ULI: Electrification Key to Decarbonizing Building Sector
(Wind generators on the Virginia coast. Photo courtesy Dominion Energy.)
The Urban Land Institute, Washington, D.C., said the commercial real estate industry can shift to a decarbonized future by moving to all-electric buildings.
A new ULI report, Electrify: The Movement to All-Electric Real Estate said real estate firms should know about the electrification movement. “Although widespread adoption of all-electric assets is not anticipated for at least five to 10 years, the movement toward electrification and away from fossil fuel combustion in buildings is well underway,” the report said. “Many real estate owners and developers have already begun factoring the coming building electrification boom into their bottom line and strategizing about how it may affect their properties.”
The report called electrification “a key strategy for decarbonizing the building sector” and said it offers notable health and safety benefits in addition to financial benefits.
“Cities across the U.S. are increasingly setting carbon emissions reductions goals and passing fossil fuel bans, and more tenants demand sustainable spaces,” said Emily Pierce, Director for ULI’s Greenprint Center for Building Performance. “How a commercial real estate asset is powered, whether by fossil fuels or electricity, is no longer a niche question that only sustainability experts are considering.”
Pierce said the report examines the technology that goes into an “electric asset” and provides examples of how to get there with strategies real estate firms can start employing now.
The report looks at construction type (new or retrofit), asset classification, climate zone and utility fuel source availability (natural gas, coal, electricity, or renewable energy), but noted many benefits of electrification can be applied widely across commercial real estate:
—Financial benefits: An all-electric building can provide significant cost savings both during development and operations. The Building Decarbonization Coalition said gas distribution system expenditures tripled between 2009 and 2017 to $14.9 billion per year, which in turn affect the costs of construction. “Beyond the direct cost savings of avoided gas line installations, developers are finding that when planning to go all-electric from the start in new developments, net upfront costs are minor and the project foregoes the future cost risks of retrofitting to all-electric later,” ULI said.
—Impending regulations: Local regulations that restrict or ban gas lines from new construction are increasing and more cities are working on electrification strategies. “Even if a city does not have a gas ban in place, responding to these potential policies and getting ahead of them can prove to be a useful strategy for long-term planning,” the report said.
—Technical benefits: “While all-electric buildings are not a new concept, advances in electric technologies like heat pumps are enabling buildings to gain value from the overall increased energy efficiency of building systems and from optimized inter-connectivity with the utility grid,” ULI reported.
—Environmental benefits: All-electric equipment contributes to the overall environmental performance of an asset, both for carbon emissions reductions and for the health and safety of the space and its occupants, ULI said.
“The burning of fossil fuels onsite, such as on a gas cooktop or boiler, is inherently bad for indoor air quality and can harm occupants when exposed over the long term, such as those working in commercial kitchens,” the report said. “Further, a building cannot meet the strictest definition of ‘net zero’ until it is all electric and powered by renewable energy. With more and more government, corporate real estate and end-user goals setting net zero goals, forward-thinking real estate owners and investors are including electrification in broader environmental, social, and governance business plans.”