Esb Overview Deck

8/10/2019 Esb Overview Deck

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OVERARCHING MESSAGE

There is a compelling need as well as an economic case

for reducing greenhouse gas emissions in existingbuildings. The Empire State Building case study providesan example of how this can be done. However, significant

challenges remain that must be addressed in order toquickly and cost-effectively capture the full greenhouse

gas reduction opportunity for building retrofits on awidespread basis.

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PRESENTATION OVERVIEW

I. Motivation: The retrofit of the Empire State Building was motivated by the owners desirereduce greenhouse gas emissions, to demonstrate how to retrofit large commercial buildings effectively, and to demonstrate that such work makes good business sense.

II. Project Development Process: Using ESB as a convening point, a collaborativeteam was formed to develop the optimal retrofit solution through an iterative process that invexperience, energy and financial modeling, ratings, metrics, and robust debate.

III. Key Findings: At current energy costs, ESB can cost-effectively reduce energy use by38% and save (a minimum of) 105,000 metric tons of CO2 over the next 15 years.

IV. Implementation: Three different stakeholders will implement the 8 savings measures ova 5-year period using various implementation mechanisms.

V. Key Lessons: Key lessons relate to strategies to maximize cost-effective savings,balancing CO2 savings with economics, and streamlining the project development process.

VI. Industry Needs: Challenges in each stage of the retrofit process are hindering theachievement of long-term goals.

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VI. NeedsV. Key LessonsIV. Implementation

III. Key FindingsII. Process

I. MOTIVATION

The retrofit of the Empire State Building was motivated by the buildingownerships desire to:

1) Prove or disprove the economic viability of whole-building energ

efficiency retrofits.2) Create a replicable model for whole-building retrofits.

3) Reduce greenhouse gas emissions.

I. Motivation


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5

Prior to 2008, the Empire State Buildings performance was average compareto most U.S. office buildings.

Annual utility costs:

$11 million ($4/sq. ft.) Annual CO2 emissions:

25,000 metric tons (22 lbs/sq. ft.)

Annual energy use: 88 kBtu/sq. ft.

Peak electric demand: 9.5 MW (3.8 W/sq. ft. inc. HVAC

I. MOTIVATION1) Prove or disprove the economic viability of whole-building energy efficretrofits.


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0

20

40

60

80

100

120

T o t a l E S B C a p

i t a l B u d g e

t ( m

i l l i o n

$ )

Capital Budget Adjustments for Energy Efficiency Projects

6

With a $500 million capital improvement program underway, ownershipdecided to re-evaluate certain projects with cost-effective energy efficiencand sustainability opportunities in mind.


2008Capital

Budget forEnergy-Related

Projects =$93m+ 0%

EnergySavings

Sum of adds /changes / deletes

= +$13m

New CapitalBudget w /EfficiencyProjects =

$106m+ 38% Energy

Savings


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Energy efficiency and sustainability provide amenities (lower energy costeasier carbon reporting, daylighting, etc.) that set the building apart fromsurrounding tenant space.

($30,000)

($25,000)

($20,000)

($15,000)

($10,000)

($5,000)

$0

$5,000

$10,000

$15,000

1 2 3 4 5 6 7 8 9 10 11 12

N o m

i n a l

D o l

l a r s

( $ )

Year in Lease

Illustrative: Tenant Utility Cash Flow

Annual cost/savings NPV

If tenants understand (and cancapture) the value of extrainvestments up front, they aremore likely to make them.



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VI. NeedsV. Key LessonsIV. ImplementationIII. Key FindingsII. Process

I. MOTIVATION




3) Reduce greenhouse gas emissions.

I. Motivation


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I. MOTIVATION2) Create a replicable model for whole-building retrofits.

There are known opportunities to cost-effectively reduce greenhouse gasemissions, yet few owners are pursuing them.

Building efficiency measures are identifiedas having negative costs.

