How to Earn the LEED Green Power Credit

Transcription

1 3D EG REES WH ITE PAPER How to Earn the LEED Green Power Credit Using on-site and off-site renewable energy to mitigate the impact of greenhouse gas emissions associated with a LEED project s energy use August 2012

2 Prologue Buildings use a lot of electricity. In fact, according to the U.S. Department of Energy, buildings are responsible for more than 72% of U.S. electricity consumption. 1 And, with more than 67% of the electricity in the U.S. generated from the combustion of coal, natural gas, oil or other fossil fuels, the electricity used by U.S. buildings results in the emission of approximately 1.7 trillion metric tons of carbon dioxide per year. 2 U.S. Electric Net Generation (2009) The electricity used by U.S. buildings results in the emission of approximately 1.7 Other Renewables 3.6% Hydroelectric 6.8% Other 0.3% Nuclear 20.2% Coal 44.5% trillion metric tons of carbon dioxide per year Other Gases 0.3% Natural Gas 23.3% Petroleum 1.0% Source: U.S. Department of Energy, 2009 Renewable Energy Data Book, 10 Impact on the Climate These greenhouse gas (GHG) emissions have an impact on the earth s climate. The United Nations Intergovernmental Panel on Climate Change Fourth Assessment Report concluded that, if the world does not dramatically lower its carbon dioxide and other greenhouse gas emissions, it is likely that by 2100 the earth s temperature will rise between 2 to 4.5 degrees Celsius, with a best estimate of about 3 degrees Celsius (5.4 degrees Fahrenheit). 3 Such a rapid and significant increase in the Earth s temperature would result in extensive environmental, economic and humanitarian damage. For example, a report issued in 2006 by Nicholas Stern, a former chief economist of the World Bank, concluded that a 2-to-3-degree increase in average temperatures could leave one-sixth of the world s population facing floods or droughts and reduce crop production in Africa enough to put several hundred million people at risk of starvation. 4 1 U.S. Department of Energy, Buildings Energy Data Book, (2011) IBID, IPCC, IPCC Fourth Assessment Report: Climate Change, (2007), 38 4 HM Treasury, STERN REVIEW: The Economics of Climate Change, 6 2

3 Taking Responsibility Architecture, real estate and construction professionals increasingly realize that they must take responsibility for the climate and other impacts their buildings have on the environment. Specifically, these professionals have teamed up with the United States Green Building Council (USGBC) to develop the Leadership in Energy and Environmental Design (LEED) rating system, which provides guidelines on how they can mitigate the impact buildings have on the environment. In many cases, this means using energy-efficient lighting, improved HVAC systems, sophisticated energy management software, and other tools and techniques to lower the amount of electricity used by their buildings. By reducing the need to burn more fossil fuels or bring new fossil-fuel power plants online to generate electricity for their green building projects, these energy conservation and efficiency measures generate the greenest possible megawatts of electricity megawatts that are not used. The USGBC has developed guidelines that encourage the use of renewable resources such as wind, solar, geothermal, biomass and low-impact hydro to generate the electricity used by buildings However, even the most energy-efficient buildings in the world still need electricity to operate. Realizing this, the USGBC has also developed guidelines that encourage the use of renewable resources wind, solar, geothermal, biomass and low-impact hydro to generate the electricity used by buildings. Unlike fossil fuels, these renewable resources emit few, if any, additional GHG emissions into the atmosphere. These guidelines which we will refer to in this white paper as the Green Power Credit award points to buildings and other LEED projects that produce and use renewable energy on-site (as in a photovoltaic solar power system installed on a building s roof) or that match their electricity use with renewable energy produced off-site (as in a wind farm). This white paper will explain these guidelines and show how architecture, real estate and construction professionals can use them to earn points toward LEED certification points that recognize the fact that rising use and demand for green power accelerates the low-carbon, renewable energy economy. 3

