s not, again, because of intelligent efficiency, can you make fine tuned adjustments along the way as opposed to doing a one-shot deal, um, and then not being entirely sure what you’re getting out of it? Ah, that democratization of- of, ah, let’s call it data, especially at the, ah, residential level, I think could, um, you’ll see a lot of new, um, financing tools because that data will start existing on maps. Dian and Steve, on behalf of the Energy Innovation and Emerging Technologies Program, I would like to thank you for sharing your insights and experience on the challenges and opportunities, ah, in building energy and efficiency, and I turn it back to Anita. [NOISE] And Will, thank you for joining us today and, ah, moderating the- the questions for, ah, our presenters. Um, if, ah, you in the audience, if you’d found this presentation to be helpful in any way, we do encourage you to, share the recording with your colleagues, friends, and family, or whoever you think will find this useful. Thanks for taking the time to join with the- us today and have a great rest of your day.

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