Unlocking energy savings: A comprehensive energy management guide for commercial real estate professionals

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Commercial building with trees and glass windows suitable for energy efficiency in New York.

Overview

In a year marked by limited capital, a flight to quality by tenants, surging regulations, and unprecedented climate events, energy efficiency should be front and center for any commercial real estate professional. By making energy management a priority, you can enhance operational efficiency, cut energy use, and drive sustainability progress.

Energy management programs have traditionally centered on data reporting. As investors, tenants, and regulators push for more tangible and demonstrable progress, you must move from reporting on data to acting on it. A meaningful and effective energy strategy brings together data, processes, and people in a system of truth that drives action.

A framework to build your energy management program around is the Pacific Northwest National Laboratory’s Building Re-tuningTM. Re-tuning is a systemic process aimed at optimizing the energy performance of existing buildings at no-cost or low-cost. 

In this guide, you’ll learn what energy management is, discover how to use Re-tuning to optimize operational energy use, and understand if your building is a good candidate for Re-tuning.

Whether you’re just starting to create a strategy or you’ve taken some swings at energy management in the past, it’s worth sticking around. “But why?” I hear you ask.

Well, aside from sharing our knowledge based on partnering with Class A & B office buildings across the country, we’ve also broken down Re-tuning best practices, which can decrease energy usage by 5% to 25%.

Keep on reading to understand energy management or jump ahead to the section that interests you most.

The basics

What’s the importance of optimizing energy consumption?

Four core components of a strong energy optimization strategy

Is your building ready for an energy tune-up?

The bottom line

The basics

What’s energy management?

Energy management is the process of tracking and reducing your energy usage.

According to Energy Star, it involves "Measuring and tracking energy use, identifying opportunities for improvement, taking action to save energy, and verifying savings." 

When asked to explain what energy management is, we often choose to call it a strategy to monitor, control, and conserve your daily energy use. 

In this article, we focus on reducing operational energy use rather than on capex-heavy strategies that rely on structural changes like improving insulation or replacing large equipment or lighting systems

Before diving deeper into energy management, let’s establish a shared understanding and language around terms you need to know to operate your buildings efficiently and cost-effectively.

Energy loads

Energy loads are how much energy your building needs for a given timeframe. Various energy commodities can meet these demands. The most common ones used in commercial office buildings are: electricity, natural gas, district steam, district chilled water, and fuel oil.

Your base load is the electrical demand that occurs when the property is unoccupied, generally at night. This is energy that factors like HVAC systems, which continue running even when the building isn’t occupied, are consuming around the clock.

You’ll likely hear more about your peak load. The peak load represents the maximum energy demand your building draws from the grid. Many electric utilities charge customers for the peak load in addition to their consumption. Peak load management is critical to avoid unexpectedly high bills.  

Load profiles

Your load profile is a graph that shows your energy usage over daily, seasonal, or yearly periods. By analyzing this graph, you can observe fluctuations in electricity consumption, recognize recurring trends, pinpoint opportunities for optimization, and assess the impact of operations on energy costs in the context of peak demand and time-of-use (TOU) charges.

Building re-tuning

Building re-tuning is a process that helps minimize building energy consumption by identifying and correcting operational problems that affect buildings, typically at no or low cost. These cost-effective enhancements ultimately boost energy efficiency, reduce operating expenses, lower greenhouse gas emissions, and improve tenant comfort.

What’s the importance of optimizing energy consumption?

Energy efficiency not only cuts down on energy costs, usage, and emissions but also positions your organization to make real strides towards achieving your ESG goals. 

According to the 2023 GRESB Real Estate Assessment results, many office portfolios are struggling to translate net zero policies into actionable commitments. 

Meanwhile, the demand for reporting on carbon targets from investors is on the rise. 73% of REITs reported on carbon targets in 2022 and 83% reported on sustainability goals.

And JLL found that there was a growing demand for sustainable buildings and they realized a green premium of 7.1% in North America. 

While firms often rely on their building engineers’ inquisitiveness, innate drive, and deep commitment to achieving better results to drive operational efficiency, it’s not enough. 

