Why sustainability retrofits are your fastest path to net-zero buildings by Schneider Electric

Improving building energy efficiency is critical to reducing emissions; it offers one of the biggest opportunities to help meet global decarbonization ambition. Overcoming it will require a complete overhaul of our infrastructure and energy systems.

To accelerate decarbonization, building owners and operators must take action now! There are a few important factors to consider on this journey:

1. Decarbonization: We collectively need to achieve 10-15Gt CO2 emissions savings per year by 2030 to meet the 1.5 C° climate trajectory. One of the most effective ways to tackle carbon emissions is by reducing energy and carbon, electrifying operations, and replacing energy sources with renewables to decarbonize the building.

2. Electrification and energy transition: By 2050, we will witness a remarkable growth in electricity demand, estimated to be three times the amount consumed in 2018. We must rely on clean, renewable energy sources that meet our energy needs and preserve the planet.

3. Energy Security: The reliability of energy supply is a key concern for building owners and managers. Energy supply interruptions can impact daily operations and cause significant financial losses. In addition, rising energy costs and price volatility can significantly impact a building’s operational costs, reducing profitability and competitiveness.

4. Digitalization: By 2030, there will be triple the number of IoT devices in buildings as in 2020. The data from these devices will connect to powerful analytic tools that will help optimize efficiency.

5. Stranded Assets Risk:  Sustainable buildings have the potential to generate a rent premium. However, as sustainable buildings are becoming more of the norm, other assets are being left behind. As they near end-of-life, they can no longer earn an economic return. Market research suggests that this ‘brown discount’ could be as high as a 30% reduction, leading to significant impacts on the values of real estate portfolios. To remain leasable, these assets will require retrofitting.

To address these issues, we need innovative solutions to decarbonize our energy supply and improve energy efficiency. Let’s explore this further.

Empowering the future of energy: Electricity 4.0

We face two simultaneous challenges: the energy crisis and climate change. Decarbonizing supply and improving energy efficiency are critical to mitigate both and achieve a sustainable energy future.

Decarbonizing supply is essential for reducing carbon emissions. We can electrify by replacing fossil-fuel-combustion energy with electricity powered by renewables to make energy cleaner.

However, this is just one side of the energy coin.

On the demand side, we must create efficiencies and reduce energy waste in our homes, businesses, and transportation systems.

Electricity 4.0 is our vision where energy supply and demand are interconnected and constantly balanced, thanks to cutting-edge technology and data-driven solutions.

In this new paradigm, we think about transforming energy from a commodity to a service, unlocking the full potential of the energy transition to build a sustainable world. For example, customers are provided with an energy service instead of buying and consuming energy. This can include businesses installing microgrids that offer energy storage, demand response, and load management services. The combination of digitalization and electrification will be integral, allowing our ecosystem to utilize the IoT, big data, and artificial intelligence (AI) to provide insight into real-time information and opportunities for improvement. At the same time, electrification enables building decarbonization by removing sources of direct CO2 emissions to create a cleaner energy supply.

The role of buildings

Globally, buildings are responsible for generating up to 37% of global CO2 emissions and represent one of our largest opportunities to address the energy and climate crises through improved energy efficiency and reduced reliance on fossil fuels.

Existing buildings are one of our most significant opportunities

When we zoom into the breakdown of where that CO2 comes from, while new buildings are designed with sustainability in mind, one of the greatest reduction opportunities lies in existing building stock – 50% of which will still be in use in 2050.

• 30% of carbon emissions come from embodied carbon sources such as construction materials and inefficiencies.

• 70% of carbon emissions come from operational carbon, including fossil fuels, lack of renewables, low use of electric energy, and inefficient operations.

Retrofitting is often less carbon-intensive than new construction on a lifecycle emissions basis due to the lower embodied carbon.

• Today’s existing building is 6x more carbon intensive* than a retrofit building with all the available decarbonization technology.

• With new builds, the embodied carbon is 2x more emissions than a typical retrofit building.

Retrofitting today’s buildings will almost always be the optimal solution.

70% of CO2 emissions can be removed using the technology that exists today, enabling the acceleration needed to meet EU climate targets by 2030.

In my next two posts, I will share examples where we have implemented our proven, three-step approach, helping customers worldwide to bridge ambition and action in their quest for energy efficiency and net zero.

*Carbon intensity modeled for representative office building. Assumptions based on CBECS 2018 database and evaluated on a whole lifecycle basis