thanks Esther and welcome everyone to today's webinar on Innovative Technologies this is a webinar in our series featuring energy star partner of the Year Award winners and so today we have two speakers Dan Egan is a senior VP of energy and sustainability from tornado and Randy Moss is a consultant at yardy and both of them will be talking about different technologies that they have implemented at their companies and sharing some case studies of how they've achieved some Energy savings so I will turn it over to Dan to start today's presentation great thank you very much for the introduction and hello to everybody out there I hope everyone is doing well uh during this uh strange time here um uh so my name is Dan Egan I'm a senior VP over at Vornado I'm going to give a brief overview of Vornado uh we are a publicly traded Real Estate Investment Trust with about 25 million square feet of office and Retail uh buildings primarily in New York City we do also own the merchandise mart building in Chicago and 555 California Street complex in San Francisco to give you a sense of scale because sometimes square footage doesn't quite always convey scale we do consume about 280 000 megawatt hours of electricity a year we recover about 60 percent of that from our tenants through sub meters we are a very large District scheme customer here in New York City as well as in Chicago and San Francisco and we have a sizable consumption in water and smaller consumption in natural gas and oil but our group here at Vornado manages the um you know consumption profiles and related costs or the utilities across the company um of note going into this you know we have a very robust sustainability program that's been in place for over 10 years uh we're very proud with our more most recent announcement of uh committing our buildings to carbon neutrality by 2030 um through what we're calling a vision 2030 roadmap I wanted to highlight here that our top priority with decarbonization is in fact Energy Efficiency we do believe the most valuable and impactful part of decarbonization is to do it with less energy to begin with and doing more with using less so um to stand behind that carbon neutrality commitment we have a 50 Energy Efficiency goal on our consumption by 2030 and that's below a 2009 base year so as of 2019 we are proud to say we're at 24 or just about halfway there with a 10-year plan put in place to get us the rest of the way there in addition to Energy Efficiency optimization of demand is worth mentioning here in the context of this program in that you know we believe that it's very important to not only consume less energy but to understand the right times of day week month or year uh to consume energy in ways that are both cost saving as well as carbon saving and I'll get into that a little bit in a minute so we also understand you know as a commercial office landlord we understand that Energy Efficiency must be a partnership with our tenants as the landlord we really can control a minority share of the energy going uh you know being consumed in our buildings and so we've bifurcated that overall efficiency goal into one for both uh the landlord as which is us as well as our thousands of tenants across our portfolio and so we track uh progress uh separately and that gives us two different sets of motivations and two different strategies you know one is on the landlord side in terms of capital projects that we can deploy you know our own employee Workforce to make sure that best practices are part of our operations program uh and all the core and shell sort of work that goes around creating an efficiently run uh building with efficiently run Mechanicals and envelope and so forth the tenants um do control obviously a substantial lighting and plug load and supplemental HVAC uh load profile and so part of what um our program is is Meaningful stakeholder engagement with our tenants as well as lease driven Provisions to make sure that we are tackling Energy Efficiency both from the tenant perspective as well as the more Hands-On project oriented perspective on the landlord side and so thinking about that you know I do think that data is really the driver behind doing Energy Efficiency correctly uh I put this um graphic up here this is 512 West 22nd Street which tornado completed a couple years ago here in New York City um and I this is an attempt to illustrate just the many different ways we need to understand energy because that gives us a greater understanding of cost as well as carbon and it also helps us Target where the energy is being consumed when and by whom so I've highlighted you know a couple of different um lenses that we view our buildings uh that's first of which is the whole building which I would say is a conventional lens you know most of our buildings have one or two utility bills that we can use as a sort of one-dimensional snapshot value to understand where we stand on a per square foot basis uh 90 something percent of our 10 are sub-metered in our portfolio and so we have visibility into the tenants consumption individually so we can understand when our attendance consuming energy is there any trends that we can identify with tenant that tenants that represent particular industries that are of a certain size uh whose spaces are of a certain age and that gives us a lot of insights into um how and why a certain tenants behave in different ways across our portfolio from there you know we can either directly meter or by process of elimination understand what the landlord and Base building consumption is so uh when you have a building where all of your tenants are sub metered sort of the unmetered portion represents the landlord component and that gives us