According to the Carbon Risk Real Estate Monitor (CRREM) and the Global Real Estate Sustainability Benchmark (GRESB), only 15% of global assets currently align with the Paris Agreement’s 1.5°C target. We need to empower these teams–who have their hands on the steering wheel–with the tools and strategies to drive consistent, data-driven efforts across your portfolio. 

The difference between building management systems (BMS) and energy management systems (EMS)

Up to 20% of the energy consumption used in commercial buildings is wasted because of improper operations. According to the Wall Street Journal, “Wastefulness is often caused by crude building operating systems that set the heating or cooling facilities to come on and off at a specific time each day, regardless of the outside air temperature or how many people are using the building.”

Although the capabilities of BMSs have increased in recent years, there’s tremendous room to amplify the impact of the BMS by adding a layer of intelligence with an EMS

What’s the difference between the two types of platforms?

BMSEMS
Manages a wide range of building systems and equipment.Ingests the data from the BMS and other systems to provide deep insights into the building’s current energy consumption patterns.
Can often configure startup and shutdown sequences. These sequences don’t typically reflect real-time data and can be difficult to adjust without coding knowledge.Analyzes real-time data to provide operating engineers with specific, actionable recommendations.
Data can be unwieldy and is often contained to a computer in the basement.Data is intuitive and available on the device the user has on hand – phone, tablet, or computer.

Using an EMS like Cortex together with the BMS allows you to move from basic energy monitoring to an energy optimization strategy that helps you run your buildings better.

“Cortex is probably the cheap, easy, actionable first step that every building owner should use to reduce their carbon footprint,” says Nick Bienstock, CEO and Co-Founder of Savanna Fund. Read Savanna’s full story here.

Four core components of strong energy optimization strategy

To actively manage energy in your buildings, your engineering teams need to identify and correct operational problems that lead to energy waste. An energy management system can help you realize 5% – 25% energy savings offered by Building Re-tuning. These are the four principles to the strategy:

Figure 1. Breakdown of energy savings based on four Building Re-tuning™ principles based on PNNL’s site visits at GSA facilities.

Turn It Off

Turning it off is an obvious starting point, but it’s an area where many organizations can still make significant savings. Identifying energy systems that are operating when they aren’t required can drive up to 30% of the total savings available without impacting tenant comfort. 

Specific measures that can be deployed include:

Conserve energy by reducing use in unoccupied or under-occupied parts of the building. Consider, for example, a building that supports a hybrid workforce. There may be high occupancy, based on badge swipes or blob tracking, on Tuesday, Wednesday, and Thursday but limited occupancy on Fridays. Or, lease obligations may ask for the building to be conditioned until 1:00pm on Saturdays, but there’s only been a handful of days in the last year that someone has been in the office. 

Understanding your energy trends, load profiles, and occupancy, along with alerts for equipment that’s left running overnight, can help you understand when energy is needed and when you can turn systems off. 

Scheduling your HVAC system so it’s only on when needed can account for up to a 1.5% decrease in annual energy usage and costs.

How do you decide when to start your building each morning? Between lease obligations, outside air temperatures, peak hours, your building’s heating capacity, and more, identifying the optimal start time can be complex. Whether start time is defined by the BMS or by your engineering team’s deep experience and knowledge of the building, it’s likely they’re taking a conservative approach. Teams are more likely to bring buildings to temperature hours before lease obligations than risk tenant complaints. 

AI and machine learning that takes into account all the variables for startup in real time as they relate to your specific building, allow more aggressive start times that can result in significant energy savings.

“Cortex makes my job easier by providing start times, which saves money for ownership,” says Mark Trio, Chief Building Engineer at 5 Bryant Park, “and it gives us the information and the tools needed to make educated decisions on a daily basis.” Read Savanna’s full case study here.

We worked with another team that was able to delay their start time, on average, by 2.5 hours per day with Cortex’s recommendations. It’s no wonder this strategy accounts for 1.1% of potential savings.