4 Executive Summary USGBC Green Power Guidelines The USGBC has three sets of green power guidelines, all falling under LEED s Energy & Atmosphere section. These guidelines are: EAc2 (On-Site Renewable Energy) for the LEED New Construction, Core and Shell, Schools, Healthcare and Retail ratings systems. EAc4 (On-Site and Off-Site Renewable Energy) for the LEED Existing Buildings 2008, Existing Buildings 2009 and Commercial Interiors rating systems. EAc6 (Green Power) for the LEED New Construction, Core and Shell, Schools, Healthcare and Retail ratings systems. EAc2, EAc4 and EAc6 provide guidance on how to earn LEED points through the installation of renewable energy generation technologies at the LEED project (on-site) or through the purchase of renewable energy produced away from the LEED project (off-site). Off-site renewable energy purchase requirements can be satisfied by matching the project s electricity with Green-e Energy Certified Renewable Energy Certificates (RECs), by purchasing green power from a Green-e Energy Certified provider, or by enrolling in a Green-e Energy Accredited utility green power program. EAc2, EAc4 and EAc6 provide guidance on how to earn LEED points through the installation of renewable generation technologies at the LEED project (on-site) or through the purchase of renewable energy produced away from the LEED project (off-site) LEED Points Available The EAc2, EAc4 and EAc6 guidelines enable projects to earn between: 1 to 8 LEED points if they offset a portion of the project s electricity cost through the installation and use of on-site renewable energy generation. 1 to 6 LEED points if they offset a portion of the project s electricity use with off-site renewable energy. In addition, in order to earn points under the LEED Existing Buildings 2009 rating system, projects need to offset emissions from the use of natural gas or other fossil fuels by purchasing verified carbon offsets, which represent verified reductions in greenhouse gas emissions. 4

5 On-Site Renewables The renewable energy technologies that can be used to earn on-site renewable energy LEED points are: Solar photovoltaic panels Solar thermal power systems Wind turbines Geothermal systems Biomass and Biogas systems Low-impact hydro systems On-site renewable energy provides many benefits outside of a reduction in the project s environmental impact and the opportunity to earn up to 8 LEED points Wave or tidal systems Architectural features, passive solar strategies, daylighting strategies, geo-exchange through the use of ground source heat pumps, and off-site renewable energy are not eligible for on-site renewable energy LEED points. Benefits On-site renewable energy provides many benefits outside of a reduction in the project s environmental impact and the opportunity to earn up to 8 LEED points. By installing PV panels, wind turbines, or other renewable energy technologies on-site, the project can: Directly communicate to tenants and visitors that it is powered by renewable resources Reduce the cost of purchasing electricity from the grid Receive government renewable energy incentives Earn a financial payback over time thanks to lower grid electricity purchases Secure a hedge against the risk that electricity prices will rise in the future 5

6 Drawbacks However, there are also drawbacks to on-site renewable energy. These drawbacks include: Large upfront costs for the purchase and installation of these technologies Lengthy financial payback periods of 5 to 20 years or more Site and renewable resource constraints, as not all projects are in locations that are well-suited for using sunlight, wind or other renewable resources to generate electricity Only energy produced on-site that is captured and used (and not delivered back to the grid) can be included in point calculations Design and construction considerations, as the project might not have enough space, the necessary infrastructure, or otherwise not be able to accommodate a renewable energy system The time investment required to scope, select and install the system Requirements If a project chooses to install an on-site renewable energy system, the performance of the system will be determined by expressing the energy produced by the on-site system as a percentage of the building s annual energy cost. If you are unsure of what this cost will be, you can estimate annual energy costs by using the EAc1 Optimize Energy Performance energy model or the U.S. Department of Energy Commercial Buildings Energy Consumption Survey (CBECS). The only exception to this requirement are projects that use the Existing Buildings rating system in this case they must express the energy produced by the on-site system as a percentage of the building s annual energy use. The guidelines require that the on-site system deliver electricity to the grid when its output exceeds the project s demand (though exceptions are available for select projects). In addition, only energy produced on-site that is captured and used (and not delivered back to the grid) can be included in point calculations. Finally, to secure points the project must retain the Renewable Energy Certificates (RECs) generated by the system. These RECs represent the environmental attributes (such as avoided GHG emissions) associated with the generation of electricity from renewable resources. If a project wants to sell the RECs produced by its on-site system, but still secure LEED points for its installation and use, it must purchase from an outside party Green-e Energy Certified RECs equal to 100 percent of its on-site system s annual rated energy output. 6

