The Effectiveness of Building Energy Codes in the Commercial Sector"

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1 The Effectiveness of Building Energy Codes in the Commercial Sector" Zachary A. Wendling" 32 nd USAEE/IAEE North American Conference! Anchorage, AK, July 30 th 2013!

2 Overview! Do building energy codes increase the energy efficiency of commercial buildings?" Yes, for some kinds of building" But, electricity prices matter, too" Energy Star labeled buildings" Truncated regression" Implications" 2"

3 Motivation! U.S. Energy Consumption (2010)! 30.8%" 28.1%" 22.5%" 18.6%" Residential Buildings" Commercial Buildings" Industry" Transportation" Source: DOE Building Energy Data Book" 3"

4 Motivation! 45 U.S. Energy Consumption by Sector! Quads/yr! Building" Industry" Transportation" " 1990" 2000" 2010" 2020" 2030" Source: DOE Building Energy Data Book" 4"

5 Motivation! Equipment" lighting and HVAC" Materials" glazing and insulation" Site Design" solar orientation and layout" 5

6 Motivation! For commercial buildings, " the net incremental cost of achieving a 50% reduction in energy use through an integrated approach can be at or near zero... " (NRC, 2010)" 6"

7 Motivation! Energy efficient building technology" 7"

8 Motivation! Energy efficient building technology" Prices" 8"

9 Motivation! Energy efficient building technology" Prices" Regulations" 9"

10 Building Energy Codes! Minimum requirements" Model codes" ASHRAE 90.1" IECC" State laws & regulations" Waxman-Markey (2009)" 10"

11 Literature Review! Residential" Well studied" XS and panel" ~5% reduction" 11"

12 Literature Review! Residential" Well studied" XS and panel" ~5% reduction" Commercial" CEC 2007: ~4%" Newsham et al. (2009)" LEED buildings" 12"

13 Energy Star Label! 13"

14 Energy Star! 1. National survey" 2. Predicted energy intensity" EUI = Primary energy / square footage! Operations & equipment" Climate (HDD & CDD)" No macroeconomic or policy variables" 3. Energy efficiency ratio" 14"

15 Energy Star! 1. National survey" 2. Predicted energy intensity" 3. Energy efficiency ratio" ER = Actual EUI/ Predicted EUI! Fit CDF" Usually Γ, but Normal works, too" 15"

16 Energy Star! Source: Technical Methodology for Office, Bank/Financial Institution, and Courthouse " 16"

17 Energy Star! Source: Technical Methodology for Office, Bank/Financial Institution, and Courthouse " 17"

18 Energy Star! 1. Offices, Courthouses, and Banks" 2. Retail" 3. Groceries" 4. K12 Schools" 5. Warehouses" 18"

19 What drives energy efficiency?! Capital investments" BEC during construction" Energy prices during construction" Operating procedures" Energy prices in the label year" 19"

20 Methodology! Truncated regression" DV = Energy Efficiency Ratio" treatment = Building Energy Code stringency" other VOI = Electricity prices" Controls" % employment growth" % GSP per capita growth" building age" Std. errors clustered by building" 20"

21 Data! Energy Star database" Score, location, construction year, label year" Online Code Environment & Advocacy Network" EIA State Energy Database System" electricity prices" Bureau of Economic Analysis" GSP, employment" Bureau of Labor Statistics" CPI" 21"

22 22

23 Building Energy Code Stringency! Score! Criterion! 0" No BEC" 1" Something preceding the ASHRAE 1999/IECC 2000 model code" 2" Meets or exceeds ASHRAE 1999/IECC 2000 model code" 3" Meets or exceeds ASHRAE 2004/IECC 2006 model code" 4" Meets or exceeds ASHRAE 2007/IECC 2009 model code" 5" Meets or exceeds ASHRAE 2010/IECC 2012 model code" One-year lag:" "promulgation implementation" 23"

24 Electricity Prices! " 1. Cross-sectional" Compared to national average (z-score)" 2. Longitudinal" % growth over two-years" Construction year or Label year" 24"

25 Descriptive Data! 19,030 labels" Construction years " Label years " Mean age = 16.9 years" 49 States + DC" Density Energy Star Score 25"

26 DV: Energy Efficiency! p<0.01, p<0.05, Offices! Retail! Grocery! K12! BEC Stringency" +" -" Warehouses! Electricity" Construction XS" +" Construction % growth" +" Label year XS" +" " +" Label year" % growth" " -" N! 11,457" 1,973" 2,346" 3,022" 232" 26"

27 Results! BEC stringency matters" Banks, Courthouses, Office, Retail, Schools" Electricity prices matter just as much (or more)" Construction year and Label year" No consistent story from control variables" 27"

28 Discussion BEC Prices? Lower bound truncated sample rebound (prices help?) compliance & enforcement 28

29 Further Work! Full sample" Commercial Building Energy Consumption Survey (CBECS)" More covariates" Renovations, local macro-economic variables" Technology-specific installations" Matching methods" Colorado" 29"

30 Thank you! Questions?" Suggestions?" Comments?" " Zach Wending" School of Public and Environmental Affairs" Indiana University Bloomington" 30"

31 Works Cited! California Energy Commission California Energy Demand 2008 "2018: Staff Revised Forecast. Staff final report # "CEC SF2, Sacramento, CA." Energy Information Administration (EIA) Buildings Energy Databook. "U.S. Department of Energy: Washington, DC." National Research Council (2010). Real Prospects for Energy Efficiency in!the United States." Newsham, G.R., S. Mancini, S., and B. Birt Do LEED-certified "buildings save energy? Yes, but... Energy and Buildings, 41(8): " " " " " 31

32 Regression Output! Offices Retail Grocery K12 Warehouses BEC Stringency *** * ** * (- 6.08) (- 2.05) (- 2.27) Cons z *** (- 0.38) (- 5.16) (- 1.41) Cons % ** (- 2.96) (- 0.67) Label z *** * *** (- 4.94) (- 0.29) (- 5.46) (- 0.97) Label % * *** * (- 2.51) Age *** *** (- 0.65) (- 1.01) Emp % ** (- 3.13) (- 0.51) (- 1.30) (- 0.92) GSPpc % 0.566*** (- 0.93) Intercept 0.855*** 1.296*** 0.694*** 0.773*** 0.374*** sigma _cons 0.173*** 0.228*** *** 0.154*** 0.172*** N t statistics in parentheses * p<0.05,**p<0.01, *** p<0.001 "" 32"