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Each year, U.S. commercial buildings waste about $60 billion in energy, according to the Department of Energy (DOE). That's about 30 percent of the total U.S. spend of $200 billion. With the goal of reducing that waste in mind, as well as overcoming entrenched barriers to energy efficiency, President Obama and former President Clinton, along with 60 initial participants, announced the Better Buildings Challenge on Dec. 2, 2011. The Challenge is a part of the President's Better Buildings Initiative — announced in February 2011 — which encourages organizations to reduce their buildings' energy use 20 percent by 2020. The initial participants of the Better Buildings Challenge, which together are responsible for 1.6 billion square feet of space, signed a formal agreement to complete that reduction. The agreement comes with a bit of homework, but a number of benefits, as well.
First, the participants — which include a variety of types of organizations, including real estate investment managers, property managers, hotel chains, cities, states, and colleges and universities — agree to make their energy data public: They must report every six months. DOE will post that data on its website once a year. Each participant also must designate a "showcase project" that best illustrates that organization's commitment to energy efficiency. As an example, Bob Holesko, vice president of facilities, HEI Hotels, says his organization has selected a Marriott in La Jolla, Calif., as its showcase project. The reason, says Holesko, is that the property was recently purchased, and therefore has several opportunities to undergo energy efficiency upgrades. Holesko will report on the progress of these upgrades and how much energy they saved as part of HEI's Better Buildings Challenge commitment.
Finally, each participant must submit an "implementation model" — which is basically a description of a best practice. For instance, HEI's implementation model will be its Energy Looking Glass dashboard — the system by which the organization keeps track of its energy use at all its properties. DOE will collect these implementation models and make them available to the public, giving everyone the opportunity to benefit from these efficiency leaders.
"There remain barriers that stop energy efficiency from taking a ground hold," says Maria Vargas, the Better Building Challenge's director. "The Better Buildings Challenge asks its partners to really step up to be leaders in the marketplace. They must make a portfoliowide commitment, and they must be transparent by explaining their own barriers and how they overcame them."
So, in essence, in addition to combating the sheer volume of energy waste, the main goal of the Better Buildings Challenge is to be rising tide that raises all ships.
"We want to make it the case that not everyone has to start at square one," says Vargas. "We want other organizations to follow what the leaders have done."
The original participants were hand-selected because of a demonstrated commitment to and high sophistication in energy efficiency — Energy Star Partners of Year and Sustained Excellence Award winners, for instance. But each still had to accept the invitation and formally take on the challenge. For most, it was a no-brainer. "Well, we never get tired of winning awards and being recognized, and we wanted to be part of the next evolution of energy efficiency," says Holesko, citing the main reason his organization — and many others — accepted the challenge. Holesko says he also had the privilege of walking into his CEO's office and passing word that the CEO was invited to a meeting with President Obama. Talk about a good way to get upper management's attention, Holesko says.
But the benefits go well beyond public relations value. For instance, RREEF Real Estate, the real estate investment management arm of Deutsche Bank's asset management division, views the Better Buildings Challenge as a vehicle to help standardize energy best practices and analytics over a quickly changing, diverse portfolio. "For a variety of reasons, reporting on energy efficiency performance, particularly over a long hold period, is a challenge for any real estate investment manager," says Patricia Connolly, RREEF Real Estate's global sustainability director.
Those reasons, according to Connolly, include the fact that the portfolio includes many different types of energy management and building automation systems within buildings the organization owns, fragmentation of third-party property management best practices, office use and behavior of tenants, and the traditional restrictions some utilities place on sharing data.
Department of Energy: Goal of Better Buildings Challenge is to Cut Down on $60 Billion in Wasted Energy