7 LEED Points The chart below provides details on the number of points available to projects that install and use on-site renewable energy under various LEED rating systems. Points Available for Offsetting % of Project s Energy Cost New Construction v2009 EAc2 1% 3% 5% 7% 9% 11% 13% 15%* v2.2 EAc2 2.5% 7.5% 12.5% v2.1 EAc2 5% 10% 20% Existing Buildings v2009 EAc4 3% 4.5% 6% 7.5% 9% 12% v2008 EAc % 6% 9% 12% v2.0 EAc2 3% 6% 9% 12% Existing Buildings must account for total energy usage and must offset a percentage of electricity use, not cost Commercial Interiors v2009 EAc4 v2.0 EAc4 Onsite credit not available for Commercial Interiors Core and Shell To secure points the project must retain the Renewable Energy Certificates (RECs) generated by the system. These RECs represent the environmental attributes associated with the generation of electricity from renewable resources. v2009 EAc2 1% 5%* v2.0 EAc2 1% Schools v2009 EAc2 1% 3% 5% 7% 9% 11% 13% 15%* v2007 EAc2 Healthcare v2009 EAc2 1% 3% 10% 20% 30% 40% Retail v2009 EAc2 1% 3% 5% 7% 9% 11% 13% * Innovation in Design point is possible. 7

8 Off-Site Renewables In addition to on-site renewables, off-site renewable energy provides another way for buildings to mitigate the environmental impact of their energy use and earn LEED points. Off-site renewable energy can be used alone, or in conjunction with on-site renewable energy generation technologies. There are three different options for securing LEED points using off-site renewable energy: RECs: Projects can purchase Green-e Energy Certified Renewable Energy Certificates (RECs) generated by off-site renewable energy facilities. Off-site renewable energy can be used alone, or in conjunction with on-site renewable energy generation technologies Electricity Markets: In open or deregulated electricity markets, projects can purchase green power from a Green-e Energy Certified power provider, or sign a power purchase agreement (PPA) with a Green-e Energy Certified renewable energy facility. Utility Green Power Programs: In closed electricity markets, projects can enroll in a Green-e Energy Accredited utility green power program. The amount of Green-e Energy Certified green power or RECs that a project must purchase to qualify for LEED points varies, depending on the rating system (See Table 2). For off-site renewable energy LEED points, the amount of green power or RECs that must be purchased to qualify for points is calculated using the project s electricity use. Green-e Energy Certification As seen above, in all cases projects can only earn LEED points if their off-site renewable energy is Green-e Energy Certified. Managed by the non-profit Center for Resources Solutions, Green-e Energy is the nation s leading voluntary certification program for renewable energy. Green-e Energy certifies that green power and RECs are: Produced by renewable energy facilities that were built or repowered on or after January 1, 1998 Not double-counted only one organization or individual has the right to claim the environmental attributes associated with each megawatt hour of green power or RECs sold Beyond business as usual that this generation of renewable energy was not required by law or used to satisfy a government mandate 8

