From New York to San Francisco, a new type of building is emerging that is not only energy efficient, but can actually interact with the power grid in real time. These grid-interactive efficient buildings, or grid-interactive efficient buildings, represent the cutting edge of sustainable real estate, promising lower energy costs, increased resilience, and reduced environmental impact.
The real estate industry is at a critical crossroads, facing challenges from rising energy demand and associated greenhouse gas emissions, as well as the growing threat of climate disasters.
According to the World Green Building Council, buildings currently account for 39% of global emissions, and trillions of dollars worth of real estate assets are at risk from climate-related disasters. At the same time, utility companies are struggling to expand infrastructure to meet increased energy demands due to economic growth and development, as well as unprecedented extreme temperatures resulting in higher than usual utility bills and devastating power outages. Now more than ever, it is critical that the industry progresses toward net-zero emissions and resilience.
From grid-interactive equipment and controls to community microgrids, owners, developers, and even utility providers stand to benefit from the steady integration of buildings into the larger utility grid system. In 2017, market research firm IHS Markit estimated that the number of Internet of Things (IoT) devices worldwide will reach a staggering 125 billion by 2030. Amazingly, as of 2017, an estimated 822 million IoT devices had already been installed in homes worldwide. These connected devices are being leveraged to make buildings more comfortable, adaptable, and efficient. These devices enable automation and intelligent control of various building systems, including heating, ventilation, air conditioning, lighting, and security, leading to improved occupant experience and resource management.
In addition to integrating connected devices into building systems, we are seeing steady growth and adoption of on-site energy generation and community-scale microgrids. According to Wood Mackenzie, in the third quarter of 2022, microgrids produced more than 10 gigawatts of power from industrial and commercial activities.
Earlier this year, ULI released Get Smart, a report focused on identifying grid interoperability and energy efficiency measures and creating a business case for implementation. By constructing and retrofitting buildings to be more resilient, responsive, and energy efficient, both real estate sector stakeholders and utilities can realize a range of benefits, from reduced carbon and utility costs to improved business continuity, resilience, occupant comfort, and asset survivability. NOAA is forecasting a particularly hot summer with increased hurricane activity, leaving stakeholders with renewed concerns about utility costs, carbon emissions, and business continuity.
“The utilities sector is undergoing a remarkable transformation as power companies look to decarbonize existing grids while building the equivalent of one or two more. [facilities] “Electrification and industrial growth need to be considered. As a result of this challenge, utilities are increasingly willing to partner with the real estate sector to address the demand for electrification,” said Jake Elder, vice president at Energy Impact Partners.
The drivers for grid-interactive, efficient buildings are manifold. New smart building technologies have enabled a level of energy optimization unimaginable just a decade ago through intelligent HVAC controls, lighting automation, and energy dashboards with portfolio-wide visibility. At the same time, strengthening climate policies and environmental regulations are pushing the real estate industry to significantly reduce carbon emissions and future-proof assets against sustainability risks.
“The ability to program a building’s energy use to maximize electricity generated at zero carbon emission sources will help us reduce carbon emissions from electricity consumption (Scope 2) and progress toward achieving our net zero carbon goal,” said Tim Hewer, director of energy and sustainability at Brookfield Properties.
On the utility side, grid-interactive efficient buildings offer a compelling solution to the increasing strain on the grid due to electrification trends such as EV charging, appliance conversion, etc. By enabling automated demand response where buildings temporarily shed non-essential loads during peak times, grid-interactive efficient buildings can alleviate bottlenecks and realize significant cost savings.
A recent U.S. Department of Energy study estimated that implementing GEB capabilities nationwide could save between $8 billion and $18 billion annually in energy infrastructure spending by 2030.
A prime example of a grid-interactive efficient building
Though still an emerging field, several high-profile real estate projects are demonstrating the potential of grid-interactive buildings.
Rockefeller Center (New York): After an extensive energy retrofit, this iconic Manhattan complex now boasts 8 megawatt-hours of battery storage and a 5.6 million-gallon chilled water storage tank. The hybrid heat/battery system automatically sheds peak load while providing backup power to maintain operations during grid outages, enhancing both cost savings and resiliency.
1 Manhattan West (New York): As part of a more than $500 million construction technology pilot program, Brookfield Properties has embedded smart sensors and intelligent controls throughout this 2.1 million-square-foot mixed-use development. An advanced building analytics platform utilizes a digital twin (a real-time virtual replica) to optimize operations while seamlessly integrating distributed energy resources like rooftop solar and battery storage.
Future outlook
According to industry analysts, the adoption of grid-tied, efficient buildings is expected to grow rapidly as the world becomes more electrified and the effects of climate change intensify. In addition to the attractive economic benefits, policies such as the Anti-Inflation Act are expected to provide strong financial incentives for investment in these types of sustainable buildings.
Grid-interactive efficient buildings are a key element of decarbonization because they enable flexible demand, improve the use of clean renewable energy, and reduce utility bills while providing high-performing, comfortable, and resilient commercial and residential environments. By 2030, we can save hundreds of billions of dollars in power system costs, reduce carbon emissions, and reduce grid stress,” said Mary Ann Piette, Associate Lab Director, Energy Technologies Area, Lawrence Berkeley National Laboratory.