Source: NRDC - http://www.nrdc.org/globalwarming/blueprint/default.asp

Cutting U.S. Global Warming Pollution 80% by 2050: Cost & Payoff by Sector


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ESB ownership wants to demonstrate how to cost-effectively retrofit a larmulti-tenant office building to inspire others to embark on whole-buildingretrofits.

I. MOTIVATION2) Create a replicable model for whole-building retrofits.

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I. MOTIVATION




3) Reduce greenhouse gas emissions cost-effectively.

I. Motivation


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We need to reduce greenhouse gas emissions by 75% by 2050 to stabilizethe climate.

I. MOTIVATION3) Reduce Greenhouse Gas Emissions

Business as usual global emissions*

5562

85

64%68%

76%

2008 2030 2050

We need to be at20 GtCO2e by2050 to mitigateclimate change

Today, were at55 GtCO2e

*Source: McKinsey Analysis, IPCC, Stern Review (2006)


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The building sector must be a large part of the solution as it is the largestcontributor to U.S. greenhouse gas emissions.

We need to be at20 GtCO2e by2050 to mitigateclimate change

Source: EIA data - Table 12.2: http://www.eia.doe.gov/emeu/aer/envir.html

0

500

1,000

1,500

2,000

2,500

1980 1984 1988 1992 1996 2000 2004

M i l l i o n

M e t r i c

T o n s o f

C a r

b o n

D i o x i d e

Year

U.S. CO2 Emissions by End-Use Sector: 1980 - 2006

Buildings Industry Transportation

Buildings are responsible for 38%

of CO2 emissions in the U.S.



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Nearly 75% of U.S. commercial buildings are over 20 years old (and thusready for retrofit). Retrofitting existing buildings must be part of the solut

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Before 1920 1920 to 1945 1946 to 1959 1960 to 1969 1970 to 1979 1980 to 1989 1990 to 1999 2000 to 2003

M i l l i o n s q u a r e

f e e t o f

C o m m e r c i a l

B u i l d

i n g

Year Constructed

U.S. Commercial Building Space by Age

Source: EIA data - Table 12.2: http://www.eia.doe.gov/emeu/aer/envir.html

72% of the U.S. commercial stockwas constructed before 1990.



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I. MOTIVATION

I. Motivation

The goal with ESB has been to define intelligent choices whichwill either save money, spend the same money more efficiently,or spend additional sums for which there is reasonable paybackthrough savings. Addressing these investments correctly willcreate a competitive advantage for ownership through lowercosts and better work environment for tenants. Succeeding inthese efforts will make a replicable model for others to follow.

- Anthony E. Malkin


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II. PROJECT DEVELOPMENT PROCESS

Using ESB as a convening point, a collaborative team was formed todevelop the optimal solution through a rigorous and iterative process thatinvolved experience, energy and financial modeling, ratings systems,technical advice, and robust debate. Key points include:

1) Five key groups and a host of contributors used a collaborative aniterative approach.

2) A 4-phase project development process helped guide progress.

3) A variety of complementary tools were used and developed totriangulate to the best answer.

VI. NeedsV. Key LessonsIV. ImplementationIII. Key FindingsII. ProcessI. Motivation


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II. PROJECT DEVELOPMENT PROCESS1) Five key groups and contributors used a collaborative and iterative appr

The project development process, which the team focused on, is the first towards executing and verifying the success of a retrofit.

Project development is focused on understanding current performance, analyzing

opportunities, and determining which projects to implement.

ProjectExecution

Measurement &Verification

2010 2025Retrofit Project Timeline


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Core team members for the project development process included the CliClimate Initiative (CCI), Johnson Controls Inc. (JCI), Jones Lang LaSalleRocky Mountain Institute (RMI), and the Empire State Building (ESB).

Owner Empire State

Building Company LLC

Project Manager Jones Lang LaSalle

Energy ServiceCompany

Johnson Controls Inc.

