Benchmarking matters

Philadelphia skyline
Philadelphia skyline

This January the largest coal-fired generating station in North America, located on the north shore of Lake Erie, was shuttered. Along with the prior closure of four other coal plants, greenhouse gas emissions (GHG) from Ontario’s electricity sector dropped from 40 to 10 million tons per year – the single biggest GHG reduction action on the continent.

Yes, celebration is in order. However, a sizable gap remains between this decline in emissions and the GHG reduction targets set by many cities, provinces and states. Toronto, for example, aims to lower its emissions to 30 per cent below 1990 levels by 2020. Closing the coal plants got the city about a quarter of the way to that goal.

In addition to decarbonizing their electricity supply, communities across North America also need to dramatically improve levels of energy efficiency and reduce energy demand if they are to meet ambitious reduction targets. In urban centres, roughly half of the GHG emissions are associated with the energy used to heat, cool and run buildings. Making large structures – condominiums, office towers, institutions and apartment buildings – more energy efficient is the fastest and most cost effective means of addressing climate change.

As they say in the accounting profession, you can’t manage what you don’t measure. That’s why energy reporting is critical to driving down energy (and water) consumption and realizing sustainable, energy efficient cities. Benchmarking, data collection and monitoring – all captured in an energy reporting policy – is emerging as one of the most effective tools to reduce energy consumption on a massive scale. Indeed, throughout Europe and across the U.S., policies have been rolled out mandating that building owners and managers monitor and report their energy consumption levels.

In the U.S., New York City, Chicago, Boston, Philadelphia and San Francisco are among the cities that have implemented such programs. Similar policies, often referred to as an energy reporting requirement (ERR), are being explored in Canada by cities such as Vancouver and Toronto.

Through an ERR, owners and managers of commercial and multi-unit buildings are required to report the annual amount of energy used by their building to an independent third party, usually a government body. In this way, baseline energy consumption for individual buildings is established, as is a baseline for the overall energy consumption of a city’s building stock. Local government agencies can then aggregate emissions information and send back useful data to owners and managers about how their building is performing relative to similar buildings. The data also helps identify local trends in energy consumption and informs the design of effective conservation programs.

By itself, an ERR is not the silver bullet to the problem of climate change. But it is a highly effective approach when used in combination with supporting instruments. Analysis of both voluntary and mandatory energy reporting programs shows that tracking energy consumption and comparing performance among similar buildings leads to an average 2 to 3 per cent improvement in annual energy efficiency rates. Through an ERR, this potential could be applied citywide to generate a significant reduction in energy use. Reductions could possibly be greater still if the reporting requirement is implemented simultaneously with other programs such as conservation demand management initiatives and financial incentives that support energy efficiency retrofits and equipment purchases.

The value proposition of an ERR is multisided, with benefits for consumers, building owners, utilities and the planet. Owners can use superior energy performance ratings to promote their buildings as more desirable and better managed. Operating costs are lowered since less money is spent on energy use. U.S. studies have shown that buildings with green status benefit from higher sale prices, rental rates and occupancy rates compared to non-green labelled buildings. On the other side of the equation, tenants, lessees and buyers can use publicly available information about a building’s energy efficiency to inform real estate decisions in much the same way consumers can compare fuel efficiency rates when buying a car, understanding that the energy performance will affect long-term operating costs.

Over time, the data generated from an ERR will provide a wealth of analytical opportunities for city planners, utilities and academics – and even private app inventors. Collectively, these analyses will inform the programs, policies and infrastructure needed at neighbourhood and district levels to achieve a truly sustainable energy system and meet an ambitious 2050 target of 80 per cent emissions reductions.

As we strive to create energy efficient cities, municipalities should look to energy reporting requirements as one of the first steps to lowering energy consumption on a substantial scale and addressing the dangerous consequences of climate change. Ontario has said good-bye to King Coal. Now it’s time to say good-bye to energy waste in buildings and power up efficiencies instead.

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