9 Green-e Energy certifies renewable energy generated using the following resources: Wind Solar Geothermal Biomass Biogas Low-impact hydro Wave or tidal Renewable Energy Certificates Green-e Energy certifies that green power and RECs meet the minimum standards for consumer protection as outlined by the non-profit Center for Resource Solutions RECs are created when a wind farm, solar generating station, or other type of renewable energy facility generates and delivers electricity to the power grid. The sale of RECs provides renewable energy project owners with an additional revenue stream that supplements the revenues they would receive if they only sold the project s electricity. This helps make renewable energy projects more profitable and therefore more competitive with fossil fuels like coal and natural gas. TRADITIONAL ENERGY FOSSIL GENERATOR FUEL ENERGY Coal, GENERATOR Natural Gas Natural Gas, Coal RENEWABLE ENERGY GENERATOR Wind What is a Renewable Energy Certificate? Electricity Electricity REC A REC represents the environmental attributes of 1 megawatt-hour of renewable energy POWER POOL Electricity YOUR COMPANY Without REC Purchase YOUR COMPANY With REC Purchase $ 3DEGREES REC 3Degrees markets Green-e Energy Certified Renewable Energy Certificates RECs enable organizations who want to use green power, but cannot generate all of the electricity they need from on-site renewable energy generation technologies, mitigate the environmental impact of their electricity use. By matching their electricity use with RECs, these organizations increase demand 9

10 for renewable energy and encourage the development of new renewable energy projects. RECs are endorsed by the EPA, Union of Concerned Scientists, the Environmental Defense Fund and the World Resources Institute as a way to support and encourage new development of renewable energy facilities. In 2010, thousands of LEED projects purchased green power or RECs including the USGBC s headquarters in Washington D.C. Carbon Offsets LEED projects may obtain up to 6 points through off-site renewables and carbon offsets Green power and off-site renewable energy can only be used to offset electricity use. For projects that fall into the Existing Building 2009 rating system, the project needs to secure Green-e Climate Certified (or equivalent) carbon offsets to balance out the emissions associated with purchased steam or from natural gas, propane, or fuel oil combusted on-site. The Agricultural Methane Carbon Offset Process CO2 Manure Pond METHANE Flare OFFSET Manure Fertilizer 1. Manure from dairy cows is collected and channeled to the digester, preventing methane from being released into the atmosphere. 2. Methane given off by the manure is collected in the dome at the top of the digester tank. The manure is transformed into organic fertilizer. 3. Methane is channeled to the flare, which destroys the methane and releases CO2 back into the air. The environmental impact is 20x less than that of methane. A carbon offset represents the reduction of one metric ton of carbon dioxide equivalent (CO 2 e) greenhouse gas emissions below a baseline or businessas-usual level. Only greenhouse gas reductions that are third-party verified to be real, quantifiable, permanent and additional are certified by Green-e Climate and other major carbon offset certification standards. By purchasing high-quality verified carbon offsets from greenhouse gas emission reduction projects, organizations provide these projects with revenue that helps make them economically viable encouraging further development of such projects. 10

11 Benefits and Drawbacks There are advantages and disadvantages associated with purchasing green power from a Green-e Energy Certified power provider, enrolling in Green-e Energy Accredited utility green power program, or buying Green-e Energy Certified RECs. Some of these benefits and drawbacks are described below. ADVANTAGES DISADVANTAGES Renewable Energy GREEN POWER FROM A POWER PROVIDER Electricity and Green Power costs are combined on the same bill Often fail to provide communications support Often difficult to specify where in the country the green power is generated Certificates (RECs) are often less expensive than Might need to change utility/power provider relationship utility programs or bundled green power purchases UTILITY GREEN POWER PROGRAM Simple sign-up process Cost for green power is integrated into the monthly utility bill Programs often support local or regional off-site renewable energy facilities Often more expensive than RECs sold separately from electricity Some programs do not enable projects to match 100 percent of their electricity use with green power Programs often offer marketing and communications opportunities RENEWABLE ENERGY CERTIFICATES (RECS) Often less expensive than utility programs or bundled green power purchases Invoice for RECs is separate from electricity bill Simple contracting process No change to the project s utility relationship Marketing and communications support Can choose RECs sourced from a facilities located in a variety of geographies (local or nationwide) or using a variety of different renewable resources (wind, solar or geothermal) 11

