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Five trends driving action on sustainability in 2013

<p>Despite a contentious political climate, is there hope for progress with sustainability initiatives?&nbsp;</p>

After an election year when energy and climate change policies were not central to the national discussion, it may seem interest in sustainability has flagged in the U.S. In fact, the public and private sectors, working together and separately, continue to progress on policies and strategies that support both ecological and economic goals.

This is evident in the commercial property sector. More than 28 billion square feet -- about 40 percent of the country’s inventory -- now use ENERGY STAR Portfolio Manager to monitor and report energy performance. LEED-certified properties in the U.S. and 130 other countries topped the 2 billion-square-foot mark this summer, and the U.S. Green Building Council notes that another 2 million square feet is certified each day. On the public-sector side, New York Gov. Andrew Cuomo recently announced plans to reduce energy by 20 percent at state-occupied buildings.

The pace of U.S. solar photovoltaic (PV) installations increased by 70 percent in 2012, after doubling in 2010 and again in 2011. About 3.2 gigawatts of PV capacity were added during 2012, bring the U.S. total to 5.9 GW. The Solar Energy Industries Association reports the U.S. is now home to more than 10 percent of all PV installations, up from less than 5 percent in 2010.

But the good news for sustainable development has been tempered by challenges. Solar panel manufacturers have developed so much excess capacity that many firms have had to close their doors despite the strong demand. More corporations than ever are announcing carbon footprint reduction goals and pursuing programs to reduce emissions, but the Carbon Disclosure Project reports few companies are reducing emissions aggressively enough to meet international climate change goals.

The winding road of sustainability progress is illustrated by a U.S. Energy Information Agency report that estimated U.S. CO2 emissions in the first four months of 2012 were the lowest since 1992. That’s the good news. But the drop is credited mainly to utilities replacing coal with less-expensive natural gas, which results in lower CO2 emissions but potentially higher emissions of methane, a more potent greenhouse gas. And natural gas is cheap because of the practice of hydraulic fracturing, or fracking, which faces controversy as a potential source of groundwater contamination, among other environmental concerns.

Next page:  Companies already working on sustainability

There are simple, low-cost strategies to improve energy efficiency and sustainability, but most companies have adopted those already. Fortunately, a decade of technological innovation and increasingly sophisticated data has resulted in new ways to meet environmental goals. Here are five trends we’re seeing that will help companies and governments take energy and sustainability to the next level.

1. Renewed interest in resilience

Resilience in the sustainability world can take many forms. For an environmentalist, resilience may be about restoring a species or a habitat after a disruption, while cities and companies are more likely to consider their own ability to bounce back after a disruption in resources.

The devastation caused by Hurricane Sandy is causing many coastal cities to re-examine their ability to bounce back after a disaster, while cities across the country grapple with the increasing frequency of floods, drought and/or power outages. And companies increasingly consider these issues in their supply chain strategies. The more time and money public- and private-sector leaders spend on recovery contingencies, the more they will come to value strategies that minimize environmental threats.

2. Energy measurement and disclosure

In 2012, Philadelphia joined several other U.S. cities in passing a requirement that large buildings use Portfolio Manager, the Environmental Protection Agency's energy management tool, to measure and report energy performance. We expect to see other cities adopt similar rules in 2013, as the requirement costs building owners nothing and is likely to lead to improvement. ENERGY STAR notes that 35,000 buildings that have measured performance over three years have reduced energy by an average of 7 percent.

New York City became the first city to make performance data public this fall, revealing higher scores at vintage buildings like the Empire State Building than at some recently constructed LEED buildings. As Class A buildings with below-average ratings compete for tenants, landlords will be highly motivated to increase their scores. This increasing focus on transparency can also be seen in the ever-greater depth of carbon and sustainability reporting expected from corporations and governments. Buildings have lagged in the area of transparency, but with measurement and disclosure laws, they are catching up.

3. Smart grid investment

The federal Smart Grid Investment Grant (SGIG) program matches utility expenditures on electric transmission and distribution and sub-metering to the tune of $7.9 billion in total investment, mainly between 2011 and 2013. By April 2012, projects totaling $4.4 billion were complete or under way, with 10.8 million smart meters (8 percent of electric customers) and 270 networked phasor measurement units installed to date. Although the program is still in progress, the Department of Energy has already reported positive results on early installations, including decreased frequency and duration of outages and more efficient power management in many cases.

The emergence of a smart grid is tremendously important to a high-performance energy future. The DoE estimates power outages cost Americans some $150 billion every year. As our existing electrical grid strains under increasing demand and outdated infrastructure, the number of blackouts affecting more than 50,000 customers rose from less than 20 a decade ago to 109 in 2011. A national smart grid promises several benefits, but simply looking at the productivity payback justifies the cost.

Next page:  More push for change

4. Smart building investment

Most owners are still reluctant to make big investments such as whole-building retrofits and large solar PV installations, but many are willing to spend a lesser amount on automated systems that pay for themselves in as little as a year through savings on energy and other operational costs. The opportunity to tap into smart buildings has gotten a boost in recent years by the emergence of several technology trends, such as the ability of cloud computing to collect and analyze millions of data points each minute. Even more important is the advent of technology that can translate data from many different automated systems, allowing a facility management team to remotely monitor entire portfolios.

The near-term benefits of smart buildings and portfolios include energy savings of 15 to 20 percent and, more importantly, the ability to find faulty equipment before it fails and potentially causes a disruption in operations. When combined with a smart grid, however, smart portfolios will gain additional benefits, from more effective demand response opportunities to the ability to sell excess power generated on-site to utilities.

5. Acceptance of renewable energy

The solar energy business has taken some hard knocks--from the near-obsession in some circles with Solyndra to the persistent myth that PV only works on sunny days -- but in the past few years, the industry has managed to grow exponentially while cutting per-kilowatt-hour generation costs virtually in half. As smart technology in buildings and infrastructure grows, solar power may play an expanded role. For example, a smart grid allows two-way transmission of energy, so excess on-site power generation such as a solar or wind installation may be sold to the utility rather than going to waste due to a lack of storage options. With the renewal of the wind energy tax credit at the start of 2013, we can expect to see more turbines going up across the country as well.

Alternative energy techniques beyond solar and wind are also gaining acceptance, particularly tidal power and new types of biomass energy. The rate of adoption will depend on many factors, such as the availability of tax incentives, and the amount of emphasis placed on local generation in support of resilience. The low cost of natural gas may also be a limiting factor for renewable sources, depending on how public perception of environmental risks plays out.

The convergence of these and other trends makes the world of energy and sustainability a dynamic industry, full of promise even as it faces thorny challenges -- and 2013 promises to be another year of rapid change and growth for the industry.

Photo of five pieces to a cog provided by Alex Mit via Shutterstock.

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