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What is the Great Energy Disconnect?

 

Commercial Office SpaceAs demand for climate action soars, governments and businesses are placing a greater emphasis on building decarbonization because buildings are a major contributor of carbon emissions. In the United States, approximately 40% of energy-related greenhouse gas emissions comes from buildings, and this number jumps to 70% in New York City. To achieve ambitious climate goals and minimize the now unavoidable and devastating impacts of global warming, buildings must operate as efficiently as possible. This means they must use as little energy as possible particularly when unoccupied, but the pandemic has starkly shown this not to be the case. 

Within weeks of the March 2020 stay-at-home orders, employees who monitor energy use in commercial office buildings began calling attention to a seeming discrepancy: although occupancy in office buildings shrunk to near zero, building energy use remained surprisingly robust. As the pandemic has dragged on, this disconnect has remained: in New York City, while commercial occupancy dropped to as low as 5% and then stabilized around 15% by the fall of 2020, electricity consumption in Class A buildings was only down 20-40%.

With a limited ability to drive significant energy reductions, building owners experienced a rude awakening to the limitations of their whole building energy performance. While one developer interviewed as part of this research was able to further reduce electricity consumption as the pandemic progressed, most held steady with minimal reductions or even saw an uptick in energy use. Rudin, a privately owned real estate company with 14 buildings representing over 10 million square feet, was the only developer to report greater energy reductions over time. As shared during an Urban Green Council webinar, they initially experienced a 29.5% decline in electricity consumption in May 2020 compared to pre-pandemic levels but were eventually able to achieve up to a 40% reduction in Q3 and Q4 2020 compared to pre-pandemic levels.  A more common example is from another Class A developer that recorded whole building electricity reductions of 17% and 21% in April 2020 and May 2020, respectively compared to 2019 levels with reductions holding at a 17% decrease in October 2020 compared to 2019. A third example from a Class A developer, however, indicated that as occupancy slowly ticked up from 5% in April and May 2020 to around 15-20% in Q3 2020, whole building electricity consumption rose from a 30-40% reduction compared to 2019 levels to just a 10% reduction. Class B buildings fared no better, according to data for 34 such buildings furnished by a third-party provider that revealed 2020 electricity consumption reductions of 15-25% compared to 2019 levels.


Because tenants account for upwards of 50% of all electricity consumption in commercial buildings, it’s equally important to understand electricity reduction in their spaces. Could tenants have been the primary driver of missed reduction opportunities, as many landlords seemed to think? Data shows electricity usage reductions on par with whole building energy performance, although there is a slightly more pronounced uptick in energy use as more people returned to offices in Q3 2020. For example, a major financial services tenant’s electricity consumption was down 28% and 27%, respectively in April and May 2020 compared to 2019 levels but was only down 17% and 13% respectively in October and November 2020. The same pattern holds true for a well-known law firm: electricity consumption was down 38% in April 2020 and was down 56% in May 2020 but was only down 19% and 2% in October and November 2020, respectively, compared to 2019. 

So, what does all this data mean? What prevented landlords from reducing base building energy consumption more than they did? What prevented tenants from reducing their electricity consumption more than they did? Why couldn’t tenants and landlords collaborate more effectively to further reduce energy consumption? 

Other Posts in this Series

The rest of this series will answer two key questions: 

• What were the causes of the Great Disconnect and what lessons can be learned from it that can help drive greater energy efficiency in commercial office buildings after the pandemic ends?
• If hybrid workplaces become prevalent after the pandemic, what are the best strategies for matching office building energy consumption with the number of occupants in their offices?

Part 2:  Dives into the causes of the Great Disconnect

Part 3: Explains the most likely hybrid workplace strategies to match consumption with occupancy. 

Part 4: Focuses on feasible and cost-effective solutions for aligning energy use with occupancy regardless of the occupancy profile. 

If we are to transform our existing building stock into buildings of the future that can reach toward carbon neutrality, we must understand energy consumption in commercial office buildings to inform strategies and maximize energy savings opportunities. 

 

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This series, co-written by Stephanie Margolis of the NYC Climate Action Alliance and Marc Rauch of the Environmental Defense Fund, is adapted from Marc’s report titled “Aligning Energy Use with Occupancy in New York City Office Buildings: Lessons Learned from the ‘Great Disconnect’ and Strategies for the New Hybrid Workplace.” Data supporting all claims was drawn from a literature review on pandemic and post-pandemic office energy use, more than two dozen interviews with building owners, tenants, data analytics providers, engineers, architects, and other professionals conducted by Marc, then Senior Specialist, Energy Transition Strategy at EDF, between October 2020 and May 2021 and energy-use data provided by building owners, large tenants, and third-party providers. We would like to acknowledge that the term ‘The Great Energy Disconnect’ was first used by Urban Green Council at an event of the same name on December 8, 2020.