On July 4th, 2013, DaBx Demand Side Solutions, Inc., published an update to its 2011 report — DaBx PlaNYC2020, a paradigm shift. It is available on Scribd (follow the link).
The recent update reflects the current developments, both the aftermath of Superstorm Sandy, which was a wakeup call for the City and the country, and the publication of the 90by50 Report from the Urban Green Council, which provided an overall framework for gradual improvements in buildings in the context of regular maintenance and update cycles, to the point of eliminating 90% of carbon emissions from the city by 2050. The DaBx PlaNYC2020 report pertains to a subset of the building classes addressed in the 90by50 report, which according to DaBx are suitable for much faster overhaul, and would give New York City an opportunity to achieve its Clean Air act objectives in relatively short order.
Because of recent events, building resiliency is now becoming an important design feature, and it was central to the DaBx PlaNYC2020 when it was first released on July 4th of 2020. Rogier Fentener van Vlissingen, President of DaBx, explains that he recently redeveloped key themes of the original report in the form of blog posts, culminating in the recent proposal of the DaBx Renewable Energy Retrofit Portfolio Standard for Multi-family Buildings. Evidently, partial independence from the grid, or building resiliency, which was part of the original design strategy, has become more urgent since hurricane Sandy.
Other recent developments are also discussed in recent blog posts and in this updated report, particularly the new developments in green finance, including PACE bond financing. The report points out that PACE bonds would soon be indispensable, if they were focused on renewable energy, not energy efficiency. It is renewable energy that requires the large up-front capital investment which would justify the existence of PACE bonds, and not only that, make them indispensable, and a contributing factor to rising asset values, as buildings come closer and closer to net-zero operation. As van Vlissingen argues, net-zero is becoming the new reference standard, simply because it is the fastest growing construction sector already for the last twenty years, and was hardly affected by the recent real estate crash.
One of the central issues underlying the design strategy in this report is the insight that energy efficiency produces diminishing returns and is a seriously deficient investment strategy, while renewable energy projects improve asset values and frequently can produce compound returns for a property, paying off increasingly with every successive investment.
For the same reasons, the report also notes that the difficulties with placement of energy efficiency securities can be completely explained by the fact that they are a wasting asset, because of several factors, including:
1) Energy efficiency securities typically reflect projects with only 20-30% efficiency improvements.
2) Such small improvements are easily wiped out by expected energy price increases in the next 10 years.
3) With net-zero construction booming, the fact that a building is 20-30% more efficient than last year is nearly irrelevant, when the real standard will increasingly become how close a building comes to net-zero operation.
4) More to the point, if similar buildings can and do upgrade to renewable energy, which results in a future without energy bills and Green House Gas emissions, the 20-30% “savings” will become nearly pointless.
5) Energy efficiency loans are inherently unstable because they tend to finance a relatively small short-term improvements with long-term money.
Or, as van Vlissingen summarizes it: “Thirty years without energy bills will beat out 20-30% energy savings almost any time, and the difference between the Titanic sinking in five minutes or ten is not an investment” and also: “Energy efficiency of a carbon based system is not an investment, but a client retention strategy for the fossil-fuel industry. Only renewable energy builds property values by moving energy from liabilities to assets in a building.” More information is available through the dabx website, or through van Vlissingens personal blog at www.vliscony.com.
Name: Rogier Fentener van Vlissingen
Email: Send Email
Organization: DaBx Demand Side Solutions, Inc
Address: 2141 Starling Avenue
Release ID: 17714