a lot of insights into just what we can control and the progress that we're making on the energy that we can control in terms of reduction and then I'd say more recently um our regulatory environment particularly here in New York City has caused us to look outside of the Four Walls of our building and understand the carbon components and the pricing components of the energy as it enters our building from the utility so um here in New York City in New York state I'll mention the climate leadership and Community protection act which is a host of climate related regulation but mandates that by 2040 the electricity in New York state must be 100 carbon free um so that gives building owners quite an incentive to pay close attention to the progress towards that mandate because that helps us understand over time how we're supposed to think about energy how we're supposed to consider electricity versus other sources of energy such as District scheme natural gas and oil and how that translates to a decarbonization strategy particularly when you have Ambitions of becoming carbon neutral in 10 years so this is a whole new and complex ecosystem of energy and the various ways that we can collect data to understand what's happening in our buildings I will also do a plug here for the newly created energy star tenant Space Program which has given us a lot of tools to motivate our tenants not just to track the drivers behind their own energy consumption and opportunities for efficiency but give recognition opportunities to tenants so we can sort of reward them uh with best practices and understand you know which tenants are truly leaders in this space across our portfolio and so knowing all of this I think that when it comes to evaluating Energy Efficiency we need to depart from the more conventional uh simple payback analysis because there's so many more drivers behind the value of Energy Efficiency here in New York City for example that will come in the form you know we need to add to the value stack the avoidance of penalties uh so I'll mention the climate mobilization act which is a host of City level regulations the most stringent of which is local law 97 which will assess penalties starting in 2025 to buildings that exceed a carbon emissions cap that actually you know that has a straight relationship between Financial Risk and carbon risk and so we need to pay close attention to The Greening of the grid to understand when we're planning for Energy Efficiency not only are we going to be saving energy costs but are we avoiding penalties as well and that sort of enriches the value stack and builds the business case to move forward with a lot of projects that maybe historically or conventionally weren't delivering paybacks that got decision makers particularly excited so in addition to that demand savings should be added benefits depend depending on the availability of time of use markets and demand response markets so many times our Energy Efficiency projects are associated with automation which can deliver curtailment revenue or demand savings that should also be part of the equation um and so let me move forward here but what we the long story short we have a much more enriched way of measuring the value of Energy Efficiency so I know we were here to hear about induction unit valves um so this uh gives you a brief description of what this project was we worked with a very talented and wonderful firm called Goldman Copeland's an engineering firm located here in New York City we took a look at four of our buildings across our portfolio to understand you know are the perimeter systems that are in these Office Buildings operating as efficiently as they can historically these systems were using a lot of outside air which can lead to overheating and over cooling our perimeter HVAC system with something that's very simple a valve control we're we are actually able to modulate the amount of outside air so it's actually matching what the desired temperature need is in buildings at our scale many of our buildings are well over a million square feet you know this can lead to thousands of these valves controls being put in our perimeter systems and can also lead to thousands of dollars in annual savings as well as the related ghg emissions reduction I will pause here and just say that you know more recently we're looking very critically at the availability of outside air in our buildings as it's been recommended by various agencies to be best practice in the age of covet protection so if folks are looking for Energy Efficiency projects that mitigate delivery of outside air it's always going to be a balance to make sure that you're also providing fresh air quality and IAQ that's needing the needs of your various stakeholders so I want to also just take another case study here with the BMS upgrade that we have uh in the works here in one of our larger buildings the BMS upgrade project actually yields not only significant Energy savings but also Dr Revenue which comes in the form of payments that we can reasonably expect to receive here in New York City from both Khan Edison as well as the New York independent system operator you know that goes into the um the value stack when considering this project but also I wanted to sort of just add here what you can see in the gray bars is not only are we seeing the savings more conventionally from energy but we also have fine avoidance uh thanks to local on 97 and projected penalties for the building and what you see is that you are shortening your payback period and adding quite a bit to your annual value stream so what we we probably to be honest our company would have elected to do the BMS upgrade either way but for those on