Energy Benchmarking

If your first business mentor didn’t say it, your favourite uncle did: “You can’t manage what you don’t measure.”

Nowhere is this more applicable than in facility energy management. Most facility managers already track energy costs, but how many know how efficient their building is compared to others?

Relative performance is determined through energy benchmarking. Through this process, a facility’s energy use is normalized (adjusted to align with standard weather and occupancy) and compared to its peers. For managers and operators, benchmarking offers a key performance indicator that can be used to track improvements in energy consumption — consumption that impacts energy costs and carbon emissions, and that can differentiate a building from others to attract and retain tenants.

ENERGY NORMALIZATION

Direct Energy Use Intensity

It will come as no surprise that the variable with the greatest impact on energy use is building size. For this reason, the industry has long reported energy use per unit area. The result is the building’s Energy Use Intensity (EUI), often reported in kilowatt-hours of energy per square foot of floor area (or kWh/ft²). Using EUI, buildings can be compared to each other regardless of size.

However, this metric does not always allow for an “apples to apples” comparison. Variables such as weather, occupant density, hours of occupancy and facility type all influence a building’s EUI and are uncontrollable by a facility owner or manager (imagine telling an accounting office during tax season they must leave the office by 5 p.m.). The resulting differences can be misleading when comparing the performance of multiple buildings.

Custom Normalization

To adjust for uncontrollable factors such as weather, we use a process commonly called “normalization.” The goal of normalization is to define a typical condition for each uncontrollable factor and then to adjust the energy use intensity of each benchmarked facility accordingly.

Consider a facility in Edmonton which is benchmarked against a facility in more temperate Vancouver: Given identical system performance, the Edmonton facility will have a higher EUI because the colder climate requires more heating to keep occupants comfortable. For example, in 2012, Edmonton experienced 5,710 heating degree days, while Vancouver experienced 2,897 heating degree days, or 50% fewer.

If the Vancouver climate were used to define the typical weather condition, then normalizing the Edmonton facility’s energy use might cause its declared heating energy to decrease by 50%. At this point, the energy performance of both facilities can be compared side by side.

“Degree days” are a standard measure of how cold a particular timeframe was. Heating and cooling degree days are measured versus a “balance point” — the temperature at which a facility tends to reach its minimum energy use. While every facility has a unique balance point, a common balance point can be declared in order to benchmark several facilities against one another. The values used above are metric heating degree days based on an 18 °C balance point.

Vacancy normalization is not as well understood as weather normalization, but the process is similar. First one must measure or estimate the occupant-related energy use, then define the typical vacancy condition, and finally apply a normalization adjustment.

Take, for example, a facility which is 10% vacant and where occupant energy use accounts for 30% of the total. If the typical vacancy condition is defined as 0% (i.e. fully occupied), the building’s normalized tenant energy use might be 33% (a 10% increase in tenant energy use), meaning the building’s total vacancy-normalized energy use would be 103% of its actual energy use. Now the energy performance of this building can be compared to that of other fully occupied buildings.

Normalization can be applied to any uncontrollable factor affecting energy use. Most facility managers will want to normalize for weather, vacancy, hours of occupancy, and type of facility use. Offices, residences, schools, hospitals and factories all use energy differently, so depending on a facility’s unique purpose, other factors may apply.

Some energy managers use their own custom normalization method to report energy use intensity. This approach has the advantage of addressing the unique characteristics or reporting needs of a specific facility or real estate portfolio. However, qualifying and communicating a custom method takes effort.

Benchmarking a facility’s energy use intensity requires utility data and area data for that building as well as for any peers that it will be compared against. Collecting and analyzing peer data can take time. If the peer group is small or not representative of certain buildings, the accuracy of the results may be limited.

Industry-wide benchmarking programs

The need for normalization without the challenges of a custom program has caused industry-wide benchmarking programs to arise. The two most notable benchmarking programs used in Canada today are Energy Star’s Portfolio Manager and the Real Property Association of Canada’s (REALpac) Energy Benchmarking Program.

Energy Star Portfolio Manager.

Energy Star Portfolio Manager is a tool that incorporates a normalization process. In calculating a facility’s score from 1 to 100, it shows where that facility falls on a bell curve of energy performance. A score of 75, for example, implies that a facility’s performance is in the top 25th percentile. The 1 to 100 score adjusts for common uncontrollable factors and is easy to communicate.

