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Supply and Demand

The tremendous energy needs of the building sector give it great leverage for driving demand for green electricity.


By Greg Kats, Bob Maddox, Jennifer Martin, Marcus Sheffer

U.S. buildings account for almost 50 percent of energy use and more than 75 percent of electricity use, including energy used for construction and building material. This large appetite for energy gives green buildings huge potential as a driver for increased renewable-energy investment—on the building itself (mainly using photovoltaics), through the purchase of renewable energy credits (RECs), and by using green electricity from renewable energy facilities such as wind turbines, that are not at the building site.

Supply and Demand
Illustration © Gary Neill
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The LEED rating system encourages investment in renewable-energy generation by offering a credit for projects that have a two-year contract to purchase Green-e Energy-certified power directly or via renewable-energy credits. Longer-term contracts have substantially greater impact in actually driving new renewable-energy investments, which typically require 10 to 15 year financing. In addition, Green-e certification specifies power from new renewables, defined as those built since 1997.

The new book Greening Our Built World models the renewable-energy impact of a national shift to green design and finds that greening buildings could drive over 100 gigawatts (GW) of new renewable-energy installations by 2050, about $200 billion of renewable- energy capital investment, equal to nearly 10 percent of our entire generation capacity today. But for this potential to be achieved, the current LEED language has to be updated to require additional and longer-term renewable-energy commitments.

The Energy and Atmosphere Technical Advisory Group for LEED (EA-TAG) recently reviewed these LEED credits, and recommended two changes.

1 Qualifying renewable-energy projects must have been brought online on or after January 1, 2005, instead of 1997.

2 Lengthen the required term of the purchase from two to five years so that renewable-energy power purchase contracts would be long enough to effectively drive new renewable-energy investments.

The intent of these proposed changes is to ensure that green electricity and REC purchases provide a much stronger driver for new renewable-energy investments. These changes can be accommodated by Green-e Energy, the REC program that provides a verification function for green-power purchases. There would also need to be some minor changes made to LEED and to Green-e Energy verification procedures in order to authenticate a building’s five-year purchase commitments.

These changes should be fully adopted by the USGBC in 2010. They would create an effective and strong driver for developing new renewable energy. This would strengthen the brand value of LEED, increase U.S. employment and competitiveness, cut CO2 and other air and water pollutants, and accelerate the greening of our built world.

Greg Kats is Senior Director of Climate Change at Good Energies, a global clean energy investor, and author of the just-published Greening Our Built World. He is Founding Chair of the LEED’s EA TAG and served as Director of Financing for Energy Efficiency and Renewable Energy in the U.S. Department of Energy.
Bob Maddox is the Chief Sustainability Officer at Sterling Planet and a member of the EA TAG.
Jennifer Martin is Deputy Director of the Center for Resource Solutions , which administers Green-e Energy, a leading certification and verification program for voluntary renewable energy purchases in the U.S.
Marcus Sheffer, a partner in 7group and the owner of Energy Opportunities, is the current Chair of the USGBC EA TAG.

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This article appeared in the March 2010 print issue of GreenSource Magazine.

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