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How will the push for net zero buildings change real estate?

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September 20, 2016

Los Angeles might be better known for blockbuster films but it’s also home to blockbuster green builds such as the largest net zero plus commercial building retrofit in the U.S.

Commercial buildings account for nearly 65 percent of energy use in LA and with California state construction standards requiring all new builds to be net zero by 2030, this facility – which generates more energy than it needs, storing it in batteries and discharging back to the grid – is ahead of the curve and the epitome of a new breed of building.

Energy efficiency in buildings has become a big talking point ever since the ambitious trajectory towards net zero was launched through EU-wide legislation in 2010 and re-invigorated through an industry-led initiative in Paris in 2015. Alongside carbon-literate corporates and global political leaders on the world stage, the real estate sector stood up to be counted in the fight against climate change.

Ambitious targets

The World Green Building Council (WorldGBC) has set long-term targets in support of collective efforts to restrict the rise in global warming to 2˚C by 2100. And net zero carbon for all buildings by 2050 are a key part of what success will look like.

Although there’s an ongoing debate over the exact definition of net zero buildings, it basically refers to buildings which are highly energy efficient and generate all the energy they need to power themselves on-site through renewable energy, or those that produce no carbon emissions on a net basis each year. It’s not just new buildings being targeted; energy efficiency and deep refurbishment of existing properties are also on the agenda.

These goals were conceived in response to science-based targets calculated with the International Energy Agency to cut buildings sector emissions by 84 gigatonnes of CO2 by 2050 – equivalent to not building 22,000 coal-powered plants.

Such ambitions received a boost in June when the WorldGBC launched the Advancing Net Zero project to implement roll-out of certification and training. With Green Building Councils (GBCs) from Australia, Brazil, Canada, Germany, India, Netherlands, South Africa, and Sweden on board, the plan is to get all new buildings and major renovations to be net zero starting 2030, with 100 percent of buildings net zero by 2050. In addition, it’s aiming for 75,000 professionals to be trained on net zero building by 2030, rising to 300,000 by 2050 and all certifying GBCs to have a net zero rating tool in place by 2030.

A crowded marketplace

Any new certification scheme launches into a professional marketplace already busy with established standards for low-carbon and low-energy building labels. The onus is therefore on the WorldGBC to raise support for net zero, argues Franz Jenowein, Director, Sustainability Research, JLL.

“Targets are always good, so long as they can be reliably tied to policy,” he says. “However, labels can be slow to gain market traction. It has taken property agents many years to think in terms of green, then attach ideas to LEED or BREEAM, and in a further step to distinguish between certification levels, such as Platinum and Excellentand add it in the sales vocabulary.

“What is important for the commercial side with this kind of certificate is all the marketing and communications that goes with it, articulating benefits for operational costs, occupier experience, regulatory compliance and so on. A well-communicated certification carrot, plus policy stick, will be the winning formula,” Jenowein adds.

The net zero push is not without precedent or exemplars, though. Under the Energy Performance of Buildings Directive, the European Commission already requires all new buildings to be nearly zero-energy by end 2020, and all new public buildings by 2018.

Going one upper case letter better than nearly zero-energy building (nZEB), the International Living Future Institute actually operates its own Net Zero Building (NZEB) Certification program. The majority of the buildings certified so far under the Living Building Challenge are in the U.S.

The award-winning Bullitt Center in Seattle, for example, is not only powered by a 244 kW rooftop solar array, comprising some 575 solar panels, but it also sits atop a ground-source heat exchange system made up of 26 wells.

Meanwhile, in Auckland, the Zero Energy House is noteworthy not just because it utilizes the first example of roof-integrated photovoltaic tiles of its type in New Zealand. In its first year of operation it generated double the energy used and returned an income surplus. Such examples prove that net zero is achievable, albeit not easy. There remain, though, perception issues to overcome, admits Jonathan Laski, Director, Global Projects & Partnerships, WorldGBC.

“We know that net zero buildings are challenging and retrofit is difficult, but possible – the technology is here, today. There are some, however, who think net zero is only doable in more rural environments, or low-rise buildings, so we need that education.”

New skills for a new time

A big part of making net zero buildings a reality involves building expertise and providing specialized training. With U.S.-based non-profit Architecture 2030 Lead Partner on the project, leveraging the expertise and influence of multiple organisations in many locations will be vital to achieving global scale and market penetration, at speed, says Jenowein.

“We have a lot of innovation, but the change management issue is huge,” he says. “It is a question of reskilling and up-skilling, sharing knowledge. This takes time and needs long-term vision. It also needs partnerships with trade and skills bodies, academia, networks and hubs. Collaboration between industry and academia is still lacking, so they will need help to roll it out worldwide, creating centres of excellence.”

Planning ahead

In short, net zero by 2050, effectively means getting everyone on board by 2030, Laski says.

“Between now and 2030 we need to get the building and construction communities comfortable with the technology, the policies and incentives that will get them there. As the climate maps suggest, we need to move towards deep emissions across the sector – and that includes every builder and developer around the world, as each has a role to play.”

A worldwide push on this scale to mainstream net zero might also have broader, beneficial consequences for the green building market as a whole.

“As long as there is an overcost (and there is 1 to 1.4 percent according to a report prepared for the Mayor of London), then an investor or developer will still be tempted to think twice about the ‘green’,” says Jenowein. “But the more you do something, the better you become at it and these are fundamentally good building skills to have. So, the positive knock-on effect of a drive towards net zero, might actually be to help make green the new normal for global real estate.”

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