this uh attending this webinar you know this is just an example of an additional way to evaluate these energy projects um that might put something over into the green light column whereas prior to this it might not have been delivering exciting returns which okay and then here's just another example um so we have a chiller plant that needs to be upgraded in fact it needs to be replaced um this is interesting because uh we right now have a steam absorber uh using District scheme here in New York City um District steam is uh as everyone knows not electricity um and so the future of steam in terms of the carbon emissions is in flux and to remain on District's team we need to really consider how this Stacks the building up against future regulatory requirements and so by transitioning over to an electric killer which is what we're planning to do we not only are going to have some Energy savings which comes along with uh replacing a an absorber that's at the end of its useful life with a brand new uh latest technology machine but in addition to that we're going to project some carbon emission savings which has a Direct Value in terms of avoided penalties and so what you see is again the enriched value stack uh what's interesting here and I admit that this is not going to be part of everyone's value stack and even for us it's a rare instance but interestingly interesting enough to put in the presentation um the existing Chiller is on the first floor of one of our office buildings uh in a space that arguably could be rented to a tenant by relocating um The Chiller down into the basement where we happen to have lots of room uh we put ourselves in a position where we could realize additional Revenue just by moving this and so um we convey the value of this project using any combination of the above but it's also I think not only is this important when delivering the value of Energy Efficiency but it also makes it resonate with a wider audience so when you are able to realize benefits that are not only um energy related or carbon related but they actually can deliver Revenue um you have you take advantage of an opportunity to convey this to whether it's releasing your Capital markets or your executive team um it it makes for an easier conversation or certainly a more interesting one that piques the interest of our decision makers okay so just as a takeaways here um oftentimes you know this I know that this webinar is for Innovative Technologies and there are plenty of them uh to be uh deployed sometimes it's actually a tried and true solution that has Automation and is informed by good data to support their value so I don't think we should leave out conventional Energy Efficiency Solutions when we're talking about Innovative Technologies sometimes it's really a matter of applying their value more creatively and making use of the new streams of data that are available um you must understand energy data at different points of the supply chain um you know when I mentioned the source energy of our electricity grid as an example that will help you understand the value streams to add to the stack um Energy Efficiency and ghg Emissions they're often correlated uh but rarely linearly or perfectly and Regulation and Market signals will continue to drive efficiency New York City is one example but I have a lot of confidence that's coming to other parts of the country and so with that I will go ahead and pass the bulbs in my colleague Randy thank you foreign thank you Dan appreciate that um hello everybody my name is Randy Moss I am a with the Rd energy work out of yardies Local Atlanta office in Atlanta Georgia and I want to talk to you a little bit today I'm sure many people on the call are familiar with the Arty I want to give a brief overview before and then lead into looking at both the tried and true methods Dan has mentioned the importance of data and then show some true AI technology that he already has available and we're using with clients and we'll show you three specific case studies so in our good host is energy star said I have 20 minutes to talk through all this so bear with me look forward to questions and answers afterwards so you already at its core is a software company we provide an integrated Erp solution for customers in the commercial real estate industry this is for managing commercial real estate and to help building owners and building managers be more efficient in in many areas one of those areas that we work in is of course energy star we were able to earn energy star partner of the year last two years and continue to keep that string alive hopefully going into the future as a service provider we are collecting that important Source data at the appropriate granular level in feeding that to energy star after it has been audited and confirmed accurate during that process he already does other things with the data and that leads us into the discussion on the way he already operates he already's core product we're building owners can manage buildings and and run their their full Erp Erp solution is Voyager and as people have the core Voyager an easy add-on is a procure to pay product we're not going to really discuss today in pulse which is our Energy Efficiency Suite of products and that's where I'm going to discuss I do need to mention procure to pay on the way by because it is very important on this slide what you're seeing here is the result of studies done over time analyzing costs for commercial real estate the largest cost of course is maintenance repairs and operations but close behind that is utilities think energy and water and as Dan pointed out now there are new things coming in to be considered such as local all 97 in New York Dan