Carbon Reduction in the Built Environment: Move Quickly!
March 16, 2024
The world is rapidly moving toward minimizing energy consumption to conserve resources, preserve our environment, and reduce costs. This trend is especially true in the university real estate environment. British Columbia-based Sustainable Projects Group (SPG) is a trailblazer in the sustainable energy management and energy efficiency industry, working with all real estate owners, including higher education and student housing.
SHURE Initiative caught up with SPG's President and Founder, Tayber Yastremski, who says he was born into the world of energy and sustainability, growing up in a household of entrepreneurs and clean energy innovators. Tayber earned his Masters of Engineering in Clean Energy Engineering, holds a CEM and EP designation, is the president of the Association of Energy Engineers (AEE) Metro Vancouver chapter, the past president of the AEE Alberta Chapter, was awarded the Directors Inspirational Award by the Provincial government, and was awarded as one of Canada's Clean50 for 2023. The
With significant reform underway in Canada relative to carbon reduction in the built environment, Tayber shared insight for university stakeholders and private sector multifamily and student housing developers.
Tayber tells The SHURE Initiative that changes are coming fast and furious.
Overview of the Built Environment, ESG, and Canadian Regulatory Landscape
When it comes to ESG and building strategy, if you need to move faster, you should be. Things are changing incredibly quickly, and you need to keep up.
The Canadian government has set many GHG targets. There was the Kyoto Protocol—Canada set targets, but we missed them significantly. The Copenhagen Accord came along—we set a new target again but missed it significantly. Then, in 2015, we had the Paris accord.
We have new GHG targets, but this time, Canada's put its money where its mouth is and intends to hit those targets. We are far from hitting them, but the Federal Government is changing its policies quickly to reduce GHG emissions through incentives or taxation and policy.
Things are changing quickly, and you need to be keeping up. One of the main reasons this impacts the folks we work with is stranded assets. What's happening with many of these multi-unit residential buildings is that an asset gets stranded when you no longer meet the policies or requirements required to keep this building in operation. Even worse, the energy costs have gotten so high that the building is no longer a performing asset for you.
We have clients in the UK who have spent over eight times the amount of energy operating their buildings than they had planned. If you think about your utility costs for your building, imagine something that happened, and you would now be spending 8x that.
You collect information, hire a consultant, and implement a strategy to prevent those buildings from becoming stranded.
Many people need to realize that the underlying math, the modeling that's happening to help you set that strategy, needs to be revised. And what I mean by that is we've done this manually. We've done capital planning for billions of dollars worth of assets and see a common theme: how projects should be completed and executed in a specific order. And what's happened must accurately represent what should be happening. It needs to price the carbon tax implications correctly and adequately look at some government funding and programs. As a result, the wrong projects are being prioritized.
The best example is if you have non-dimmable TLED tubes in your building or if that's been part of your strategy. That's an indicator for us that the strategy is built on that old math and that old framework. In the big picture, TLEDs are a waste of money. It would help if you did other things to reach your end target in that building.
It's a good payback. You get savings from it. They are a good investment from a small short-term investment standpoint, but they prevent you from achieving your end goal; we call it a technology cul-de-sac. Obviously with our team, that's one of the things we focus on. We do that underlying modeling so that you can put a proper strategy and a plan in place. Because things are changing quickly, you must have that information in your strategy. Your strategy must update as fast as technology and policies change.
There's a lot of funding and programs out there. For universities and colleges, for example, we've got an application from the federal government to help get much of the data I am describing. It helps build those strategies and updates constantly; it's not something you set and review once a year. That's the built environment. That's the basis of what we're seeing right now.
Cost Analysis Based on Building Typology
What are we seeing cost-wise to get to net zero, and what are some new technologies? Are we finding an increased cost, or where does that strand you?
The most considerable variability comes from project typology. We find smaller projects have a more flexible approach but less attractive financial metrics, whereas, in multi-unit residential, it's a lot easier to hit those performance targets. The systems are more straightforward. We're seeing a cost difference depending on the building typology.
And I would say with something like multi-unit residential, one of the more significant cost challenges is going to 100 percent electrification, really looking closely at operational versus embodied carbon, and understanding how do we, for example, with domestic hot water, how do we go 100% electrification without adding huge operational costs?
So we've been looking at things like air source heat pumps, which have a high capital cost but can bring our operational cost down significantly.
Proper Modeling
And that's where it rolls in with the built environment: If you do the proper modeling, many projects are implemented, reducing the overall operating costs.
Most of the time, everybody looks for paybacks or positive net present values in the projects they identify. So technically, yes, there are upfront costs to implement these things. But as an organization, you are making money off of them.
Up to about 40 percent of GHG reduction projects and technologies, as they are implemented, an organization still gains as a whole, and there is a positive NPV.
Net present value means that if you look across the project's life, are you coming out ahead or behind on that investment?
Start your ESG project with the Building Envelope
The problem we're finding from the built environment space is that, with most folks, the technology is already there. We've been in the construction industry for over 20 years. The challenge is getting it approved and implemented. And what we're finding is that most folks need to do it in a different order.
Think about your building envelope relative to your heating plant. It would be best if you did the building envelope upgrades to reduce the demand before you replace that heating plant so that you can put in a more minor heating system. These things must be done correctly because everyone is taking a list of projects, looking at the simple technology, and then prioritizing based on payback. And as a result, they're doing things that we need to come along and rip out 2 or 3 years later because they made the wrong choice.
Concluding Thoughts & the Importance of Data Analytics
When I say tech, I'm talking about how we get that dynamic model in place. That has the most significant impact on how the design rolls out because if we've got the proper information, we'll typically come up with a different set of projects.
The technology changes the order in which things are implemented so that we can reduce overall costs and hit those GHG targets.
When the math is wrong, the consultant's recommendations are also incorrect. The consultant then makes improper recommendations to the building owners, capital planners, and people who own these assets, and as a result, people need to do the right projects.
The biggest takeaway from this is to ensure you understand that things have been moving quickly and will continue to move quickly. So, if you don't have that data analytics backing you and helping drive that strategy, you will get further behind. The sooner you get on board and get that sorted out, the easier life will be. We've seen this over the last decade with groups that have kicked and screamed to get that information, but now they've got it and are in a much better position.
Related SHURE Initiative Event: SHURE: VANCOUVER & WESTERN CANADA | March 26-27, 2024 Simon Fraser University, Burnaby, British Columbia
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