Project Advisor Clinton Climate Initiative

Design Partner &Peer Reviewer

Rocky Mountain

Institute

OperationsReviewer Empire State

Building Operations


Team Organization Chart


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Many other contributors, in addition to the core team, provided additionalexpertise to fully explore all opportunities.


Leasing agents

3rd party review

Financialexperts

M&V experts

Architects

Ownership/

Management

EngineersSustainabilityExperts

EnergyModelers

Contractors

GoalSetting

BrainstormingCharrettes

Benchmarking

Contractor Estimates

DesignDrawings

EnergyModeling

Financial/LCCAModeling

ToolDevelopment

FieldVerification

ProjectDevelopment


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II. PROJECT DEVELOPMENT PROCESS

Using ESB as a convening point, a collaborative team was formed todevelop the optimal energy efficiency retrofit solution through a rigorousiterative process that involved experience, energy and financial modelingratings systems, technical advice, and robust debate. Key points include:

1) Five key groups and a host of contributors used a collaborative aniterative approach.

2) A 4-phase project development process helped guide progress.

3) A variety of complementary tools were used and developed totriangulate to the best answer.



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Project activities (audits, workshops, presentations, analyses, reports, etc.were divided into 4 phases.

II. PROJECT DEVELOPMENT PROCESS2) A 4-phase project development process helped guide progress.

Phase I: Inventory& Programming

Phase II: DesignDevelopment

Phase III: DesignDocumentation

Phase IV: Final Documentation

Tenant Initiatives (prebuilts,design guidelines, energymanagement) Report

Tuned eQUEST model

Model (eQUEST, financial,GHG) outputs

Integrated SustainabilityMaster Plan Report (inc.Energy Master Plan)

April 14th kick-off meeting May 7 th /May 14th team

workshops June 2 nd Presentation to

Ownership

Baseline Capital ProjectsReport

Baseline EnergyBenchmark Report

June 18 th TheoreticalMinimum workshop

July 2 nd workshop July 15 th Presentation to

ownership

July 30 th Tenant Focusworkshop

August 13th eQUESTworkshop

August 27 th Presentation toOwnership

Sept. 10 th workshop Sept 29th Presentation to

Ownership October 6-8 th Finance

workshop (Boulder) Nov 10 th Presentation to

Ownership

A c t

i v i t i e s

O u t p u

t s


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Significant time was spent 1) refining energy and financial model inputs to eoutputs were accurate and 2) understanding the critical relationship betweeneconomics and CO2 reductions.

II. PROJECT DEVELOPMENT PROCESS2) A 4-phase project development process helped guide progress.

2008 2010 2012 2014 2016 2018 2020 2022 D o l l a r s

( $ )

Incremental Cash Flow for

each Package of Measures

2008 2010 2012 2014 2016 2018 2020 2022

A b s o l u t e

M e t r i c

T o n s o f

C O 2

CO2 Emissions for each

Package


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Industry standard and newly developed design tools, decision-making tooand rating tools helped to evaluate and benchmark existing and futureperformance.

II. PROJECT DEVELOPMENT PROCESS3) A variety of tools were used and developed to triangulate to the best an

Design Tools Decision-Making Tools Rating Tools


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III. KEY FINDINGS

At current energy costs, the Empire State Building can cost-effectivelyreduce energy use by 38% and save (a minimum of) 105,000 metric tonsCO2 over the next 15 years.

1) Eight interactive levers ranging from base building measures totenant engagement deliver these results.

2) Key reductions in peak cooling and electric loads are possible.

3) Enhanced work environments are created.

4) Various green certifications can be obtained.


III KEY FINDINGS


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The Empire State Building can achieve a high level of energy and CO2reduction cost-effectively.

III. KEY FINDINGS1) Eight interactive levers ranging from base building measures to tenantengagement deliver these results.