12 Requirements Each of these options also has specific procurement requirements. For green power purchases from Green-e Energy Certified power providers, the project must secure a two-year contract. For Green-e Energy Accredited utility green power programs, the project must be enrolled in the program for at least two years. And for Green-e Energy Certified RECs, the project must make a twoyear purchase commitment. To qualify for LEED points, Green-e Energy Certified REC or power purchases must include a two-year commitment Bundled green power, utility green power programs and REC pricing is influenced by many factors, including where the off-site renewable energy is generated and the type of renewable energy resource used. However, in most cases the cost for RECs will be between.5 and 2 percent of the project s base electricity costs. LEED Points The chart below explains what percentage of a project s electricity must be offset with off-site renewable energy in order to qualify for LEED points. Points Available for Offsetting % of Project s Energy Use New Construction Existing Buildings v2009 EAc6 35% 70%* v2.2 EAc6 35% 70%* v2.1 EAc6 50% 100%* v2009 EAc4** 25% 37.5% 50% 62.5% 75% 100% O&M EAc % 50% 75% 100% v2.0 EAc2 15% 30% 45% 60% 75%* Existing Buildings must account for total energy usage and must offset a percentage of electricity use, not cost Commercial Interiors v2009 EAc4 50% 100%* v2.0 EAc4 50% 100%* Commercial Interiors usage: Total quantity of electricity consumed or 8 kwh/square foot Innovation in Design point is 100% or default of 16 kwh per square foot per year Core and Shell*** Schools Healthcare Retail v2009 EAc6 35% 70%* v2.0 EAc6 35% 70%* v2009 EAc6 35% 70%* v2007 EAc6 35% 70%* v2009 EAc6 35% 70%* v2009 EAc6 35% 70%* * Innovation in Design point is possible. ** Green power or renewable energy certificate purchases should be used to offset electricity use only (Scope 2 emissions). Verified by Green-e Climate or equivalent, carbon offsets should be used to offset emissions from purchased steam or from natural gas, propane, or fuel oil combusted on-site. *** Core and Shell electricity usage is 15% of total building electricity demand. 12

13 Conclusion In addition to making buildings more energy efficient, architecture, real estate and construction professionals can mitigate the environmental impact of their buildings energy use using on-site or off-site renewable energy. LEED s Energy & Atmosphere guidelines allow projects to earn points for installing renewable energy generation (such as photovoltaic solar panels) on-site. They can also earn points by supporting off-site renewable energy facilities (such as wind farms) through green power purchases from Green-e Energy Certified power providers, enrollment in Green-e Accredited utility green power programs or by matching their electricity use with Green-e Energy Certified Renewable Energy Certificates (RECs). Next step Get a quote: If you are interested in getting a green power REC quote for your LEED project, call 3Degrees at or LEED@3degreesinc.com This wide variety of options makes it possible for most LEED projects to take responsibility for the environmental impact of their energy use. Architecture, real estate and construction professionals are increasingly utilizing these options, channeling capital to photovoltaic solar system installers, wind farm owners and others who manufacture, install and operate the low-carbon renewable energy infrastructure. As a result, these professionals encourage development of the energy infrastructure the world needs to lower greenhouse gas emissions and mitigate the effects of climate change. About 3Degrees 3Degrees mission is to mitigate the effects of climate change by accelerating the development of a low-carbon, renewable energy economy. 3Degrees realizes this mission by helping its utility, business, green building and other partners utilize environmental markets to build stakeholder value. Winner of the U.S. Department of Energy s Green Power Leadership Award for five straight years, 3Degrees is headquartered in San Francisco and operates regional offices in Portland, St. Louis, Seattle and Richmond. To learn more, visit 3degreesinc.com SAN FRANCISCO PORTLAND ST. LOUIS SEATTLE RICHMOND 13