This widely accepted normalization method is accessible to the public and is based on a statistical regression analysis of key independent variables considered across thousands of buildings. What’s more, the tool already includes a large data set of peer energy use so individual facilities don’t need to collect and analyze data for anyone else in order to benchmark their own performance. And, since the required level of input detail is flexible (users can apply defaults if exact occupancy or operating hours are not known), users can refine their score over time instead of committing to a significant upfront data collection investment.

For these reasons, Energy Star Portfolio Manager has the greatest market penetration. Programs like LEED for Existing Buildings and Toronto’s Civic Action Race to Reduce use the tool to evaluate facility energy performance.

Energy Star Portfolio Manager is currently administered by the U.S. Environmental Protection Agency. Last updated in 2003, the bell curve used to generate a score is created based on a data set of thousands of U.S. buildings.

While the tool has successfully benchmarked hundreds of Canadian facilities, these facilities are still being compared to peers south of the border. That will change when Natural Resources Canada launches a Canadian version of the Energy Star Portfolio Manager tool. When that happens this July, all Canadian buildings in the U.S. database will be transferred to the Canadian tool and compared to Canadian peers. Still, initially, the Canadian tool will provide scores for only office buildings and K-12 schools.

Real Property Association of Canada’s Energy Benchmarking Program.

In September 2009, REALpac, in collaboration with the Canada Green Building Council (CaGBC) and the Building Owners and Managers Association of Canada (BOMA Canada), announced an energy consumption target for office buildings of 20 ekWh/ft²/year, to be achieved by 2015. For short, the program is known as “20 by ’15.”

Shortly thereafter, REALpac again collaborated with CaGBC, BOMA and various energy experts to develop a publicly accessible tool to help the commercial real estate industry understand their e
nergy use and measure it in a meaningful way.

The first annual REALpac Energy Benchmarking Survey (2009) provided an up-to-date look at how Canadian office facilities perform. A custom normalization methodology was developed and applied.

An online tool is now available to benchmark 2012 data against peers. Normalized results are available immediately, and a peer-to-peer comparison is released once per year in REALpac’s Energy Benchmarking Report. REALpac’s reports tend to have the most recent data available across the industry.

Choosing the right program

Deciding which of the options is best for a specific facility, portfolio or organization depends on many factors. Below are some of the questions to consider.

• Will the benchmarking program need to address uncontrollable factors likely to affect energy use such as weather, vacancy, hours of occupancy, building type? ==> If yes, any program that applies normalization can be used (avoid using Direct Energy Use Intensity).

• Can one system benchmark all or most of the facility use types in the portfolio (offices, residences, schools, hospitals, factories, etc.)? ==> Direct Energy Use Intensity or Custom Normalization can be used with any building: Energy Star applies to office buildings and K-12 schools; and REALpac’s tool applies to office buildings only.

• Is the benchmarking program compatible with the way you currently receive data (for example, hourly utility data, monthly bills, monthly vacancy updates)? ==> Which program you use depends on the specific data.

• Do existing corporate targets specify a metric (for example, LEED EB certification, Energy Use Intensity, GHG reduction, cost)? ==> As above, which program you use depends on the specific target.

• Will you require the results for related programs such as greenhouse gas performance reporting? ==> Generally use Custom Normalization, or Energy Star once it is available with Canadian data.

Energy use and public disclosure

While benchmarking is important to verify and report success, benchmarks alone don’t save energy. Benchmarks are most effective when tied to conservation policies and targets so managers can take action to improve.

In large organizations and government groups, choosing a single benchmarking method allows everyone — from managers to operators to shareholders — to consistently track success. This shared language helps distributed decision-makers reach common energy reduction goals.

The mandatory public disclosure of facility energy use is rapidly gaining in popularity. It is already policy in several U.S. cities, including Austin, Seattle, San Francisco, New York and Washington, D.C. While not yet mandated in Canada, public disclosure is on the horizon.

In 2012, Healthcare of Ontario Pension Plan (HOOPP) launched Canada’s first public building energy and carbon emissions label. ASHRAE released the Building Energy Quotient (bEQ) program, and the Canada Green Building Council launched the Green Up program. Recognition of these programs is expected to grow throughout 2013.

As an industry, engineers need to ensure that we are supporting facility managers and owners and helping them to understand how their buildings are performing relative to the market. We need to help them achieve the opportunities and value associated with constantly improving the performance of their buildings. cce

Eric Chisholm, LEED AP, CEM is a project associate at Halsall Associates in Toronto. He is a Certified Energy Manager registered with the Association of Energy Engineers. Email: echisholm@halsall.com