NPV Max

NPV Mid

NPV Neutral

Max CO2

Reduction

($25,000)

($5,000)

$15,000

$35,000

0 40,000 80,000 120,000 160,000

N e t

P r e s e n t

V a l u e o f

P a c

k a g e o f

M e a s u r e s

T h

o u s a n

d s

Cumulative metric tons of CO2 saved over 15 years

15-Year NPV of Package versus Cumulative CO2 Savings

There are diminishing (andexpensive) returns forgreater efficiency.

A solution thatbalances CO2reductions andfinancial returns isin this range.

III KEY FINDINGS


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Achieving an energy reduction greater than 38% appears to be cost-prohib


($2,000)

$0

$2,000

$4,000

C o s

t p e r

M e t r i c

T o n o f C

O 2

Cost per Metric Ton of CO2 by Individual Measure

The average cost per ton of carbon dioxide saved for

the first 90% of the savings is -$200/tonwhile theaverage cost per ton for the last 10% is over $300

per ton.

III KEY FINDINGS


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Energy and CO2 savings in the optimal package result from 8 key projects


9% 6%5%

5%5% 3% 3% 2%

0

100,000

200,000

300,000

A n n u a

l E n e r g y

U s e

( k B t u )

T

h o u s a n

d s

Annual Energy Savings by Measure

38%Reduction

III KEY FINDINGS


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Taking the right steps in the right order ensures loads are minimized prior investigating expensive new equipment or controls.


Reduce Loads

Use Efficient Technology

Provide Controls

III KEY FINDINGS


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WINDOWS:Remanufacture existing insulated glass units (IGU) within theEmpire State Buildings approximately 6,500 double-hung windows to includesuspended coated film and gas fill.


III KEY FINDINGS


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RADIATIVE BARRIER:Install more than six-thousand insulated reflectivebarriers behind radiator units located on the perimeter of the building.


III KEY FINDINGS


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TENANT DAYLIGHTING / LIGHTING / PLUGS:This measure involvesreducing lighting power density in tenant spaces, installing dimmable balland photosensors for perimeter spaces, and providing occupants with a pluload occupancy sensor for their personal workstation.


III KEY FINDINGS


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CHILLER PLANT RETROFIT:The chiller plant retrofit project includes theretrofit of four industrial electric chillers in addition to upgrades to controlvariable speed drives, and primary loop bypasses.


III KEY FINDINGS


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VAV AIR HANDLING UNITS:Replace existing constant volume units withvariable air volume units using a new air handling layout (two floor-moununits per floor instead of four ceiling-hung units).


III KEY FINDINGS


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DDC CONTROLS:The measure involves upgrading the existing controlsystems at the Empire State Building.


III KEY FINDINGS


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DEMAND CONTROL VENTILATION:This project involves the installation ofCO2 sensors for control of outside air introduction to chiller water and DXHandling Units.


III KEY FINDINGS


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TENANT ENERGY MANAGEMENT:This project will provide tenants withaccess to online energy and benchmarking information as well as sustainabtips and updates.


III KEY FINDINGS


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Though it is more informative to look at financials for the package of meacapital costs and energy savings were determined for each individual mea


ProjectDescription

ProjectedCapital Cost

2008 CapitalBudget

IncrementalCost

EstimatedAnnualEnergy Savings*

Windows $4.5m $455k $4m $410k

Radiative Barrier $2.7m $0 $2.7m $190k

DDC Controls $7.6m $2m $5.6m $741k

Demand Control Vent Inc. above $0 Inc. above $117k

Chiller Plant Retrofit $5.1m $22.4m -$17.3m $675k

VAV AHUs $47.2m $44.8m $2.4m $702kTenant Day/Lighting/Plugs $24.5m $16.1m $8.4m $941k

Tenant Energy Mgmt. $365k $0 $365k $396k

Power Generation (optional) $15m $7.8m $7m $320k

TOTAL (ex. Power Gen) $106.9m $93.7m $13.2m $4.4m

*Note that energy savings are also incremental to the original capital budget.