I'll mention as as you hinted at in your summary other jurisdictions across North America we know are watching New York very closely in anticipation of rolling out similar laws in other states and in other cities so anyway mro is always the biggest group of expenses but surprisingly utilities comes very close behind that as your second largest controllable cost for commercial buildings so getting a handle on these those utility costs and ultimately driving in new Solutions is what we're going to dig in a little deeper Dan mentioned data several times and I cannot stress heavily enough the importance of good granular data in making decisions to control utility efficiency um he already does this for our clients with a basic pulse invoice processing where the data is collected from those invoices as they flow into the to the Voyager Erp system my group that manages benchmarking for our customers comes into play by extracting that quality data that's been audited to feed for energy star grasp other types of ESG or sustainability programs where reporting is required we're able to manage those benchmarks going forward utility data as it is loaded to energy star or as you view it in reports gives you a very good lens into what happened this is always past tense because utilities will send their bill after they read the meter you get that a few days after last month's history so again a good lens into what did happen but it doesn't tell you what's happening today the meter insights which is a taking your data to the next level of monitoring meters real time you can do this for your sub meters as Dan mentioned Vornado is doing in some of their buildings with sub-metering knowing tenant spaces or there are other means of even tapping directly to utility meters for the building if you have single tenant buildings to know exactly what's going on in your buildings at any given time that permits you to start seeing things happening in real time based on that the fault detection or the next level of saying my demand appears to be going up it may be going to trigger a new Peak charge that's going to haunt me for the next 12 months you can identify things like that on the utility meters looking internally you can detect faults in your own systems are the differentials in the air pressures in your system indicating filters need to be clean and are interfering with efficiency our occupancy sensor is telling you that this year your tenants are not in their spaces in the same hours they were before all of these things that change over time lead to faults that can be defined and tracked and then ultimately those Faults Are responded to either by a staff of talented Engineers who are managing your buildings or it can be through some sort of an AI system that in interprets all this data coming in from meters occupancy sensors various devices installed in your buildings and starts making those decisions and in adjusting your building operations almost in an instantaneous basis to maximize efficiency and maintain tenant comfort so the fault detection beyond that we call it Active Energy Efficiency as yardies AI product that we want to dig into just a little bit deeper we started with this in one of our buildings an office building in California we set a goal five years ago of reducing our energy use in greenhouse gas by 50 percent and through use of these systems in our office building with a couple hundred employees and about seventy thousand square feet or so smaller building we've been successful in reducing energy consumption and greenhouse gas by 60 percent in five years all while maintaining comfort for everyone in the building an interesting piece of that is we also in spite of five years worth of rate increases we reduced our energy costs by over 50 percent so definitely worth worth investigating we we started with ourselves to prove the the technology work now let's talk about how this works how we use leverage this in buildings and I'm going to pick three buildings we've worked on uh East West and Central U.S as examples first building is an example of where we installed this AI technology to to help manage the building the technology or in this case it's an 800 000 square foot building and before we installed it had received Obama 360 designation so it was an efficient building the uh the result over time was a 1.1 kilowatt hour annual reduction in energy use the uh that translated to about a hundred and fifty thousand dollars a year I and this client is of note because they have a very robust system for tracking client call or tenant calls on Comfort it's too hot too cold too drafty and they documented a significant reduction in Comfort calls at the same time they reduce their energy use by 1.1 million kilowatt hours annually and that's starting with Obama 360 Baseline so a great building to begin with one that yardew systems through AI were able to adjust and improve I want to go to another example middle of the country Chicago have a a mixed-use building in Chicago about a million and a half square feet it was lead Platinum when AI technology was applied here as a result we were able to document 285 thousand dollar per year annual Savings in electrical costs uh that's a 1.2 year payback so for people doing the math on your side that's about a three hundred
