U.S. Commercial Sector Potential Energy Savings
Unlocking Energy Efficiencies in American Commercial Buildings
Aug 18, 2009
The potential energy savings of the U.S. commercial sector amount to nearly 6 trillion British Thermal Units (BTUs) of primary energy use, equivalent to over 1 million barrels of oil a year by the year 2020. Achieving this energy conservation in the commercial sector would also yield annual savings of nearly $300 billion while lowering greenhouse gas emissions by 360 megatons per year.
Barriers to Unlocking Energy Efficiencies
Unlocking energy efficiencies in the commercial sector involves a number of barriers such as:
- Ownership Problems. Many commercial buildings are leased and upfront investment in energy efficiencies may not be recouped by the owner but by the lessee.
- Long payback periods. To realize the full potential energy savings, deep retrofits of existing commercial buildings are needed, which in turn take longer to pay back.
- Capital constraints. The commercial sector tends to use available capital to generate new business, increase services and pay dividends. Investing in energy efficiency is not seen as a profit making activity.
- Lack of interest in efficiency culture. Employees in the commercial sector may not see any personal benefits in developing an energy efficiency culture in their work practices.
A multi-faceted approach to energy conservation, especially by government, state and local agencies could help unlock the energy efficiencies in the American commercial sector.
- Mandatory energy efficiency standards. With over 20 billion square feet of floor space, government (local, state and federal) agencies control a sizable amount of the commercial sector. This allows for tighter and more widespread use of mandatory standards to force energy efficiencies in this area.
- Voluntary efficiency codes. Encourage the privately owned part of the commercial sector to increase investment in energy efficiency with tax incentives and legal inducements to adhere to higher voluntary building codes.
- Monetary incentives. Builder subsidies for new buildings could overcome future ownership problems as the financial value of energy efficiencies could be given to the builder rather than the owner.
- Increase awareness of efficiency benefits. Workers should be educated as to the non financial benefits of energy efficient buildings, as such buildings are less prone to “Sick Building Syndrome” and natural light and heating systems tend to increase employee health and fitness.
The use of new and emerging technologies can contribute to energy conservation by using less energy to produce the same or better results. Installation of more efficient lighting systems, the use of motion sensors and new technology to limit heating and lighting needs in offices and the use of automatic standby mode systems in commercial appliances to condition can not only reduce energy use but also produce serious financial savings for the commercial sector. The greatest potential energy savings due to technology come in the area of combined heat and power (CHP) systems. CHP systems produce electricity and thermal energy in an integrated single unit. These can achieve thermal efficiencies of 70% to 80% compared to the 45% from power plant electricity heating an on-site boiler. More widespread use of such CHP systems could produce nearly 25 gigawats of electricity savings in the commercial sector.
Lowering greenhouse gas emissions and energy conservation is not the primary role of the commercial sector, which exists to provide business, goods and services to people. But the McKinsey & Company report “Unlocking Energy Efficiency in the U.S. Economy”, published in June 2009, showed that like home energy savings and industrial power conservation, energy efficiencies in the commercial sector can have an ongoing financial payback. This fact should help raise energy conservation in the commercial sector’s list of priorities.
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