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III. KEY FINDINGS



2) Key reductions in peak cooling and electric loads are expected.





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The selected package of measures reduces peak cooling requirements by 3(1600 tons) enabling immediate and future CapEx avoidance.

III. KEY FINDINGS2) Key reductions in peak cooling and electric loads are expected.

NPV Max Package

NPV Mid Package

NPV NeutralPackage

CO2 Max Package-20,000

-10,000

0

10,000

20,000

30,000

40,000

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 N e t

P r e s e n t

V a l u e

( $ )

T h

o u s a n

d s

Reduction in Peak Cooling Capacity

Cost of Cooling Efficiency

The 1600-ton load reduction allows forthe chiller retrofit instead ofreplacement/adding capacity.


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The optimal package of measures also reduces peak electrical demand by MW, benefitting both the building and the utility.

III. KEY FINDINGS2) Key reductions in peak cooling and electric loads are expected.

0

2

4

6

8

10

12

O f f i c e

B u i

l d i n g P e a

k D e m a n

d ( M W )

CurrentPeak

Capacity

Office Building Electrical Capacity

FuturePeak

Capacity

If on-site back-up generation is desired,options include:

Cogeneration; Gas-fired/bio-fuel fired generation; Fuel cells; Renewables (PV/wind); and Purchasing new capacity from Con

Edison


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III. KEY FINDINGS







GS


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This package of measures also results in enhanced indoor environmentalquality and additional amenities for tenants:

III. KEY FINDINGS3) Enhanced work environments are created.

Better thermal comfort resulting from better windows, radiativebarrier, and better controls;

Improved indoor air quality resulting from DCV; and Better lighting conditions that coordinateambient and task lighting.


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III. KEY FINDINGS







III KEY FINDINGS


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This recommended package of measures helps to earn 12 LEED EBOMpoints, an Energy Star score of 90, and a 72% Green Globes score.

III. KEY FINDINGS4) Various green certifications can be achieved.

Package EnergySavings* Energy Star LEEDPoints

GreenGlobes

NPV Max 20% 82 8 64%

NPV Mid 38% 90 12 72%

NPV Neutral 45% 91 13 76%

CO2 Max 48% 92 13 78%

III KEY FINDINGS


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The Empire State Building will be pursuing the Energy Star label as well aGold certification under the LEED for Existing Buildings: Operation &Maintenance Rating System.

III. KEY FINDINGS4) Various green certifications can be achieved.


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IV. IMPLEMENTATION

Clear energy targets and responsible parties must be determined for each the 8 major savings measures to fully maximize the environmental andeconomic benefits.

1) Three stakeholders, with different implementation mechanisms, wdeliver the savings.

2) The project will be financed out of cash flow, though other financopportunities are being investigated.

3) Work has already started and will be complete by 2013 (55% of thsavings will be in place by December 31, 2010).


IV IMPLEMENTATION


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Johnson Controls, the Empire State Building, and Tenants are eachresponsible for delivering some of the total savings.

IV. IMPLEMENTATION1) Three stakeholders, with different implementation mechanisms, will dethe savings.

61%

22%17%

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

Adjusted Baseline JCI ESB Tenant NPV Mid

A n n u a

l E n e r g y

S a v

i n g s

( k B t u )

Energy Savings by Implementation Stakeholder

IV IMPLEMENTATION


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Who implements each project?Project Description Implementer

Windows Johnson Controls

Radiative Barrier Johnson Controls

DDC Controls Johnson Controls

Demand Control Vent Johnson Controls

Chiller Plant Retrofit Johnson Controls

VAV AHUs Empire State Building

Tenant Day/Lighting/Plugs Tenants & Empire State Building

Tenant Energy Mgmt. All

IV. IMPLEMENTATION1) Three stakeholders, with different implementation mechanisms, will delthe savings.

IV IMPLEMENTATION


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Johnson Controls Inc will deliver 61% of the total savings using a performcontract mechanism. Five different performance contracts have a total cos$20 million and guaranteed savings of ~20% percent.


