Innovative Technologies Part 2

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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

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