and fifty thousand dollar investment in the systems customers also shared with us it's about a 1.1 million dollar cumulative impact to cash flow over a five-year window think about that uh think about the other costs that Dan referred to with fees and fines things coming out of of energy use in buildings and think about how these programs and projected cash flows can impact net present value of buildings if your portfolio is one where you frequently acquire or or or the best buildings the the future cost of these interface Energy Efficiency projects are not limited to just the project but also to the impact they're going to have on things like local law 97 Pines that are only come into the future here very soon keep that in mind uh the last example I wanted to share today real quickly this one's in Washington DC and it's one of my favorite stories to tell 470 000 square foot office building we installed our systems there and a peak behind the curtain we we'd like to have a good Baseline ourselves through benchmarking the historical energy use be it an energy star or any system we might like to know how is the building been operating in the past so starting with that is a baseline we're very interested in the future utility bills as they come in after the AI Solutions the Active Energy Efficiency goes into place on the building when this building went up and started running we were anxiously awaiting to see the results in the energy bills and the utility bill didn't show up the next month so we part of what we do is call the utility and go Hey where's my bill and their customer service people couldn't tell us where the bill was they said it seems to be delayed in the system we finally got a call back from engineers at the utility company at the electric company and they said we we have Frozen the bill and because we need to come out and investigate we believe our meters are broken because all the energy use suddenly dropped 10 percent in the building so we enjoy that story obviously because we were anticipating a cost savings uh it it was validated ultimately through the utility company and customer the owner of the building remains very happy the results were as as anticipated in this case so anyway those are three quick studies before I wrap up a couple of summary points um back to what Dan said it's all about the data you must have quality data whether you come up with effective Technologies to read and scrape data from utility bills whether you tap the meters directly from sub meters inside or utility vendors or whether you use some other way to collect your data data is where it starts the more current the data the more proactive you can be to minimize your cost and to reduce your greenhouse gas and and overall reduce energy consumption so utility bills are kind of the the starting point but that's history tapping local real-time meters gives you what's happening right now building that out with automating your faults to know what to go look at when something's happening and ultimately maybe some sort of an AI to to help manage your buildings is where hopefully a lot of people will go as one of the early preliminary questions was size how what's the threshold we see around 200 000 square feet is a building that that generally can benefit from this type of of really strong technology and the investment however we proved in our own office building that buildings less than a hundred thousand square feet can see paybacks in under one year uh from effective energy conservation measures so it's always worth an investigation last point and the thing I want to leave people with is that the technology you already provide to these three buildings and others across North America is an over is not a building management system but an overlay that integrates with existing building management systems so it doesn't require a new or replacement to the BMS in fact our system is BMS agnostic it doesn't care whose management system is installed and if your engineers are challenged by having multiple building management systems they have to log in and out of uh the yardy solution does pull that into One dashboard so it's been helpful for clients with with desperate portfolios as far as BMS goes so that's it I look forward to answering questions in the Q a at this point I am going to hand off back to Stacy and let her wrap up some things for you and move on to uh to more details on our presentation today tips I think those are very helpful and we've already received a handful of questions in the chat box so before we move into the Q a session I just wanted to cover a couple reminders on the program update side the first is about energy star certification for this year in light of covid-19 so we sent out a mass email a couple weeks ago now so most properties are now eligible to apply for certification using energy data through July 31st 2020 you do need to update a couple use details though so be sure to do that if you're applying for certification and the full details are on our website which is linked at the bottom here energystart.gov covid updates and then next the certification deadline for this year is in February of 2021 so we are giving you some extra time and that is because our next round of guidance on on certification will be issued in mid-november but if you're you're seeing your pro your properties and portfolio manager are eligible to apply now if that little button is popping up for you that you're eligible we definitely encourage you to apply as soon as you can and to start working on those applications so that's it for certification but next time and all of us here at energy star very excited about tenant space this new um program with in recognition which is launching next week on Tuesday so we just had a webinar and this week introducing the recognition and this is now will be available for offices starting on Tuesday so if you have any questions on this we do have a specific web page which we can send out in the chat box it's energystar.gov
tenant recognition so we're looking forward to working with many of you in that new record
2023-07-28