How does the Performance Contract work? 1. ESB pays JCI guaranteed maximum price for capital cost of all

projects2. ESB accrues energy savings as a result of the

retrofit projects if savings are too low,

JCI pays ESB the difference.3. Savings guarantee term is 15 years JCI

61%ESB22%

ESB/Tenants

17%

IV. IMPLEMENTATION


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Empire State Building will deliver 22% of the total available savings as aihandling units and pre-built spaces are replaced over the next 4 years.


JCI61%

ESB22%

ESB/Tenants

17%

IV. IMPLEMENTATION


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ESB is responsible for helping/incentivizing tenants to pay for and achievnearly 20% of the total available energy savings as spaces turnover.


JCI61%ESB

22%

ESB/Tenants

17%

IV. IMPLEMENTATION


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The team has identified 3 programs that will help to reduce and manage teenergy use:


1. Tenant pre-built program: The proposed green pre-built design will save $0.7- $0.90/sq. ft. in operating costs annually for an additional cost of $6/sq. ft. ahelp ESB demonstrate design principles for all tenants to endorse.

2. Tenant design guidelines: Design guidelines, based on the pre-built program,will provide green ESB standards. Tenants can verify the economic validity orecommendations by accessing the eQUEST model or tenant financial tool.

3. Tenant energy management program: ESB will begin sub-metering all tenantspaces and manage a feedback/reporting tool to inform tenants about theirenergy use. This program will also assist tenants with their own carbon reporefforts.


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IV. IMPLEMENTATION






IV. IMPLEMENTATION


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The additional $13.2 million required for energy efficiency projects will bfor out of cash flow.

V. O2) The project will be financed out of cash flow, though other financingopportunities are being investigated.

0

20

40

60

80

100

120

T o t a l E S B C a p i

t a l B u d g e

t ( m

i l l i o n

$ )

Capital Budget Adjustments for Energy Efficiency Projects

2008Capital

Budget forEnergy-

RelatedProjects =$93m+ 0%

EnergySavings

Sum of adds /changes / deletes

= +$13m

New CapitalBudget w /EfficiencyProjects =

$106m+ 38% Energy

Savings


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IV. IMPLEMENTATION






IV IMPLEMENTATION


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The projects to be implemented via the Johnson Controls performance conwill be complete by October 2010. The remaining projects will be compleDecember 2013.

IV. IMPLEMENTATION3) Work has already started and will be complete by 2013.

April2009

October2010

December2013

Chiller Plant Retrofit Finalengineering &subcontractor

awards

DDC Controls

Demand Control Ventilation

Windows

Radiators

AHU replacement

Tenant Energy Management

Tenant Lighting, Daylighting, Plugs


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V. LESSONS LEARNED

Key lessons learned for the retrofit of large commercial office buildingsinclude:

1) The maximum cost-effective savings are achieved by:

a) Taking a whole-systems, dynamic, life-cycle approach;b) Coordinating projects with equipment replacement cycles; andc) Addressing tenant spaces.

2) At a certain point, there is tension between CO2 savings andbusiness value (even with anticipated CO2 regulations).

3) The process can and must be streamlined.


V LESSONS LEARNED


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A. Teams must take a whole-systems, dynamic, life-cycle approach.

V. LESSONS LEARNED1) Several approaches help maximize cost-effective savings.

Reduce Loads

Use EfficientTechnology

Provide Controls

Capital Cost

Utility Savings

Utility Rebates

Tax Implications

O&M Impacts

Escalation Assumptions

Discount Rate

Future Cost of CO2

Tenant Utility Structure

V LESSONS LEARNED


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B. Projects are most cost-effective when coordinated with equipmentreplacement cycles.


