February 2, 2012 • Emerging Technology, Energy Efficiency, Green Buildings, Sustainability

Here comes $4 billion in energy efficiency projects

by Jackie Cobb

Recently, President Obama announced a $4 billion effort to improve the energy efficiency of both government and private-sector buildings here in the U.S. The investment of $4 billion, to be spent on energy-efficiency projects over the next two years, intends to “save billions in energy costs, promote energy independence and, according to independent estimates, create tens of thousands of jobs in the hard-hit construction sector.”

President Obama was joined by former President Bill Clinton, Tom Donohue (the head of the Chamber of Commerce) and Randi Weingarten (the president of the Federation of Teachers) to make the announcement, which has implications for both the public and private sector. Here’s how the details shake out:

Public Sector: Obama has signed a Presidental Memorandum directing all federal agencies to make at least $2 billion in energy-cost reduction efforts by maximizing the use of performance-based contracting. Over the next two years, agencies must leverage “Energy Savings Performance Contracts (ESPCs), wherein Energy Service Companies and utility companies conduct energy upgrades of federal buildings and guarantee savings from the improvements.” (Read full report here.)

In essence, the President has not allotted any federal funds, but instead has mandated that agencies hire utilities and/or energy management companies to identify, execute and (most importantly) fund efficiency upgrades. In exchange for completely funding the energy-conservation measures, over time private-sector companies will receive a negotiated portion of future savings achieved through the upgrade.

Private Sector: Nearly 60 CEOs, mayors, university presidents and labor leaders committed to finance $2 billion in upgrades across 1.6 billion square feet of real estate. These efforts apply to a wide variety of commercial and industrial property, including office spaces, municipal facilities, college campuses, manufacturing plants and hospitals. As part of this announcement, quite a few companies announced their participation, including 3M, Alcoa, Ascension Health, CBRE, GE, InterContinental Hotels Group, Kohls, Nissan, PNC, and our own Schneider Electric.

This initiative is part of President Obama’s Better Building’s Initiative, which set a goal in February 2011 of improving energy efficiency in commercial buildings by 20% by 2020. According to the White House, successfully achieving the Better Buildings Initiative “will reduce energy bills for businesses by $40 billion per year, and one report found it could create up to 114,000 jobs.” While the effort doesn’t explicitly reference carbon management or reduction, any energy-efficient building initiative is sure to make positive strides in that direction.

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