Turn It Down

If you don’t need it at full capacity, turn it down. Adjusting systems to meet current needs can account for up to 28% of energy savings available under Re-tuning. 

Concrete actions that can be taken include:

Static pressure reset orchestrates the airflow within a building’s air system to seamlessly adapt to varying demands. By strategically adjusting the static pressure setpoint during typical operating conditions, without compromising airflow to individual VAV boxes, substantial energy savings of two to three times the reduction in fan speed can be achieved. 

Insight into how your VAVs are performing and exception reporting, allows your engineering team to proactively bring VAVs back into ideal operating range. And when they combine this with Duct Static Pressure (DSP) recommendations for seasonal setpoints or DSP reset programming, they can run the building according to what’s needed at any given time.

This meticulous management of airflow can add up to big energy savings–1.5% per year–while making sure occupant comfort remains paramount.

Night setback is an energy savings strategy that allows temperature or humidity settings (or both) to drift during times that the building is unoccupied. While there isn’t a magic setback number–a floor temperature heat map can help track and verify changing temperatures, while an overnight shutoff report provides insight into whether equipment is running at unexpected times.

Adjusting temperatures during unoccupied periods means your HVAC system doesn’t need to work so hard when there’s no one there, saving 0.9% in energy and costs without sacrificing comfort.

Mitigate Simultaneous Heating and Cooling

Avoiding simultaneous heating and cooling prevents the HVAC system from overcooling a zone and then heating back to the correct temperature. This can account for as much as 32% of savings under the Re-tuning strategy.  

Actions that can be taken include:

Supply air temperature reset or discharge air temperature reset is when the supply or discharge air temperature is reset to be higher at times when zone reheating is significant. When reheating isn’t significant, this reset allows for the same amount of cooling energy with less airflow. That means less fan power and more energy savings. This can account for 1.6% of energy savings. 

Reducing the minimum airflow setpoints keeps the system from forcing too much cool air into the zones. This keeps the VAV from overcooling and reheating and saves on cooling and reheating costs. This accounts for 1.3% of overall energy savings.

Reduce Infiltration and Outdoor Air

Reducing infiltration of outdoor air can prevent the outdoor temperature from increasing or decreasing the indoor temperature and reduce heating and cooling needs. However, outdoor air can be intentionally used to cool the building without the use of mechanical cooling in what is commonly called ‘airside economization’ or ‘free cooling’. Through proper control of outdoor air rates, this can happen automatically when the conditions for ‘free cooling’ are right.”

This requires many small adjustments, which you can see the individual list and impact of here in. This accounts for only 10% of energy savings. 

The strategies outlined are just the starting point to energy management through Re-tuning. This graph outlines the many possible strategies you can follow.

Figure 2. Breakdown of energy savings totaling 13.4%, based on typical Re-tuning measures applied at GSA facilities (PNNL’s Building Re-tuning™ site visits).

If you or someone on your team wants to take a deeper dive, here are some resources that get you started:

Is your building ready for an energy tune-up?

Not every building reaps the same rewards from an energy tune-up. Use this short checklist to determine if your building is primed for an efficiency boost.

Top candidates for re-tuning are:

  • Buildings larger than 50,000 SQFT
  • Buildings with an Energy Star score of less than 75

Best-suited buildings have:

  • Variable air volume systems
  • Heat recovery systems
  • Central heating and/or cooling plants
  • BMS installed after the year 2000

For optimal results, you should have access to:

  • The current sequence of operations
  • Interval-metered data
  • BMS trend data
  • Monthly utility bills

Want to look into it further? Review the complete building checklist here.

The bottom line

Operational excellence is a powerful strategy for CRE owners and managers to tackle their ESG targets. By using AI-driven EMS solutions to effectively implement Re-tuning strategies, buildings can meaningfully cut energy use a low- or no-cost. With federal decarbonization goals in place, such as aiming for a 65 percent reduction in GHG emissions by 2035 and a 90 percent reduction by 2050, now is the time for CRE teams rethink their operations.

For more information on how to move forward with your energy management program and deliver on your sustainability strategy, contact our experts to learn more about our energy insights platform.

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