($100,000,000)

($80,000,000)

($60,000,000)

($40,000,000)

($20,000,000)

$0

$20,000,000

$40,000,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

N e t

P r e s e n t

V a l u e o f

P a c

k a g e o f

M e a s u r e s



IncrementalCapEx

AbsoluteCapEx

V LESSONS LEARNED


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C. More than half the savings exist within tenant spaces dont ignore them!

Balance of DDC

Retrofit Chiller

Tenant Daylighting/Lighting/Plugs

VAV AHU's

Bldg Windows

Tenant EnergyManagement

Radiative Barrier Tenant DCV

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

Measures that only affect the Base Building Measures within Tenant Space

A n n u a l

E n e r g y

S a v

i n g s

( k B t u )

Energy Savings: Base Building vs. within Tenant Space


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V. LESSONS LEARNED


1) The maximum cost-effective savings are achieved by:a) Taking a whole-systems, dynamic, life-cycle approach;b) Coordinating projects with equipment replacement cycles; andc) Addressing tenant spaces.




V LESSONS LEARNED


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V. LESSONS LEARNED2) At a certain point, there is tension between CO2 savings and business v

Maximizing business value leaves considerable CO2 on the table.

20%

19%

7%3%

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

Adjusted Baseline NPV Max NPV Mid NPV Neutral CO2 Max Year 15

A n n u a l

E n e r g y

C o s

t i n

D o l

l a r s

Energy Cost Savings by Package

Choice package to

maximize NPV.

V LESSONS LEARNED


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Attempting to save CO2 faster may be cost prohibitive.

NPV Mid

NPV Mid Acclerated

($40,000,000)

($30,000,000)

($20,000,000)

($10,000,000)

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

N e t

P r e s e n t

V a l u e o f

P a c

k a g e o f

M e a s u r e s



Acceleration reduces theNPV as projects become

out of sync withreplacement cycles

V LESSONS LEARNED


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Anticipated CO2 regulation in the U.S. doesnt change the solution set though European levels of regulation would.

($30,000,000)

($20,000,000)

($10,000,000)

$0

$10,000,000

$20,000,000

$30,000,000$40,000,000

$50,000,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

N P V ( $ )

Cumulative CO2 Savings (Metric Tons)

15-Yr NPV and Cumulative CO2 Savings at Fluctuating Carbon Costs

No Regulation .33% CA: Low Carbon Economy Act1.34%: RGGI 2% CA: Lieberman Warner

8.8% CA: EU OTC


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V. LESSONS LEARNED


1) The maximum cost-effective savings are achieved by:a) Taking a whole-systems, dynamic, life-cycle approach;b) Coordinating projects with equipment replacement cycles; andc) Addressing tenant spaces.




V LESSONS LEARNED


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V. LESSONS LEARNED3) The process can and must be streamlined.

Several opportunities to reduce the time and cost of the project developmprocess exist.

Project DevelopmentTime

Improved Process Apply Insights Improved Tools Optimized ProjectDevelopment Time

T i m e a n

d C o s

t s

Opportunities to Improve Project Development Process

Reduction intime and costs?


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VI. INDUSTRY NEEDS

This project was a great test lab, but what now? If all buildings need to beretrofitted to profitably reduce greenhouse gas emissions by 75% by 2050we have a lot of work to do in a short amount of time.


Opportunity Areas: Residential, Commercial, Industrial

Barriers: What is preventing us from reaching our goal?

Outcome: 75% Reduction by 2050

Strategies: What is the most impactful way to overcome barriers?

Coordination: Who is working on what and what can you do?

VI INDUSTRY NEEDS


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Project

Origin

Project

Development

Construction &

Commissioning

Financing&

Contracting

Measurement

& Verification

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VI. INDUSTRY NEEDS

Barriers exist in each phase of the retrofit process. Below are the major bathis team believes are paramount to overcome in order to reach our 2050

Retrofit Project Phases

c. Projectdevelopmentanalysis tools

c. Policye. Engineering

capacityf. Cost of

measures

g. Financing(base buildingand tenant)

h. Performance-based designandconstructioncontracts

TBD TBDa. Selecting theright buildingsfor whole-systemsretrofits

b. Developingsolutions forall buildingtypes

VI. INDUSTRY NEEDS


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VI. INDUSTRY NEEDSa) Select the right buildings for whole-systems retrofits

Retrofitting the right buildings in the right order can reduce the societal c($/metric ton) for carbon abatement.

1

3

2

4

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VI. INDUSTRY NEEDSb) Develop solutions for small to mid-range commercial buildings.

Most retrofit or energy service companies only address large commercialbuildings or residential buildings. Yet 95% of the U.S. building stock is smmid-sized buildings that consume 44% of total energy use.

Source: EIA data

VI. INDUSTRY NEEDS


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VI. INDUSTRY NEEDSc) Develop better project development tools.

Significant time was spent creating the energy and financial models for thbuilding and then iterating between them. Quicker and simpler tools coulaccelerate the process.

VI. INDUSTRY NEEDS


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d) Use policy and regulation to incentivize deeper savings and to make theprocess cheaper and more transparent.

Federal stimulus money, city or state mandated retrofits, and more sharedon opportunities and performance will make retrofits faster and cheaper.

Source: Recovery.gov

MAYOR BLOOMBERGAND SPEAKER QUINN

ANNOUNCE MAJORPACKAGE OFLEGISLATION TOCREATE GREENER,

GREATER BUILDINGSPLAN FOR NEW YORKCITY

VI. INDUSTRY NEEDS


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e) Increase workforce capacity of whole-systems trained auditors, engineeroperators, and commissioning agents.

There is a lack of American engineers who are trained and ready to rebuilefficient buildings, cities, and cars.

Source: RAND Issue paper - http://www.rand.org/pubs/issue_papers/IP241/IP241.pdf

Science &Engineering

There is no negawatt university Amory Lovins

VI. INDUSTRY NEEDSf ff


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f) Determine how to make efficiency measures and renewable energytechnologies more cost-effective.

Value-chain analyses can help determine opportunities for cost reductionstechnologies that can save significant amounts of energy.

Additional controls; Easy to install methods to retrofit exterior wall systems to increase thermal

resistance; LED lighting; DALI lighting controls; Chilled beam systems; Heat recovery systems;

Green roofs; Rainwater collection; Condenser water savings; Dessicant systems; and Even higher performance windows.

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g) Determine solutions for both base building and tenant financing.

Availability of capital is a major hurdle and a variety of innovative solutiowork for large, small, owner-occupied, and leased spaces is needed.

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h) Standardize (and use) performance-based design and construction contra

Design and engineering parties are often incentivized by different outcomthus deterring the group from optimizing energy efficiency.

Get paid for what you save, not what you spend.

CONCLUSION


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CONCLUSION


There is a compelling need as well as an economic casefor reducing greenhouse gas emissions in existing

buildings. The Empire State Building case study providesan example of how this can be done. However, significantchallenges remain that must be addressed in order to

quickly and cost-effectively capture the full greenhousegas reduction opportunity for building retrofits on a

widespread basis.

For more information please contact:


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Rocky Mountain Institute

For more information, please contact:

Kathy Baczko

Clinton Climate InitiativeNew York City Director +1 646 981 [email protected]

Anthony E. MalkinEmpire State BuildingOwner

Iain Campbell

Johnson Controls, Inc.VP & GM, NA Solutions, Building Efficiency+1 414 524 [email protected]

Ray QuartararoJones Lang LaSalleNortheast Regional Manager, International Director +1 212 812 [email protected]

Amory LovinsRocky Mountain InstituteChief Scientist+1 970 927 [email protected]

More project information available at:www.esbsustainability.com

Esb Overview Deck

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